Various factors point to the business process outsourcing industry leading the growth of office space demand, Manila Times reported.
One vital factor Colliers Philippines eyed is the gradual reopening of the United States’ economy, fueling consumer demand. The expansion of BPO offices to areas outside Metro Manila and into key cities benefitting from the massive infrastructure development will also contribute to increased office space demand. Regional centers feature a capable workforce as well, which will likely push further the expansion plans of companies.
Promising Growth Opportunities
The projected growth of the BPO industry in terms of revenues and number of full-time employees will result in more players requiring office space.
In a Manila Standard report, the IT and Business Process Association of the Philippines (ITBPAP) expects an 8 percent increase in export earnings, reaching $28.8 billion this year. In terms of employment, they are estimating an 8 percent increase, engaging 1.43 million professionals. Compared to 2020, which generated 20,000 new employment opportunities, the organization anticipates over 100,000 more jobs by year end.
According to a recent survey, IT-BPM companies were optimistic about growing their operations between 5 and 15 percent this 2021.
Committed to supporting industry growth, ITBPAP focuses on digitalization, talent upskilling and the creation of the right policy framework.
Real Estate Hotspots Outside the Capital
In a separate report released by Sunstar, Colliers sees Metro Cebu as one of the go-to locations of BPO companies for office spaces. According to the property consultancy firm, the “quality workforce, improving infrastructure, and lower cost of living compared to the capital region” in the locale will likely entice industry players.
The latest big-ticket project to be introduced to the public soon is the Cebu-Cordova Link Expressway (CCLEX). As the construction team closed the last gap of the bridge last month, the bridge is expected to be inaugurated in the first quarter of 2022, Rappler reported. Stretching over eight kilometers, the third Mactan bridge is the longest and tallest bridge in the country.
Other big-ticket transportation projects in the metropolis are the Metro Cebu Expressway and the Cebu Bus Rapid Transit. The projects are set to alleviate traffic congestion in the metropolis and facilitate better transportation in Cebu’s central business districts. These infrastructure projects, according to Colliers, can contribute to the region’s appeal to BPO players.
In the first quarter of the year, Metro Cebu recorded positive net office absorption, Colliers report showed as mentioned by Sunstar. Outsourcing and traditional companies fueled the take-up activity. Given this positive development, they anticipate demand recovery by the end of the year.
They noted a 10 percent correction in lease rates happening in the fourth quarter prior to an upturn trend in 2022. A more vibrant leasing activity in the region hinges on the vaccine rollout program, Colliers added.
Seeing these bright opportunities in the Visayan metropolis, property platform Lamudi provides Cebu-based brokers the opportunity to market properties online with a subscription promo. With offerings on the digital space, practitioners can make critical property information more accessible, while expanding their reach.
Meanwhile, in the market analysis of consultancy firm Leechiu Property Consultants (LPC), Iloilo represents a significant portion of the total office demand in areas outside Metro Manila.
Inevitable Return to Office
As the national vaccination program continues, the gradual reopening of offices will follow. This will contribute to the demand for commercial spaces post-pandemic.
A report by JLL Philippines showed that while the new norm of work-from-home is favored by many, employee needs and preferences will compel businesses to return to the office. The key factors driving this movement include missing informal social interaction in an office setting, attending scheduled meetings in the workplace, and improving access to information and concentration at work.
Earlier in June, the agency affirmed that the office will “remain the center of the work ecosystem,” mentioned in a Manila Times report. It will be instrumental in attracting talent and representing the company brand and purpose. Moreover, it facilitates social interaction among workers, where collaboration and problem-solving happens.
JLL emphasized that employees need time to be in the office to feel “engaged, empowered, and fulfilled,” a minimum of three days per week.
The future of work, according to the firm, supports a hybrid arrangement, allowing workers to operate in the office, home, and anywhere.
Sources: Manila Times, Manila Standard, Sunstar, Rappler
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