Demand for office spaces is expected to remain stable and resilient, with the business process outsourcing (BPO) sector leading the growth in the Philippines amid global uncertainty brought about by the coronavirus disease 2019 (Covid-19) pandemic, according to Jones Lang LaSalle (JLL).
“The information technology-business process management (IT-BPM) industry may continue to spearhead demand for office spaces and this potential new trend of setting up satellite offices would be a strategic fit for the industry considering the significant number of employees in the sector,” the global real estate services firm said in an Office Market Study of Metro Manila and Metro Cebu prepared for Filinvest Land, Inc. (FLI).
JLL’s findings are positive for FLI subsidiary Cyberzone Properties, Inc. (CPI), which continues to derive steady cash flow from its office leasing business due to the resilience of the BPO sector even amidst the Covid-19 global pandemic.
“The industry is expected to grow by 5.5 percent per annum for the next two years, with a 5-percent growth of employment per year, despite the pandemic,” CPI president and chief executive officer Maricel Brion-Lirio said in a statement Sunday.
CPI filed a Registration Statement with the Securities and Exchange Commission (SEC) last March 25, 2021 and an application to change its name to Filinvest REIT Corp. (FILRT), which are subject to regulatory approval.
FILRT manages the 18.7-hectare Northgate Cyberzone property in Filinvest City, Alabang — one of the first Philippine Economic Zone Authority (PEZA) accredited IT Parks in the Philippines.
Seventeen buildings were selected to comprise the planned portfolio of the Filinvest REIT Corp. Sixteen of the office buildings which were all rated Grade A (highest quality) by JLL are in Northgate Cyberzone.
Based on the registration statement, of the occupied gross leasable area, 88.4 percent is occupied by prime multinational BPO companies with 8.8 percent occupied by traditional and retail tenants while Philippine offshore gaming operators (POGO) tenants account for under 2.8 percent as of March 31, 2021.
While the pandemic has dramatically altered the global business landscape and has reduced companies’ office space requirements due to the shift to work-from-home arrangements, JLL said this may not necessarily be the case in the Philippines where demand for office spaces is expected to grow.