MANILA, Philippines–Investors are not very much concerned about the scheduled national elections in 2016 as the Philippine economy is expected to continue to perform well, according to real estate consulting firm CBRE Philippines.
CBRE Philippines said most investors remained confident in the strength of the local economy, due to sustained growth in sectors such as business process outsourcing.
“This bright prospect in the BPO sector, along with the strong performance of other real estate sectors, will see the Philippines through and beyond 2016,” CBRE Philippines chair and CEO Rick Santos said in a briefing on Tuesday.
The Philippines, according to Santos, is in a sweet spot in terms of its demographics, given the country’s young population, and educated, English-speaking, skilled workforce.
Santos also pointed out that the BPO sector alone continued to expand and outperform, as more multinational companies outsourced services here in the Philippines, which is deemed the most cost-effective destination to date.
Makati, according to CBRE, has the lowest office lease rates in Asia Pacific at $29 a square foot a year, while retail establishments can enjoy the lowest rental rates of $38 a square feet a year.
“It’s pretty easy to see where demand will go beyond 2016. Businesses will continue to build and expand due to external factors [rather than the elections], thus driving demand for office space here,” he added.
For this year alone, new office space is seen to reach some 700,000 square meters, of which the take-up is expected to reach 600,000 sqm. Roughly 80 percent of this new office inventory coming online this year is expected to be taken up by the BPO sector.
In 2015 and 2016, CBRE expects to see an increase of at least 500,000 sqm of new office space each year, Santos added.
“There is no letdown seen in the growth of BPOs in the country. BPO companies come here for the cost and grow quickly because of the people,” he said.
Other real estate sectors such as retail, hospitality, and industrial are also experiencing bullish growth.