BPO boom fuels property sector

Proximity to top workers and competitive lease prices have lured foreign business process outsourcing firms (BPO) to set up in Manila, according to the Center for International Trade Expositions and Missions (CITEM), the export promotion arm of the Department of Trade and Industry.

“BPO companies are not only on hiring binges, they are also in need of Grade A office spaces,” said Trade Assistant Secretary Fe Agoncillo-Reyes, executive director of CITEM. “For our commercial real estate developers, this strong demand is welcome.”

The influx of BPO providers and established names like GenPact, e-Telecare, Teletech, IBM-Daksh, Dell, and Ericsson Communication in 2006 is also part of the real estate boom the Philippines had in 2006.

According to a CB Richard Ellis report, a combined total of 120, 200 sq m office spaces have been allocated to new BPO locators in the first semester of 2006 alone and an estimated 60, 000 sq m of office spaces have been addded during the rest of the year.

Examples of the buildings that were leased to BPO firms in 2006 were Net Square and Bonifacio Global City developed by 19-1 Realty; EC IT Center in Mandaluyong by Greenfield; Plaza A, Northgate Cyberzone developed by Filinvest; and Cybergate 1&2 at Mandaluyong developed by Robinsons Land.
A big part of the real estate demand, added Agoncillo-Reyes, is BPO firms who are expanding in Manila.

For 2007, the need for grade A office spaces is being answered by property developers doing “build-to-suit” deals and cyberzones for companies who came to Manila for BPO work.

Ayala Land is developing UP Science and Tech Park in Quezon City. Robinsons Land is developing the cybergate in Mandaluyong City and Robinsons Cyberpark in Libis, Quezon City; Federal Land is spearheading development in the Bay Area, Pasay City and in Bonifacio Global City. Filinvest Land boasts of developing the first IT campus-type of low- to mid-rise buildings. SM Investments Corporation is also joining the bandwagon of developing properties for call centers and BPO like Dell and Teletech. Megaworld has new projects in McKinley Hill and Newport City just to name a few.

“Class A office spaces are not difficult to find these days. The BPO industry’s runaway growth over the years also bring vibrancy to the property sector,” said Agoncillo-Reyes.

For information about BPO/IT sectors, please contact CITEM’s IT Services Division at 831-2201 loc 301 or email itservices@citem.com.ph