THE booming business process outsourcing (BPO) sector is seen growing faster this year, likely generating $25 billion in revenues and 1.3 million jobs, global property advisor Colliers International said.
Such prosperity is sure to rub off to the office property sector, as bigger demand would easily cover up for the expected increase in supply of office space this year, Colliers said.
In 2015, the property services firm noted, the BPO sector recorded close to $22 billion in revenues and 1.1 million employees in 2015.
Jie Espinosa, Colliers executive director for Office Services, said two thirds of the company’s clients for office spaces in 2015 were from the BPO sector.
“Colliers has assisted major BPO and KPO [knowledge process outsourcing]companies in their search for office spaces for relocation, as well as for setting up new offices,” Espinosa related. “In 2015 alone, Colliers has leased out close to 140,000 square meters of office space. Seventy percent of this is for BPO and KPO companies.”
He said more transactions are underway, as most of Colliers’ clients undergo expansion.
According to Colliers, the overall demand for office space in Metro Manila in 2015 stood at more than 633,000 square meters, a 36-percent increase from 2014, and 29 percent higher than the total supply completed in 2015.
For 2016, the company said there will be a number of completed office projects, “which should aptly cover for the up trend in demand.”
“Supply is expected to hit close to 881,000 square meters in 2016, up by 79 percent from last year,” Colliers said in a separate statement.
The supply in offices, Colliers said, would come from the Fort Bonifacio area, where 395,000 square meters of office space are up for completion this year.
“This area [Fort Bonifacio] represents 45 percent of total Metro Manila’s expected supply,” the real estate services firm pointed out. “Much of the up-and-coming developments will be completed towards the latter part of the year.”
According to the firm, only two developments are expected to come online in the first quarter of 2016—Uptown Place Tower 2 and Bonifacio Stopover.
“Additionally, a number of completed transactions in 2015 already included pre-leasing deals pertaining to upcoming 2016 supply,” Colliers said.
Colliers noted that an up trend in office space demand from services sectors other than the BPOs, as well as from the manufacturing sector.
“In recent years, we have seen an increase in the demand for office spaces. This is largely due to expansion initiatives, new entrants and/or simply relocation of companies. This is driven by a growing services and manufacturing sectors,” the company said.
Moving forward, Colliers concluded, more firms would be scrambling for office spaces, result in a fast take-up of new buildings.