The demand for office space remains high as Philippine outsourcing companies continue to attract global clients, according to real estate firm Jones Lang LaSalle (JLL) Philippines Inc. Demand is mainly driven by the information technology and business process outsourcing (IT-BPO) sector, showing positive rental rates and capital values.
JLL Philippines head of research, consulting and valuation Claro Cordero Jr. said the Makati central business district (CBD) is among the prime destinations in terms of quantity and price of office space. Metro Cebu closely follows Metro Manila in terms of office development projects.
Many foreign banks and multinational companies (MNCs) are also expanding their operations in the Philippines and adding to the demand, prompting the creation of new urban areas. Wong+Bernstein Business senior adviser Enrique M. Soriano III expects the trend to continue up to the third quarter of this year, then taper off slightly in the fourth quarter. Soriano said that over half a million square meters of office space will be added in Q4, which will ease the shortage.
The strong performance of outsourcing companies in the Philippines and steady economic growth are behind the trend.
"The office demand and supply market will always mirror the state of our economy... we have seen the emergence of small businesses expanding their operations via compact and modular-sized office spaces in CBDs, e.g. Mindanao- and Cebu-based businesses expanding in BGC," said Soriano.