THE Philippines is one of the best outsourcing destinations in Asia, according to CB Richard Ellis Philippines (CBRE)
In a press briefing on Wednesday, CBRE chairman and Chief Executive Officer Rick Santos said the company’s recent latest research indicated the country is competitively priced as far as property prices are concerned.
“The Philippines is one of the most-cost effective real-estate markets in Asia. For instance, it is significantly less expensive than Hong Kong and Singapore which is around 12 times more expensive. This is also why demand in the office services sector in terms of business process and knowledge process outsourcing has been growing in the country. This year’s projected takeup of office space in Manila is anywhere between 330,000 and 360,000 square meters which is quite large when compared with Singapore’s 150,000 square meters a year. We see continued expansionary demand from multinational companies as there is good value in the Philippine real estate market,” said Santos in media briefing held in Makati City.
In a recent study by CBRE, Santos said the Philippines ranked second-cheapest with lease rates of $19.1 per square feet (psf)/annum next to Jakarta with $16.3 psf/annum. Other Asian central business districts included in the survey are Tokyo, Singapore, Hong Kong, Mumbai, Beijing, Shanghai, Seoul, Taipei, Ho Chi Minh, Hanoi, Guangzhou, Kuala Lumpur and Bangkok.
Similarly, the Philippines has one of the highest office rental yields in Asia at 10 percent for the third quarter of 2011, ranking second to India’s 11 percent.
Overall, Santos said the BPO sector continues to be a growth driver as existing BPO office supply in Metro Manila has reached almost 3.6 million square meters of leasable area. Makati remains as the biggest office space provider with a supply of almost 1 million square meters, followed by Quezon City (784,308 square meters), Taguig City (499,464 square meters), Pasig City (440,588 square meters), and Mandaluyong City (326,972 square meters), Pasay City (259,494 square meters), and Muntinlupa City (209,823 square meters).
In the last five years, BPO office annual takeup has hovered between 250,000 to 350,000 square meters. By the end of 2011, direct employment from BPO companies now operating in the Philippines is expected to reach approximately 600,000 employees earning at least double the minimum wage.
In the same briefing, CBRE Philippines Associate Director for global corporate services John Corpus said the outstanding growth of the BPO industry in the Philippines has made it the main growth driver for office demand in Metro Manila. Corpus added that the BPO industry has created demand for office space in other urban centers of the country such as Metro Cebu and Metro Davao, among other choice sites.
“As we continue to see more and more BPO buildings being built in designated Philippine Economic Zone Authority areas, vacancy rates for this type of commercial space have remained at a comfortable single-digit level of 5 percent. In fact, it is no longer that easy to get a contiguous space of about 6,000 square meters of BPO space for a typical 1,000-seater operation in Makati or Fort Bonifacio, ready for occupancy,” said Corpus.
As multinational companies such as banks, financial services and the like strategize to save their business, Corpus said offshoring and outsourcing will be the top approach to sustain their business.
However, Corpus said there is a need to boost the supply of qualified labor for the BPO Industry in the next three to five years to enable the country to sustain the growth of the industry. “The needs of these BPO companies are simple, qualified and cheap labor and much reduced operating expenses,” said Corpus.
“Thus, for the office sector, the BPO industry will be its “bread and butter” for the near future. The downturn and uncertainty in Europe and US boosts BPO and off shoring demand for office space in the Philippines. US and European banks and financial institutions accelerate expansion plans and offshoring—bolstering office leasing market,” Corpus added.
No comments:
Post a Comment