Real estate services provider Colliers International Philippines expects Metro Manila’s co-working space market to continue to expand over the next three years amid the strong demand from micro, small, and medium enterprises and outsourcing firms looking for plug-and-play offices.
Colliers Philippines said it was expecting the flexible workspace to be a fundamental part of the real estate sector as supply would likely expand by at least 10 percent a year from 2019 and 2021.
It said that in the third quarter of 2018, flexible workspace supply was recorded at 339,000 square meters, up 14 percent from298,000 sqm in 2017. This accounted for about 3.2 percent of the total Metro Manila office supply.
Colliers Philippines this percentage would reach 3.5 percent by end-2021.
“Colliers believes that operators should cash in on the rising demand for flexible workspaces by partnering with developers to carve out co-working space within malls, residential condominiums, hotels, and worker dormitories that will be built within Metro Manila,” said Maricris Sarino-Joson, Colliers International Philippines director for office services.
Serviced office providers, which are the pioneers of flexible workspace and provide the most fundamental services, currently covers 71,000 sqm or 21 percent of the total flexible workspace supply in Metro Manila. Major operators include Regus, Compass, Servcorp and CEO Suite.
“We see these providers capturing new multinational companies (MNCs) that are expanding and conducting due diligence on the Metro Manila market,” Colliers Philippines said.
“The government’s plan to relax foreign ownership restrictions on the construction and retail sectors should also encourage more foreign firms to set up office in the country. These companies are likely to start operating in the country through global serviced office providers,” it said.
Colliers Philippines advised large flexible workspace operators to consider partnering with officials of second-tier cities that are viable outsourcing destinations.
“The project teams of outsourcing firms could start operating in co-working facilities in these cities where they could train college students that the BPOs could tap in the future. Among the most attractive second-tier cities for BPO operations are in Cebu, Bacolod, Iloilo, Clark in Pampanga, Laguna, and Davao,” it said.