BPO Industry Pushing More Developments in PH Real Estate

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  • Posted: May 19, 2014

The Philippines' booming business process outsourcing (BPO) industry is expected to continue its strong growth in 2014, consequently pushing local real estate development and prices upwards.  According to CBRE Philippines, a leading real estate advisory and services firm, development will take place not only in the major cities but also in the outskirts of Metro Manila. 

Commercial and office spaces for BPOs will be on huge demand as more companies engaged in I.T.  and offshoring are either expanding their present local operations or looking to relocate to the Philippines.  Mactan, Cebu, and Clark make up the list of preferred sites for new commercial and retail developments while Davao and Iloilo are also expected to stay competitive especially as areas for establishing redundant/back-up operations. 

"Cebu, Davao and Iloilo will continue to book solid growth for as long as the local government leadership provides regulatory and marketing support," said Enrique M.  Soriano III, real estate analyst and senior adviser at the Wong+Bernstein Business Advisory. 

Metro Manila Space Not Enough

In a separate report from international property management group, Jones Lang LaSalle (JLL), office space in Metro Manila may likely run out in three to four years if the current yearly demand of 400,000 square meters of new commercial/office space remains unchanged.  The firm also attributed the high rental demand to the country's robust BPO sector. 

"We're not seeing any bubble in office market because what's being supplied is rented.  Buildings are mostly committed even before they are completed," explained JLL project leasing head Shiela Lobien in a report published in Inquirer.net.

Not Only Office Buildings

The favorable trend for BPO rental spaces will not only benefit businesses and investors who are directly engaged in the outsourcing and offshoring (O&O) sector.  According to CBRE, luxury and high-end hotels and residential condominiums will also take up a significant share of the real estate boom brought about by BPOs. 

"The BPO offices are also driving real estate [development] for retail shops, residential and condominium.  All are benefiting from the entire cycle of call centers and BPOs.  The key catalyst in real estate now is BPO and call center business.  There's a whole lot of economic development and it has a domino effect from call centers to the other industries and surrounding areas," said Roberto Pe Benito Jr., a chief financial officer for a one well-established BPO in Manila.