Record growth in office space pushes property values up

Metro Manila’s office space demand is making a record growth causing land and property values as well as rental rates to peak, according to property management and consultancy firm.

JLL Regional Director and Head of Project Leasing Sheila Lobien said the high demand for office space from last year has caused land and property values, as well as rental rates to soar.

More than that, Lobien said it speaks of a healthy property market that has been given life by the millions of investments landing into the country.

According to Lobien, the main driver of the office market is still the Business Process Outsourcing (BPO) industry which accounts for 80 to 90 percent of office demand. BPOs accounted for 600,000 sq.m. in office space, up from 500,000 sq.m. in 2016. Also credited for the surge in office space rentals are Chinese investors who are coming in droves to put their money into the online gaming industry.

Leading the race for most coveted office areas is Makati, followed by Bonifacio Global City whose main selling point is the good work-play area. The Bay Area is becoming the go-to site of gaming investors while Alabang has become a preference due to the improved road infrastructure to and from the area. Quezon City, on the other hand, is enjoying the biggest BPO population owing to its large number of residential areas and universities. Townships are also booming in Quezon City – where pocket spaces, retail, mall and schools are being built in one site to ease the population’s everyday commute.

With the influx of investments in need of office spaces comes the creation of more job opportunities for Filipinos who have been lauded in many parts of the globe. According to Lobien, the Philippine population is very young, very skilled and proficient in the English language. Labor costs are also very affordable.

According to Lobien, talent is never lacking in the Filipino, even in Metro Manila’s outskirts like Bulacan, Laguna, Cavite and Clark in Pampanga which are being eyed intensively by investors who are looking to expand their operations outside the metropolis.

Lobien explained that aside from the impressive skills of locals, cheaper labor cost as well as lower rental rates have been the main drivers for businesses to set up site in Metro Manila’s outlying areas.

She especially noted Clark which has seen the rise of many industrial sites, office buildings, hotels, and residential developments owing to its accessibility via land, air and sea.

She further shared that Cebu has what it takes also to become the next powerhouse in terms of location for the BPO industry. Lobien observed that the infrastructure slated by the current administration’s “Build, Build, Build” program will further make the country even more competitive as global BPO destination. “The railway planned from Tutuban going northwards will definitely make the Bulacan-Clark-Subic corridor in the North a natural BPO destination. Cebu, owing to its large Englishspeaking local population, presence of an enhanced international airport and seaports and the planned infrastructure to connect it with the other.