THE real-estate’s office sector has remained robust alongside the continued expansion of outsourcing in the country that constantly has driven vacancy in Grade A buildings to record lows.
“For the office sector, the continuous growth of the business-process outsourcing [BPO] industry is the main growth driver and bell weather of demand for office spaces,” Pinnacle Real Estate Consulting Services Inc. Director for Research and Consulting Jose Romarx Salas told the BusinessMirror.
Citing the company’s December 2014 Market Insight report, he said that high-quality Grade A office buildings located within the commercial business districts (CBDs) of Makati, Alabang and Quezon City are “practically fully leased out.”
Those in Bonifacio Global City (BGC), he noted, have weighted vacancy of 3 percent. This was mainly attributed to the new buildings that came online in the past quarters, Salas said.
Grade A buildings in Ortigas Center and Bay Area have a weighted vacancy of 5 percent and 2 percent, respectively.
In Makati lease rates of Premium Grade A offices breached the monthly P1,200 per square meter (sq m). They have a weighted average of P800 compared to those in BGC.
Meanwhile, those in Ortigas Center and Quezon City have monthly command rents of P625 per sq m; Alabang, P600 per sq m; and Bay Area, P500 per sq m.
Coupled with the brisk residential developments, the report said such tight office vacancies have pushed land prices in major CBDs like Makati to north of P500,000 per sq m.
Value of land also surged at the nearby BGC, with two lots of the Government Service Insurance System, for instance, sold at P500,000 and P458,000 per sq m, for a total of P800 million and P733 million, accordingly.
“The office sector shall continue to be a boom market due to the robust demand from the BPO industry and the growing demand from corporate offices. The end of the growth of the BPOs is still nowhere in sight,” Salas said, citing key industry players’ projection of an additional 120,000 employees and a total of $18 billion revenue for 2014.
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I think it’s really awesome that our BPO and KPO industry continues to grow and
thrive. Apart from providing job opportunities to many professionals in the Philippines, it also helps our commercial real estate industry. As someone who offers Real Estate Services (FloorSpace.PH), we have had several companies, mostly global BPO firms, that continuously look for cost-effective locations for their business expansion to the Philippines – and we are more than happy to accommodate them; and because of this, we are greatly appreciative of how our BPO industry helps us grow and thrive as well