The Philippines BPO industry is expected to continue to play a major role in the rising office property market in the country which in turn will influence the residential segment as well.
According to Chris Fossick, who is managing director of the property consultancy firm Jones Lang LaSalle in Southeast Asia and Singapore, Philippines will continue to witness growth in BPO sector as many multinationals will be expanding their back-office operations here. This is expected to result in demand for more office space as well as generate employment opportunities for the younger generation.
The younger folk looking for places to reside forms a major portion of this category. When the spending power of the employees increases, the need to upgrade their homes rises as well. To cater to these requirements, a lot of investors will be focusing on the building of high-end residential units.
As per Fossick the office supply by his company in Manila is projected to increase by 18.7% in the current year. This would indicate that they would have to rebuild from existing supply to meet this demand. This constitutes the second-highest growth rate for any city in the country. The first position goes to Ho Chi Minh City which is expected to see a growth of 33.5% and is currently undergoing a property boom.
The demand for office spaces is expected to be less than 15% in Southeast Asia region while it is expected to be below 10% in Manila. As for residential segment, manila projects the maximum growth at 47.2% this year.
This validates Fossick’s statements. He had said that when young people leave their family homes to seek employment, it reflects as a demand for housing market. This will result in increasing housing stock. Population growth, people’s interest in investing, immigration and urbanization influences the taking up of these residences to a large extent.
Jones Lang LaSalle released a study which said that 26 emerging districts, taking up developed land amounting to 1,300 hectares, will contribute to the rising property market of Metro Manila. It also indicated that the retail industry would become healthy due to the expansion and refurbishing of the currently existing malls as well as the construction of new malls.
The new upcoming malls are Century City mall and Fairview Terraces in Quezon City. Tiendesitas and Greenhills are being upgraded by Ortigas & Co. The retail market will be further influenced by international retail brands such as Family Mart, IHOP, Grand Hyatt, American Eagle Outfitters, Uniqlo etc. which are slated to enter the Philippines market soon.
As for the residential segment, the study indicated that 149,000 units will crop up in the next 5 years as compared to 135,650 units which came up in the last 14 years.
Philippines BPO industry has significantly influenced the office property market and in turn, the residential segment which are undergoing rapid growth and is slated for more development in the coming years.