Office demand in the Philippines to be driven by IT-BPM companies

IT-BPMs require workspaces that offer reliable backup systems in case of power and connectivity issues

The Philippines will experience an influx in office demand this year thanks to the IT and business process management (BPM) industry.

While many firms are still implementing the hybrid work setup, IT-BPMs require workspaces that offer reliable backup systems in case of power and connectivity issues.

Despite massive exits from Philippine offshore gaming operators (POGO) throughout last year, Claro Cordero Jr., director and head of research at Cushman & Wakefield Philippines said that corporate occupiers are currently strategizing their next move. This, in the wake of the pipeline supply reaching 787,000 sqm, according to The Philippine Star.

Though overall office leasing activity is subdued during the first half of 2022, things are still looking up in terms of market stability. 

More: The Philippines’ office sector preps for hybrid work scheme post-pandemic

BusinessWorld shared that IT-BPM companies dominated overall office take-up during the last quarter of 2021, accounting for 62.5 percent of gross leasing activity.

Leasing activity, however, may slow down because of PEZA extending its moratorium in lieu of the Omicron variant and the upcoming May elections.

“We might see leasing activity slowdown as more investors, as well as occupiers, postpone their leasing decisions as they wait and see whether policies might change in relation to their portfolio and investment decision,” said Janlo de los Reyes, head of research and consulting of JLL Philippines.

JLL Philippines also mentioned that there will be a surge of newly built real estate spaces, which would affect the residential, commercial, retail, and hospitality sectors, this year. This would put pressure on and dampen the market for a while because demand may not support supply.

While it may be a slow climb during the first half of 2022, Janlo de los Reyes has this to say, “Everyone was looking at 2021 as the recovery year for the market, but I think it was still part of our journey to recovery. We do expect the same story for 2022, but definitely, there are signs that are pointing at improved movement with regard to the real estate market for this year.”

The Property Report editors wrote this article. For more information, email: [email protected].