Due to the sustained take-up from key business sectors, the demand for office spaces increased by 68 percent in the first quarter of the current year, compared to the fourth quarter of 2020, Manila Standard reported Leechiu Property Consultants’ latest insights.
The leading industries are the business process outsourcing and the booming e-commerce. The demand jumped to 109,000 square meters, with the BPO companies occupying the largest share at 33,000 sqm. The e-commerce industry represented the second biggest, taking over 19,000 sqm, more than thrice the 6,000 sqm registered in the fourth quarter of last year.
Another 266,000 sqm of office space was eyed to add to the figures, increasing take-up further.
Booming BPO Business
Several stakeholders considered the BPO sector a key driver of real estate recovery. The Asia Pacific Real Estate Association (APREA), for one, tagged it as a “catalyst” for property sector growth, adding that it’s an industry “pillar” supporting the country’s real estate businesses.
Although the BPO sector registered a flat growth last year, it’s expected to expand operations in the next few years, especially with the continued efforts to improve information technology infrastructure and internet speed in the country.
The Department of Public Works and Highways (DPWH) recently released a policy aimed at fast-tracking the development of cell towers in the country, Malaya reported. The department order relaxes restrictions on telecommunication companies eyeing to build connectivity infrastructure along national roads.
Meanwhile, the Department of Information and Communications Technology (DICT) introduced a program called Telecom Tower Watch, which monitors delays in the construction of digital infrastructures. The project, which was reported in Business Mirror, involves an online portal that shows the status of registration of each telco company that filed for application.
In March, the fixed broadband internet speed posted the highest improvement since the start of the Duterte administration, according to another Business Mirror report. From 38.46Mbps in February, it had a 7.79Mbps-hike to 46.25Mbps in March.
Emerging E-Commerce Industry
Meanwhile, the e-commerce sector continues to soar to popularity as community quarantine measures remain and consumers seek convenience for shopping needs. The rising trend gives a boost in demand for warehouses and logistics facilities.
In Lamudi’s trend report titled What’s Next? A Forecast on PH’s Residential and Commercial Real Estate in 2021, technoparks are expected to attract greater demand this year. The number of leads in Biñan, Santa Rosa, and Silang, is likely to increase by 16.7%, 41.50%, and 57.29% respectively in the second half of 2020 from the first half of the year. The e-commerce sector is seen to contribute a significant portion of the demand, especially with the billion-dollar growth projections for the industry.
Back in January, property consultancy firm Lobien Realty Group (LRG) estimated that e-commerce revenue is likely to grow by almost double in 2021, amounting to $4 billion. The government, on the other hand, sees the sector contributing P1.2 trillion to the economy by 2022, accounting for 5.5 percent of the gross domestic product, as Business World reported.
The estimated figure was likewise a double of the 2020 baseline of P599 billion. Aiming to increase the number of e-commerce businesses by 250,000 each year until 2022, the Department of Trade and Industry (DTI) wants to see 750,000 ventures by 2021 (up from 500,000 in 2020) and a million by 2022.
The department vows to focus on four factors: making e-commerce easy and quick, improving ease of doing business, digitalizing businesses, and reducing logistics costs.
Golden Age of Infrastructure
The strong take-up of office spaces by BPO companies and e-commerce businesses will be supported further by ongoing infrastructure developments around the country. Providing convenience for the workforce and facilitating efficiency in trade, new roads, bridges, and railway systems will make properties more attractive to companies.
In Metro Manila, construction projects that are about to be completed include the Bonifacio Global City-Ortigas Link Road, Estrella-Pantaleon Bridge, North-South Commuter Railway Extension Project, and the Metro Manila Subway. Meanwhile, in provinces near the capital region, initiatives that will see completion in the next two to three years are the South Luzon Expressway Skyway Extension Project, Bataan-Cavite Interlink Bridge, MRT-4, LRT-6, MRT-7, and the New Manila Airport.
Sources: Manila Standard, Malaya, Business Mirror, Philstar, Business World