Consultancy outfit sees hike in leasing amid BPO growth

Posted on June 23, 2011

THE LOCAL arm of property consultancy firm CB Richard Ellis, Inc.

expects to facilitate the leasing of as much as 350,000 square meters (sq. m.) of office space this year, significantly higher than last year.

Higher demand will be driven by continuous expansion of existing business process outsourcing (BPO) firms in central business districts (CBDs) all over the country, an executive said in an interview.

“We are seeing positive things about the country’s macroeconomic fundamentals. And Philippine rents are cheap, just about one-twelfth of Hong Kong [rates],” Rick M. Santos, chairman of CBRE Philippines, Inc., said late Tuesday.

This should translate to higher demand for office space, the executive said.

Mr. Santos said the company expects to leasing some 350,000 sq. m. or more of office space, an increase of nearly 30% over last year.

“Last year, we hit 275,000 sq. m. It will be up this year because BPOs will expand,” Mr. Santos said.

He noted that a BPO firm could take up as much as 60,000 sq. m. of office space.

“Growth areas” for BPOs and knowledge process outsourcing firms will still be in the sprawling Bonifacio Global City in Taguig, Pasay, and Eastwood City in Libis, Quezon City.

At end-2010, 525,000 skilled workers were employed in the BPO industry, data from the Contact Center Association of the Philippines and Business Processing Association of the Philippines showed.

In the report titled “Market View: Asia Pacific Offices” for the first quarter, CB Richard Ellis said office space rent in Metro Manila ranked the second cheapest in Asia Pacific in the first quarter, after remaining static from the same period last year.

Prime office space rent in Manila in the first quarter averaged $20.22 per square feet (sq. ft.), slightly declining by 0.9% from the first quarter last year but 1% higher than the fourth quarter last year.

In the list of 33 CBDs in the quarterly survey, Manila was second to the last, after the $12.55-per-sq.-ft. price tag for office space in New Delhi-Noida in India.

Moreover, Mr. Santos said 20% of the office space in the premium Zuellig Building in Makati, which is still being constructed, has already been taken by tenants. CBRE is the building’s leasing agent.

The Zuellig Building is the first building in the country to be certified by the US Green Building Council’s Leadership in Energy and Environmental Design (LEED).

In June 2009, the US Green Building Council awarded the structure’s pre-certification at “Gold” level under the LEED Core and Shell program.

The P7-billion, 33-storey Zuellig Building on the corner of Paseo de Roxas and Makati Avenue will provide more than 60,000 sq. m. of luxury office space and around 2,000 sq. m. of retail space.

Energy savings is approximately 15% or 4.3 million kilowatt-hours annually.

The Zuellig Building is also expected to conserve 71% of water consumption -- equivalent to 29 million liters annually -- through collection and recycling of rainwater and condensate water.

Mr. Santos said CBRE Philippines was in talks with three anchor tenants for the remaining premium office space at the Zuellig Building.

CBRE Philippines started operations in 1998, offering valuation and advisory services, global corporate services, asset services and residential services. -- Neil Jerome C. Morales