The booming business process outsourcing (BPO) industry is expected to drive demand for office space in the country, according to real estate advisory firm CBRE Philippines. CBRE associate director Morgan McGilvray said in a media conference that a reduced vacancy rate (from 3.3 to 2.45 percent in the first quarter of 2014) for office space will be offset by 400,000 square meters of space coming online within the year.
McGilvray is optimistic about 2016, saying that companies looking to expand will have space to choose from due to so much available stock on the market. As the BPO sector shows no signs of slowing down in the next two years, McGilvray said that clients are now looking at establishing their second sites.
CBRE Philippines CEO Rick Santos reported that out of the Philippines' leasable office area of 700,000 square meters in 2014, over 80 percent has already been filled by BPO companies, with a take-up rate of 600,000 square meters.
Santos projected that about 500,000 square meters of office space will enter the market by 2015 and 2016, with space to be concentrated in Fort Bonifacio Global City, Ortigas, Makati, Alabang and Quezon City. The Quezon City business district is the most saturated, with the least office space available and a vacancy rate of 0.07 percent.
Vacancy rates in the five business districts are expected to increase from 2.4 percent to at least 5 percent due to the incoming office space. The Philippines will also continue to attract BPO companies, Santos added.