Office space sector hit record sales of 1.5 million sqm this year

posted December 10, 2018 at 07:35 pm
by  Jenniffer B. Austria
Demand for office space hit a record 1.5 million square meters this year, as the strong take-up by the online gaming industry offset the slowdown in demand from the business process outsourcing sector, real estate services firm Leechiu Property Consultants said Monday.

LPC chief executive David Leechiu said in a news briefing Metro Manila accounted for 74 percent, with demand hitting 1.16 million sqm, up 27 percent from 910,000 sqm in 2017.

The figure included pre-commitments by BPO tenants competing for scarce Peza-accredited spaces to be completed in 2019 in the capital. 

“We’re seeing continued growth outside Metro Manila–which is a positive development. At the same time, we are seeing a contraction of BPO demand, which continues to be the largest single industry contributing to demand and a key driver of the economy,” Leechiu said.

Leechiu said office demand from the BPO industry in Metro Manila declined to 289,819 sqm from 355,000 sqm in 2017.

This marked the second straight year that demand from BPO has been on the decline, which Leechiu said was “disturbing”.

LPC said demand for office space from the BPO industry was expected to pick up in 2019 amid the rising labor cost in United States and completion by a number of global companies of their diversification program.    

Meanwhile, the slack in demand from BPO players was offset by offshore gaming, which accounted for 433,000 sqm. and flexible workspaces and multinationals and local entrepreneurs which accounted for 422,000 sqm of office demand. 

Outside of Metro Manila, Clark Global City registered the highest office demand at 156,000 sqm, followed by Cebu and Laguna with 133,000 sqm and 46,000 sqm respectively.

Davao City took the fourth place with 28,000 sqm.

“We’re seeing continued growth outside Metro Manila – which is a positive development. At the same time, we are seeing a contraction of BPO demand, which continues to be the largest single industry contributing to demand and a key driver of the economy,” Leechiu said.

Leechiu said it remained optimistic about industry prospects especially in 2021 when he forecasted the rise in land prices in strategic locations in Clark, Cavite, Laguna and Batangas. 

“The completion of eight projects totaling 665 km of roadway will make 2021 a milestone year in infrastructure development,” he said. “New transportation arteries will spur growth in rising regional centers in these key areas.” 

He asked the government to approve Philippine Economic Zone Authority IT park applications to sustained the growth of the office space sector.

Topics: Leechiu Property Consultants , David Leechiu , BPO industry , Philippine Economic Zone Authority
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