LEECHIU Property Consultants (LPC) said that local office demand has breached one million square meters (sq.m.) as of Dec. 13 led by demand from the information technology and business process outsourcing (IT-BPO) sector.
LPC Director for Commercial Leasing Mikko Barranda said during a media briefing in Makati City on Wednesday that office demand stood at 1.07 million sq.m., up 8% from 988,000 sq.m. in the same period a year ago.
“Based on the figures we’ve recorded as of Dec. 13, we already reached that mark and we’re about to conclude the year above 1 million sq.m.,” he added.
According to Mr. Barranda, the country’s office space demand has been carried by the IT-BPO sector.
“The business itself has expanded their footprint in terms of employment. The base has expanded. It’s just a question of how much of that will report to the office versus those working remotely,” Mr. Barranda said.
“Despite the hybrid setup, the IT-BPO industry remains the primary driver of demand,” he added.
Mr. Barranda said that the office vacancy rate in the Philippines stands at 18%, equivalent to 3.3 million sq.m.
He added that 520,000 sq.m. of current live requirements are expected to extend into next year.
“We have conservatively also based our projections on what we’re seeing today since there’s 500,000 sq.m. of live demand as we enter 2024. It should be a sign for us to continue that same trajectory,” Mr. Barranda said.
“We predict a deceleration in contractions and vacancy levels starting next year. Approximately 711,000 sq.m. of new vacancy will be added to the supply by next year,” he added.
Recently, the Information Technology and Business Process Association of the Philippines (IBPAP) said the IT-BPM industry is expected to record 8.8% growth in terms of revenue to $35.4 billion this year.
“The growth sectors are healthcare; all the global healthcare companies are already here, banking and finance; and of course, the contact centers,” IBPAP President Jack Madrid said.
“We don’t have a problem with demand. There’s a lot of demand for the Philippines. Our challenge is the supply of employees, we need more employees,” he added. — Revin Mikhael D. Ochave
