The sustained expansion of the Philippine economy drove demand for office space beyond the 1-million-square-meter mark last year and generated opportunities for various sectors such as office fit-out service providers.
Donaldo Caringal, managing director of Manila Commercial Fit-Out Corp., says with another 1 million sqm of office space expected to be absorbed in 2019, opportunities abound for office fit-out works and design services.
“We are looking forward to expansion. We are ready to service demand not only in Metro Manila but in other areas as well, including Cebu, Bacolod and Iloilo,” Caringal says in an interview in Makati City.
MCFC is a Makati-based fit-out company that has completed more than 200 projects for both multinational and local offices over the past five years. It provides custom office fit-out, design and joineries at 20-percent faster rate than other solution providers, according to Caringal.
“When you say interior fit-out, it does not only include the architectural portion. It also includes the furniture, work desk, chair, lounge, reception table, carpet, painting, etc. We also provide lighting, data cabling, IT networks, CCTV and door access control. In other words, it is turnkey,” he says.
Caringal, who had built townhouses in Quezon City before joining MCFC, says the company is known for its faster delivery performance. MCFC has its own joinery factory in Taguig City that is in charge of woodworks.
“Our office is in Chino Roces Ave., but we are planning to move to Salcedo. We are also getting bigger, so we need a bigger office,” he says.
The company plans to expand to Cebu and other parts of the Visayas soon. “We are not yet in Cebu, but we are planning this year. We are planning to expand because of the demand that we get from clients for an out-of-town fit-out,” he says.
MCFC has designed office space for clients such as business process outsourcing firm Chronos Strategies HLK Corp., Security Bank, restaurant chain Kitchen 1B, BW Shipping PH Inc., IT company Trends and Technologies Holdings Inc. and One Fortune & Chrome Lab.
“According to Leechiu Property Consultants, the office space take-up hit a record in 2018. It breached the 1-million-square-meter mark. So you can just imagine the demand for office space here in the Philippines. The projection is that for this year, the growth would be sustainable. In fact, they are expecting another more than 1 million sqm this year,” says Caringal.
MCFC designed and built out more than 20,0000 sqm of office space last year, according to Caringal. The company employs 50 people in its head office in Makati City and another 50 in its joinery unit.
He says office space demand comes from BPOs and call centers, online gaming companies, multinationals, financial technology firms and startups as well as existing companies that are either on expansion or moving to another location.
These companies are competing for new developments in the central business districts of Makati, Fort Bonifacio and Ortigas. “Clients say that if they are not fast enough to decide on taking up a new space, it is easily gone. And we are talking about 1,000-sqm or 2,000-sqm office space. They have to be fast on deciding whether to get it or not, because the demand is really there. It is on a ‘first come, first served’ basis,” he says.
“With the strong demand now, some offices even at construction phase are being taken up already,” he says.
Caringal says that a lot of new players emerged because of the abundant opportunities in the sector. However, not all occupants get professional contractors and they do the fit-out by themselves with the belief that they could save on cost.
“They could definitely save, but I don’t think they would save on the headache and the timeline that they are doing it. Once you are given a space, you are given a certain time to complete the fit-out, which is usually two months. Anything beyond that, you will be paying for rent already. So it is the responsibility of the contractors to finish it on time and not be a burden to the client. Imagine paying for the rent, without the office being occupied,” he says.
“The rent now is not cheap. If we are talking about 1,000 sqm at P1,000 per sqm, you could be saving that much also. In fact, the rate in BGC is P1,200 to P1,300. If you are a big multinational firm and you get 2,000 to 4,000 sqm, the monthly rent would be P2 million to P4 million. Imagine the savings on that if you are able to finish on time,” says Caringal.
“On our end, just to have a better timeline for the client and deliver a faster turnaround, we have our own joinery firm. We do cabinets and reception lounge in-house. We have our own plant in Taguig,” he says, referring to an off-site fabrication called Dovetail.
“This build and install system allows us to start well ahead of the turn-over of the site and has cut by 20 percent the time needed to do a traditional fabricate-on-site process,” says Caringal.
“Because of that, we can promise faster turnkey,” says Caringal. “With 1,000 sqm, we could do that in 30 to 45 days. That is doable for us. Other firms would take 60 days.”
“We are also very competitive in terms of quality and price. That’s what differentiates us from others—the price, the speed and the quality,”says Caringal.
He says while MCFC started in the office fit-out segment only five years ago, its track record actually spans 18 years. “Before that, we were into construction of residential houses, commercial spaces and hotels. When we saw the demand for office space, that’s when our group had a spin-off called MCFC,” he says.
Caringal says that as long as the Philippine economy and the property sector perform well, MCFC is expected to remain afloat.
“I am very optimistic. We saw it from the trend last year and until the first quarter of 2019. We are getting a lot of inquiries. It is a good sign and reflects the entire health of the economy. The demand is really there. That’s why we are here to fill that demand,” says Caringal.