COLLIERS: DEMAND FOR OFFICE SPACE TO REBOUND
Towards the remaining months of the year, Colliers is optimistic that BPO and KPO office absorption will pick up as “a number of current players have already closed major accounts while firms now get a clearer view of the government’s fiscal policies”
Following the reportedly slower office space absorption early this year, a property management and research firm remains positive that the outsourcing sector’s office space take-up will rebound toward the later part of the year.
According to Colliers International Philippines, the soft absorption during the first quarter of BPO office spaces was due to perceived geopolitical concerns and delays in the Philippine Economic Zone Authority (Peza) applications.
“For the first quarter of 2017, the BPOs and KPOs’ combined share of total office take-up in Metro Manila dropped to 21 percent from an average of 60 percent to 70 percent in the past few years,” said Colliers in a report released yesterday.
This drop in BPO office was absorbed by higher space take- up from traditional service-oriented companies such as consulting, accounting, logistics, as well as online gaming firms and government-owned and -controlled agencies.
Toward the remaining months of the year, the company has expressed optimism that BPO and KPO office absorption will rebound as a “number of current players have already closed major accounts while firms get a clearer view of the government’s fiscal policies.”
Expansion
However, Colliers director for office services Dom Fredrick Andaya cautioned that this softening in BPO absorption should encourage landlords to reconsider their office building projects and make these flexible to accommodate traditional companies who require smaller cuts.
The official also encouraged BPO and KPO companies to ex- pand in the provinces since this is where most government-led infrastructure projects are being done and where there are more incentives being offered.
From January to March this year, Colliers has observed that the provincial share in the BPO transactions increased to about 45 percent, compared to between 20 and 30 percent share previously.
Recently, publicly-listed Cebu Landmasters Inc. has pledged to expand its office space leasing footprint in the Visayas and Mindanao.
Presently covering less than five percent of the company’s portfolio, CLI president and chief executive officer Jose Soberano III said the Latitude Corporate Center in Cebu Business Park, which broke ground last week, and a soonto-be-launched business district in Matina, Davao City will reinforce the company’s office space leasing projects.