Lease Rates and Stable Office Supply Assured by BPOs
The Business Process Outsourcing sector will continue to create majority of the demand for real estate, supported by a wide market of residential buyers, property consulting company CBRE Philippines said on Wednesday.
Joey M. Radovan, CBRE Vice Chairman and Global Services Head said that only Makati is seen to have greater prices this season due to its reducing area, with the other places, such as Fort Bonifacio and Quezon City predicted to maintain their lease levels.
Radovan said one of the competitive benefits of the Philippines is its lease prices, which is among the smallest in the area. For example, Makati, where the main company area in the country is situated, has a typical amount of only $22 per sq. ft..
Bangkok’s amount is $28 per sq. ft., Bangalore, $33; New Delhi, $36; Jakarta, $39; Kuala Lumpur, $47; Hanoi, $50, and Ho Chi Minh Town, $50.
“The investors are delicate. If we price Makati near Hanoi, we will not be competitive any longer,” Radovan informed correspondents at CBRE’s briefing on the nation’s real-estate market on Wednesday.
In conditions of extra office space supply, Radovan said investors must meat up their stock, not just in Manila but in the so-called Next Wave places as well.
In 2012, when the BPO market was predicted to have grown by 20%, Radovan said take-up for new workplaces was about 500,000 square meters.
This season, when the BPO market is estimated to grow by another 20%, CBRE said about 583,000 square meters of new office space supply will be made available. Of this, about 130,000 square meters have been pre-committed as of end-2012.