Santos Knight Frank, a real estate service company, said the business process outsourcing sector would remain as a major driver of demand for office space market in the country.
In a report, Santos Knight Frank Senior Director for Occupier Services and Commercial Agency Morgan McGilvary said office space demand from BPO firms remains strong in 2020 even after the government halted processing applications for economic zones in Metro Manila.
In June 2019, Malacañang issued a moratorium on accrediting office buildings in Metro Manila as ecozones to spur development outside the National Capital Region.
Despite the moratorium, Santos Knight Frank said BPO companies would still pursue expansions in Metro Manila.
A study of Information Technology and Business Process Association of the Philippines and Everest forecasted that the IT and business process management sector would grow by three percent to seven percent annually.
Growth drivers of the industry would be in healthcare, animation, and game development.
With the growth of the industry, it would need 1.2 million square meters of office space, Santos Knight Frank added.
“In 2020, we expect BPO demand to be strong despite the limited amount of PEZA (Philippine Economic Zone Authority)-accredited office space. BPO demand is strongest in BGC (Bonifacio Global City) and Pasay, where rents should be going up,” McGilvary added.
On the other hand, Ortigas and Quezon City can be alternative locations for BPO firms with the increasing rents in BGC and Pasay City.
“Conversely, Ortigas and Quezon City may have more supply than demand, and rents will stay flat in those areas as the vacancy rates increase,” Morgan said.
The IT-BPO industry is seen to employ 1.57 million by 2022.