PH tops office sector rental occupancy rates
“The Philippines is one of the most cost-effective and attractive destinations for Business Process Outsourcing (BPOs) and real estate investors in Asia today.
This scenario will be sustained provided property owners “put-off any plans” of increasing the current rental rates for office spaces.
CB Richard Ellis (CBRE), a leading real estate advisory and services firm in the country noted that the office sector currently enjoys the highest occupancy rate in the region and that the compelling reason aside from competitive human resource is--- Low rental rates.
The country’s record has remained unprecedented as investors and locators more particularly BPO companies from western countries have taken advantage the lower rental costs.
Cost-sensitive BPO firms drove the demand for office spaces in Quezon City, Fort Bonifacio and Alabang. Traditional office demand remains strong in the Makati CBD, CBRE officials led by its Philippine Chair and Founder Rick Santos stated.
During the round table discussion with media held recently, Santos disclosed that multinational and BPO firms took up most of the Prime and Grade A offices offered in Metro Manila and by the end of the second half, overall occupancy rating across the business districts is at 97.49%.
The Philippines’ current rate of US$26 per sq.ft. is the lowest among all counties in the region with Hong Kong registering the highest average rental rate of more than US$200 followed by Beijing at US$182 and Tokyo at US$134 per sq.ft.
Seoul, Taipei, Jakarta, Guangzou averages US$60-68 per sq.ft. while all the others in the ASEAN region ranges from 32 to 49 US dollars.
“Real estate growth trajectory is expected to follow GDP growth trends – and as the economy enters a structural shift to higher growth – the real estate industry will continue to flourish along with it in the years to come.” Santos explained.
“He added that “the preventive measures set by the BSP on the level of real estate loans and the relatively smaller exposure of the Philippines to such loans, shows that investments are based on real demand and not on speculation.”
Santos said that the Philippines is where India was in 2002.
“We project 10 years of record BPO growth and expansion. US expense pressure will cause more US companies to outsource.” he enthused.
Revenue projections for 2013 is $16 billion and employment is targeted to reach more than 900,000
CBRE research have also noted that US expense pressures are leading more BPO expansions in the country.
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