Philippines’ South Luzon region attracts BPOs with talent, infrastructure: Colliers
MANILA, PHILIPPINES — South Luzon is rapidly becoming a preferred destination for business process outsourcing (BPO) firms in the Philippines. This shift is largely due to the region’s abundant talent pool, strong infrastructure, and strategic location outside the congested business districts of Metro Manila.
In its latest briefing, Colliers Philippines reported that this trend is significantly altering the country’s office market landscape.
“There are BPOs that are actively and consciously veering away from traditional business districts in Manila and have made it a point, as part of their core site selection strategy, to not be in Manila. Instead, they are locating in the fringes of Manila where the people actually live,” stated Kevin Jara, Colliers Associate Director for Office Services.
Talent and infrastructure drive growth
The Cavite, Laguna, and Batangas (CALABA) area, with a population of 10 million, offers a substantial working-age demographic, making it an attractive hub for BPO operations.
Major companies such as iQor, Concentrix, Appen, Teleperformance, and TaskUs have already established office spaces in these regions, taking advantage of the area’s infrastructure and talent availability.
Office buildings that integrate retail spaces are particularly appealing to BPO firms, as they achieve higher occupancy rates compared to standalone buildings. Notable examples include Megaworld Corp.’s Southwoods BPO Towers 1 and 2, SM Holdings Inc.’s The Core Towers 1-3, and Ayala Land, Inc.’s One & Two Evoctech.
Jara added that the average occupancy rate of office buildings in Southern Luzon attached to retail or commercial developments is about 80%, compared to below 50% for standalone buildings.
South Luzon’s appeal is further enhanced by ongoing infrastructure projects such as the Light Rail Train 1 Cavite extension, Skyway 3, and the South Luzon Expressway.
These developments are expected to increase land and property values, making the region even more attractive for investment.
Office space trends and market outlook
Despite the increasing interest in South Luzon, office space transactions in the Philippines remain predominantly centered in Manila, which accounted for 79% of transactions in the first half of 2024. However, provincial areas, including South Luzon, are gaining traction, accounting for 21% of the market.
Joey Roi Bondoc, director and head of research at Colliers Philippines, emphasized the region’s potential, noting that the Cavite-Laguna-Batangas-Rizal-Quezon (Calabarzon) region accounted for 15% of deployed migrant workers in 2022. This demographic trend is driving developers to pursue land banking and project launches in the area aggressively.
As demand for horizontal developments remains strong, particularly in the Southern Luzon region, the average price of a house and lot unit has seen a steady increase, reflecting the area’s growing economic significance.
