Demand for office space seen to remain strong | Inquirer Business

Demand for office space seen to remain strong

By: - Reporter / @amyremoINQ
/ 02:20 AM October 14, 2015

The sustained growth of the local outsourcing and offshoring industry is seen to fuel the continued strong demand in office space over the next two decades, according to property consultancy firm CBRE Philippines.

Rick M. Santos, CEO, chair and founder of CBRE Philippines, said the outlook for the office property sector remained “extremely positive” over the next 10 to 20 years, with lease demand (composed of renewals, new space leasing and preleasing) seen to grow to at least 850,000 square meters (sq m) by 2018. Current demand was estimated at about 600,000 sq m.

Of the 850,000 sq m, about 80 percent is expected to be taken up by business process outsourcing (BPO) companies from the United States, Europe and Australia as the country remained a favored investment destination. Driving this interest in the country as an investment destination would be its economic growth story, young demographics, skilled and English proficient labor pool, and competitive lease rates.

Article continues after this advertisement

“The Philippine BPO sector will continue to thrive in the coming years. The country provides a conducive environment for foreign investors—an excellent pool and low cost of skilled labor, outstanding customer service, a quality destination, and one of the cheapest rental rates and highest yields in Asia,” Santos said.

FEATURED STORIES

“The Philippines is becoming the lifeboat for many US and European companies that need to outsource in order for their businesses to survive and actually preserve jobs back in the US and Europe,” he said.

Apart from new entrants in the local BPO space, existing companies that are beefing up their back office operations here are also boosting demand for office space. A number of outsourcing companies are also focusing more on precommitting space in anticipation of their programmed increase in the number of employees in the coming years, Santos added.

Article continues after this advertisement

Santos said employment in the BPO industry was expected to continue its uptrend from about 1.3 million next year to 2.23 million by 2025, and 3.3 million by 2035.

Article continues after this advertisement

Jan Paul Custodio, a senior director at CBRE Philippines, meanwhile pointed out that the revenue growth in the BPO industry was also expected to sustain a strong double digit growth of about 15 percent beyond 2016, surpassing the growth rate of OFW remittances.

Article continues after this advertisement

Last year, BPO revenue grew by 18.7 percent while OFW remittances rose by only 6 percent.

The Philippines offers alternative locations or the so-called next wave cities for BPO companies. These include Clark, Cavite, Iloilo, Bacolod, Cebu, Davao, Cagayan de Oro, Laguna and Baguio.

Your subscription could not be saved. Please try again.
Your subscription has been successful.

Subscribe to our daily newsletter

By providing an email address. I agree to the Terms of Use and acknowledge that I have read the Privacy Policy.

TAGS: bpo, Business, Business process outsourcing, CBRE Philippines, office space, Rick M. Santos

Your subscription could not be saved. Please try again.
Your subscription has been successful.

Subscribe to our newsletter!

By providing an email address. I agree to the Terms of Use and acknowledge that I have read the Privacy Policy.

© Copyright 1997-2024 INQUIRER.net | All Rights Reserved

This is an information message

We use cookies to enhance your experience. By continuing, you agree to our use of cookies. Learn more here.