MANILA, Philippines - The country’s property sector has the potential to grow more in the coming years and has the potential to become of the top markets in the Asia Pacific region as there is going to be a strong demand for more office spaces from local and multinational companies and the continued growth of the business process outsourcing (BPO) industry
In a press briefing on Tuesday, Jones Lang LaSalle Leechiu (JLLL) Associate Director Phillip Añonuevo said that corporate offices show growth in leasing activities from 10 percent to 20 percent as multinational companies beef up office facilities Furthermore, assuming demand from corporate offices continues, takeup of office space could reach 450,000 square meters (sqm) annually for the next two years. Añonuevo said this is considered an impressive record.
“We haven’t seen this kind of office activity since the 1990s,” he said in an interview yesterday.
He said the rationale of the new spending is many new multinational companies were making investments in local firms and consequently seeking better quality office space. Figures from the Business Processing Association of the Philippines (BPAP) indicated that office demand is further strengthened by the growing number of “captives” or offshore operations owned by multinationals, as opposed to offshore operations outsourced by multinationals to third-party vendors such as BPOs.
Claro Cordero Jr., JLLL Head for research, consulting and valuation, said an rise in the number of captives, as opposed to third-party outsourcing firms, marks the steady ascent of the Philippine offshoring and outsourcing (O&O) industry to capture high-value opportunities in the global outsourcing industry.
Cordero also emphasized that the mid-end residential sector, comprised of units from P50,000 to P110,00 per sqm, will not experience an oversupply situation. He disclosed that 154,000 units are projected to be built out from 2012 up to 2016 which is 30 per cent more than the 118,000 units built from 1999-2011.
“Nevertheless, the timetables for completion of these projects are highly elastic. Moreover, Metro Manila’s estimated daytime population of 14 million, as opposed to its nighttime population of around 10 to 11million, indicates that demand for mid-end residential units is far from being fully served,” he said.
Cordero also said tourism is expected to boost the economy and the real estate sector up to 2015. He disclosed that projects that accounted for 10,536 rooms, to be completed between 2012 and 2015, have been launched. Projects amounting to another 3,600 rooms mostly within Entertainment City in Parañaque have also been announced but with no completion dates specified.
Just as tourism is expected to transform Metro Manila, Añonuevo said the office sector will also reshape the urban landscape. He added that, Makati currently accounts for 53 percent of prime and grade A office stock with Ortigas in second at 25 percent and Bonifacio Global City at 6 percent. A number of other emerging districts like Bay City and Quezon City account for less than 3 percent.
He added future pipeline supply from 2012 to 2015 will boost the growth of business districts besides Makati CBD. Bonifacio Global City will capture as much as 41 percent of the new office stock in addition to its many attractions, while Quezon City will account for 15 percent, Makati 11 percent and Ortigas 10 percent.