Office space in Manila has increased the most in the past 26 years as the city caters to firms like International Business Machines Corp. and American Express Co. These firms are outsourcing work to the Philippines, adding jobs on a regular basis.
In order to meet the demand of BPO services, 710,000 sqm of office space is expected to be added in 2016 and more than 780,000 sqm of office space will be added in 2017. This is a record for the workspace built in a year.
The increase in demand will cap rent and drive higher vacancies. Office rent will remain the same for the year 2016, unlike the 5% hike in 2015. The vacancy rate increased from 3.4% in 2015 to 5.6% in 2016.
Megaworld controls 80% of the office space in the Philippines, making it the largest owner of work space. 30% of the space is occupied by call centers.
Companies such as JP Morgan, American Express, and IBM are outsourcing work to the Philippines. They offer more than just outsourcing call center jobs.
Ayala Land Inc. and LT Group’s property unit are planning on adding more office space in the next 5 years.