Developers tapping new locations in crowded office market

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GONE are the days when entrepreneurs had limited choices where to set up shop or where business organizations could house their growing operations in the country’s NCR or national capital region. These days, some areas to the south of Metro Manila offer better alternatives for office locators, which find rental prices around the central business districts (CBD) of Makati, BGC or Bonifacio Global City, and Ortigas as being too steep, not to mention their being congested and having locations that are a bit undesirable to many employees and workers who commute to work daily for hours.

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No wonder real-estate developers, such as the Masterpiece Asia Properties, Inc. (MAPI), have been smitten by Taguig City and some areas in and around the Alabang CBD. Now a highly urbanized city and an important residential, commercial, and industrial center in the southeastern part of Metro Manila, Taguig was once a thriving fishing community along the shores of Laguna de Bay. And what was once a farming district in Muntinlupa City, Alabang has now grown into a commercial center, which is also home to the suburban lifestyle hub of Alabang Commercial Center as well as Filinvest City, a master-planned urban center and CBD.

With their strategic locations to large populations of workforce, good infrastructure, and competitive office rental rates and property prices, Taguig and Alabang are fast-becoming the places to be for office locators and highend dwellers looking for state-of-the-art but more affordable offices, apartments, and condominiums. No other than the real-estate services expert, Jones Lang Lasalle (JLL), can vouch for the bankability of these two areas in the south when it comes to commercial and residential properties.

MAPI, which has taken the opportunity to be a first mover in key locations in Taguig and Alabang, is the developer of Vista Campus Tower 1 along Cayetano Blvd., in Taguig, and VistaHub Molino, at Vista Alabang, just south of the district’s CBD core. The two office towers are part of a larger strategy by MAPI and its components—Manuela Corp. (MC) and Vista Land and Lifescapes (VLL), Inc.—to tap key areas for retail and office development.

The 10-story Vista Campus Tower 1, in Taguig, is in an ideal location, with fast connections to either the airport or BGC areas via nearby C-5 highway, and along a main transport corridor for workers coming from the east of Metro

Manila as well as the highly-industrialized province of Rizal. With a design specifically optimized for the business process outsourcing (BPO) locators, even the building’s aesthetics—its footprint, for instance, resembles the shape of a computer chip—reflect the workplace efficiency and comprehensive locator support available to BPO clients under the leasing expertise of JLL, according to Mari-Karr Cachuela, VP and head of BPO Commercial Division, BPO Commercial, at the Vista Hub, in Muntinlupa City’s Starmall Alabang.

The seven-story VistaHub Molino, on the other hand, located on a 2.88hectare property near the rapidly-growing Vista City, on the Molino-Alabang border, is equally ideal for both BPO and non-BPO locators. With the residential, retail, and entertainment clusters of Vista City near at hand, the location is attractive for any business, and is strategically sited for a quick access to Alabang and the commuter populations of both Cavite and Laguna via Daang Hari, Muntinlupa-Cavite Expressway, and the SLEX or South Luzon Expressway.

In a market overview, JLL said Taguig offers slightly lower rental prices than Makati, although land values are slightly higher—a reflection of the city’s relatively new developments and good infrastructure, including underground utilities in most parts of the suburb. It also offers lower tax rates for companies, as well as good transportation connections to the airport and other parts of the metropolis. Alabang, on the other hand, boasts comparative bargain for offices, with significantly lower average rental and property prices compared to Makati, BGC, and Ortigas. While farther from the main areas of Metro Manila, Alabang is well-served by public transportation, including reliable connections to the highly-industrialized provinces of Cavite and Laguna, home to large numbers of workforce.

JLL’s February Office Market Outlook showed that a tight market with low vacancies and steadily increasing rental rates, urban congestion, and some demographic shifts in the workforce bode well for CBDs outside the traditional core areas.

“The market remains favorable to landlords, and tenants continue to consider pre-committing to space, to mitigate higher real-estate costs,” Sheila Lobien, Regional Director of JLL, explained, quoting the market outlook. As of February, about 32 percent of the projected 1.43 million square meters of office supply has been preleased, she said.

The popularity of the top three CBDs has resulted in higher rental rates and lower vacancies in those areas. Cachuela said that in an earlier report, JLL noted that the BPO market in Makati, for example, has led to a shift “to companies high up in the [BPO] value chain,” firms such as legal, engineering, and architectural BPO enterprises, which need and strongly prefer high-end office spaces.

While this segment of the office locator market remains strong, Lobien said the situation creates an opportunity for developers to tap the market that is a bit more flexible in selecting locations, and may prefer areas outside the top three CBDs of Makati, BGC, and Ortigas for economic or practical reasons.

BEN KRITZ

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