Property consultancy firm Colliers International is projecting a 10-percent growth in the supply of co-working office spaces in the Philippines in the next three years on the back of the expanding freelance millennial workforce.
In the new report, “Mining Millennials: Finding Gold in Co-working Spaces” released on Tuesday, Colliers said that there was rapid growth in co-working office spaces in recent years due to the emergence of freelancers and online professionals.
“The growth in the flexible workspace segment in the Philippine market has been undeniable. The estimated total stock of flexible workspaces in Metro Manila has already reached 228,000 square meters (sqm). Colliers expects supply of these co-working spaces to grow by 10 percent annually in the next three years, spurred by a millennial-dominated labor force and a growing community of start-ups,” said Randwil Dinbo Macaranas, Colliers senior manager for research.
Of the total 228,000 sqms of flexible office inventory in the country to date, about 79 percent are hosted services, 19 percent are the traditional serviced offices, while only 5 percent are the newer and innovative co-working spaces.
Serviced offices are considered the pioneers of flexible spaces, and provide ideal spaces for business travelers, expatriates, and new entrant multinational companies (MNCs). These are usually located in central business districts (CBDs) and cost about P19,000 per seat on a monthly basis.
Hosted services providers are flexible workspaces like the serviced offices but cater to the business process outsourcing (BPO) sector due to the provision of back office and non-core services such as IT services, human resource staffing, and accounting, among others.
Lastly, co-working spaces are the newest of the flexible office types. These contemporary offices are more open, intended for sharing and also reflecting the comforts of home. This type of office space enables tenants — mostly freelancers and start-ups — to collaborate and connect in a shared working environment. These shared offices only charge an average of P500 per person a day.
Macaranas said co-working offices have the fastest growth among the three types, growing at an average of 61 percent yearly in the past four years versus the 19 percent and 18 percent growths of hosted services and serviced offices in the same timeframe, respectively.
The 10 percent growth projection for co-working spaces are expected to be driven by MNCs using flexible services, the robust take-up from the BPO sector, the rise of start-ups and freelancers, the technological advances in application to the workplace, and the growing millennial workforce.
Some of the MNCs present in the country are Google, Wells Fargo, HSBC, JP Morgan, and Ikea. At present, there are an estimated 1.3 million freelancers in the country.
Moving forward, Macaranas said he sees a trend of hosted services and serviced offices being transformed into co-working spaces, which will eventually contribute to growth while at the same time addressing the rising rental rates of offices.
Some co-working space providers in the market include Ayala Land Offices with its Clock In offering together with co-working space veteran Acceler8, Co Lab Xchange, A-Space, The Office Project, and Launch Pad, among others.