The business process outsourcing (BPO) industry in the Philippines is expected to grow faster this year and generate $25 billion in revenues and 1.3 million jobs for Filipinos. Real estate consultancy firm Colliers International said the growth of the BPO sector will lead to higher demand for office space that will absorb the increase in supply this year.
Colliers executive director for office services Jie Espinosa said 70 percent of demand for office space in 2015 came from the BPO and KPO (knowledge process outsourcing) sectors. The company has helped BPO companies find spaces for new facilities, expansion and relocation, leasing almost 140,000 square meters of office space in 2015.
Colliers reports that overall demand for office space in Metro Manila was over 633,000 square meters in 2015, a 36-percent increase from 2014. Supply is expected to reach 881,000 square meters this year, which should be enough to cover a rise in demand. The Fort Bonifacio area creates much of the supply in office space (395,000 square meters), accounting for 45 percent of Metro Manila’s total supply. Most of the developments will be completed later in 2016.
Meanwhile, property advisory firm Jones Lang LaSalle (JLL) said the Philippines could be the next global investment and information technology hub if foreign restrictions on real estate ownership are removed. JLL India chief operating officer Ramesh Nair said there’s a big opportunity to build business parks close to the city center and attract BPO locators looking for more affordable office spaces.
It all depends on good connectivity. Nair recommends building a high-speed railway or highway to connect these new hubs to Metro Manila. In emerging countries like India and the Philippines that lack adequate funds for infrastructure, Nair proposed a public-private partnerships (PPP) model for real estate and infra projects.