Real estate market expands on BPO demand

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The decentralization of the country’s real estate industry is being accelerated by the growth of the business process outsourcing (BPO) sector, as BPO firms scour the labor pool nationwide, a real estate advisor said.

At a press briefing on Thursday, CBRE Philippines Senior Director for Global Research and Consultancy Jan Custodio described decentralization of the real estate market as a natural process.

“It’s just part of the natural stages of evolution where in there is a growing and maturing taste of individuals residing outside of Metro Manila,” Custodio said.

Decentralization as cited by Custodio can be seen in the country’s retail market.


Custodio noted the large-scale mall format developed in Metro Manila, slowly moved into cities outside the capital region.

The trend started with Cebu City, when SM Mandaue and Ayala Center Cebu were introduced in the area.

“We’ve seen that these formats have been gradually transferring outside the Metro cities,” Custodio said.

In today’s real estate market, decentralization moves at a faster pace, Custodio noted, citing the impact of the BPO sector.

“We see that stages are accelerating with the onset of the BPO market. We’ve seen that there are a lot of office districts sprouting out across major cities,” Custodio said.

These cities include, Davao, Cebu, Clark in Pampanga, and Sta. Rosa in Laguna.

CBRE Philippines chairman and founder Rick Santos noted that decentralizing the real estate market stirs the competition between local and big-name developers.

“This can be seen as a positive situation as this encourages local developers to step up in terms of putting up better quality buildings and structures. This in general will promote growth in terms of employment and other opportunities as well as providing better facilities for the local populace,” Santos said.

On the BPO side, CBRE said companies are looking for locations where they can tap into the labor pool.

According to the real estate advisor, Metro Manila would be the priority location for outsourcing companies. But more than 70 percent of BPO jobs today are based in Metro Manila, where an estimated 62 percent of the talent pool has already been absorbed.

“These companies are locating outside Metro Manila where there is more untapped labor and where they have less competition and limited poaching,” CBRE noted.

Developers are trying to address this need of BPO companies as they are positioning their developments in key locations outside Metro Manila to supply the growing industry.

“These destinations have significantly lower rents brought by the lower cost of land and labor, thus making them cost effective expansion sites,” said CBRE.

Santos noted that there is a need for new areas to be developed, as Metro Manila becomes less ideal.

“As Metro Manila continues to be saturated, the need for new areas to be developed has become imperative in order to accommodate the growing demand in the market.

Opportunities can be found in locations such as Laguna, Cavite, Bulacan, and Pampanga, which are all accessible via land transport. Crucial to the further development of these locations is to shorten the travel time between Metro Manila and these areas,” Santos added.

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