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News Release

Manila

BPOs still fueling office space demand -- JLL


DEMAND FOR OFFICE space in the country is far from declining, according to property consultancy Jones Lang LaSalle (JLL) Philippines, as rents are expected to increase moderately under continued demand from the business process outsourcing (BPO) industry.

 In a press release from JLL Philippines, Country Manager Lindsay Orr observed that a significant portion of the new supply has been pre-committed to expanding companies, including BPO occupiers moving up the value chain.


"Most of the new buildings are in strategic locations, a fact welcomed by these types of BPOs requiring more easily accessible workspaces," Mr. Orr was quoted saying.

Just recently, for example, JLL Philippines secured for Arcadis, a global design and consultancy company, a lease for four floors with a total area of nearly 5,400 square meters (sqm) at 6789 Ayala Ave., said to be one of Makati's newest premium office towers.

David Burgess, Arcadis shared services director, said in the press release that the Manila office's licensed architects, landscape architects, and engineers provide support work for the firm's projects in over 70 countries.

Arcadis' project portfolio includes the 160-storey Burj Khalifa in Dubai, Jeddah's water and wastewater networks, and Singapore's Gardens by the Bay.

Mr. Burgess said Arcadis had been attracted by the competent labor pool and low costs of doing business in the Philippines. The Manila office's 712 employees are "a good fit" for providing the technical needs of the consultancy's other units doing projects in Australia, the Middle East, the United Kingdom and Asia-Pacific.

The company expects to add 300 more people in the next two years.

JLL Philippines has itself benefited from the expansion of BPOs. The firm "has grown its business through the years significantly by servicing the needs of BPOs, with a majority of the buildings in Bonifacio Global City counting JLL as a broker, and by successfully concluding 90% of the transactions of BPOs that have expanded to second-tier cities like Davao and Iloilo," the release read.

"We anticipate their needs and are well-versed in their requirements," JLL Philippines Senior Manager Andy Gomez was quoted saying.

The release noted that the 2016 A.T. Kearney Global Services Location Index ranked the Philippines seventh in attractivess for offshoring activities among 55 countries.

According to Mr. Orr, cost-effectiveness is the main driver, and it helps that Manila's office rents are "moderately priced" at $320/sqm, compared with Jakarta's $410/sqm and Singapore's $800+/sqm. 

This article was originally published in Businessworld.