MANILA – Demand for office spaces in the Philippines posted a record-high of 1.7 million square meters this year, driven mainly by higher demand from the gambling industry.
In a briefing on Monday, Leechiu Property Consultants chief executive officer David Leechiu said demand from the Philippine Offshore Gaming Operator industry surpassed that of the information technology-business process management (IT-BPM) sector.
He said demand for office spaces from POGO increased to 738,000 square meters to date from 443,000 square meters in 2018.
On the other hand, those from the IT-BPM sector declined to 573,000 square meters from year-ago’s 652,000 square meters.
Leechiu attributed the drop in the IT-BPM sector’s demand for office spaces to lack of readily-available office supply and a “wait-and-see attitude.”
This, after Administrative Order 18 issued last June directed the Philippine Economic Zone Authority (PEZA) to stop the processing of new economic zones in Metro Manila.
Leechiu said the expected annual demand for office spaces by the IT-BPM industry is about 600,000 square meters all over the country, but he sees availability to be low in the next five years.
For 2020 alone, he said there will only be 138,000 square meter spread over seven buildings in Metro Manila and 79,000 square meters in six provincial areas, which would result in an unserved demand of 383,000 square meters.
The supply will only increase by 2021 to 277,000 square meters with five of the buildings in Metro Manila accounting for 120,000 square meters and nine buildings from provincial areas accounting for157,000 square meters.
“Lack of PEZA supply is likely to make the Philippines a less attractive hub for IT-BPM firms on expansion mode. We need more PEZA-accredited buildings in the pipeline if we want the country to continue being an ideal location for these companies,” he said.
Leechiu thus lamented this situation since he expects strong growth for the business process outsourcing sector next year due to the economic uncertainties of several major economies, which, in turn, will increase demand for outsourcing jobs. (PNA)