Real estate demand drives Philippine BPO growth in new cities

Real estate demand drives Philippine BPO growth in new cities

Faith Ocampo Published on September 21, 2016

engineers looking over city scape holding construction plans

The increasing demand for office space is fueling the growth of new Philippine outsourcing hubs.

As the Philippines continues push for regional growth, new outsourcing hubs called Next Wave Cities are being developed. The 10 new business process outsourcing (BPO) hubs include cities Baguio, Davao, and Dumaguete, which are now among Tholons’ Top 100 Outsourcing Destinations.
According to a report by real estate consultancy firm Pinnacle Real Estate Consulting Service, this expansion is hugely driven by the increasing demand for office spaces within and outside Metro Manila.
The report, More of the Same - Market Insight Q3 2016, released last Monday, stated that the dynamic Philippine real estate sector is changing the outsourcing landscape in many cities. As investors are flocking to Metro Manila to outsource their customer service and other operations, many firms may start transferring to other locations in the future. Doing so would let them move away from the competition over material resources and skilled professionals. This would allow them to save on rental costs, as provincial rates are much lower than that in central business districts.

Real estate demands

night city scape urban jungle buildings

In the next two years, it’s projected that more than 1 million square meters of office space will be built in Metro Manila. According to Pinnacle, this breaches the seven million square-meter target.
However, aside from the dynamic BPO market in Metro Manila, other areas like Cebu are also experiencing tremendous growth.
“There is a total of approximately 700,000 square meters of Grade A office spaces [Cebu]. Average rents are slightly higher than Php 500 per square meters per month, which is substantially lower than the Makati and BGC business districts. Vacancy of office space is likewise a low 5%, keeping the rents stable,” Pinnacle explained.
In addition to Cebu, other Next Wave Cities that will continue to attract outsourcing companies and investors are as follows: Baguio, Davao, Dumaguete, Iloilo, Lipa, Metro Bulacan, Metro Cavite, Metro Laguna, Metro Naga, and Metro Rizal. What makes these areas attractive to outsourcing firms are a healthy workforce and rapid infrastructure development.

The need for new BPO hubs

engineers at construction site looking floor plans

More and more Philippine call centers and other types of service providers are exploring new areas to put up operations. One of their main reasons for doing so is to gain access to a wider talent pool. In Metro Manila, it’s estimated that around 62% of the workforce is already employed.
In addition, the emergence of Next Wave Cities is making the Philippines more competitive. According to global real estate services firm Jones Lang LaSalle (JLL) Property Consultants, new hubs allow the country to go toe-to-toe with India when it comes to outsourcing. Although the Philippines has beaten India in the voice customer service segment, it remains second in the overall outsourcing industry.
JLL suggests that the government build efficient transport systems, subsidize land property prices, and reduce rental rates in the Next Wave Cities to further encourage more investors to outsource to the Philippines.

Faith is a digital media enthusiast aiming to become an active part of the tech world by sharing her insights. She likes to blog about everything digimarketing, technology, and social media.

Leave a Reply

JOIN US ON FACEBOOK
Open Access BPO
Open Access BPO1 day ago
"As we chart new waters in these uncertain times, it’s great to join a stalwart organization like CCAP. This organization has been a champion for the industry and a valuable network in the #BPO and KPO community here in the Philippines.”
- Ben Davidowitz, CEO of Open Access BPO

Read the latest news about Open Access BPO at https://buff.ly/3xJOc9A

#WeSpeakYourLanguage
Open Access BPO
Open Access BPO1 day ago
How do you know your data is safe when outsourcing?

See how seasoned Philippine call centers maintain #DataSecurity using these best practices: https://buff.ly/3gS4E0C

#WeSpeakYourLanguage
Open Access BPO
Open Access BPO2 days ago
CCAP is a non-profit association made up of the top call centers in the Philippines.

As its newest member, Open Access BPO is looking forward to helping the local #BPO industry advance in the global scene.

Read more: https://buff.ly/3wOs1yW

#WeSpeakYourLanguage #Outsourcing
Open Access BPO
Open Access BPO6 days ago
Don't let unmoderated user-generated content harm your brand's reputation.

See how #PhotoModeration can help your brand maintain quality and order in your online community: https://buff.ly/3cQAxoR

#WeSpeakYourLanguage
Open Access BPO
Open Access BPO7 days ago
Open Access BPO is honored to be the newest member of the Contact Center Association of the Philippines - CCAP.

We support the organization's initiatives to drive industry innovation and elevate service quality among Philippine-based contact centers.

#WeSpeakYourLanguage
Open Access BPO
Open Access BPO1 week ago
"We look forward to working with the Contact Center Association of the Philippines - CCAP and other players in the local sector to champion the Filipino contact center industry in the international arena." - Joy Sebastian, Open Access BPO's Global Vice President

View the full story: https://buff.ly/2TykIwo

#WeSpeakYourLanguage
Do NOT follow this link or you will be banned from the site!