CB Richard Ellis (CBRE), a global leader in property services, described the Philippines as the "hottest" real estate hub in Southeast Asia in the Smart Investment and International Property Expo, one of the largest expositions of its kind in the region, held in Hong Kong a week ago.
The offshoring and outsourcing (O&O) boom in the Philippines has created new opportunities for the real estate market, according to CBRE Philippines General Manager Trent Frankum. "Major investors and businesses are looking at the Philippines because it is one of the largest English-speaking nations in the world and has 33.5 million Filipinos in the workforce," he explained. As a result, major multinational BPO operators are currently expanding their presence in the Philippines. He cited Accenture as an example, which has already leased 1.3 million square feet. Other companies, such as Teletech, have built facilities outside Metro Manila. All of Teletech’s six facilities are located outside the Philippine capital. In addition, major financial companies such as HSBC, Citigroup, and JPMorgan have been expanding Philippine sites of their respective customer support operations. HSBC currently has four locations, which totals to 859,200 square feet, and plans to open more sites. Citigroup and JPMorgan, on the other hand, have 214,812 and 107,400 square feet of space leased respectively. "Third party BPOs are not stopping in their expansion, with a handful such as Convergys, IBM, Sykes, TeleTech, and People Support already pursuing and have secured more sites in the country," Frankum noted. Other major O&O service providers continue to develop sites in Metro Manila and Metro Cebu. According to CBRE research, a total of 731,871 square meters of property in Metro Manila has been earmarked for new O&O facilities this year, with 189,614 square meters already pre-committed before commencing construction. "Offshoring and outsourcing will continue to drive demand for real estate, particularly in the office space market." Overeall, "Investment opportunities in tourism, infrastructure, mining, and real estate remain high in the Philippines," the CBRE GM stressed. "Foreign investors are looking at the positive effects of the stable Philippine peso, increasing tourist arrivals, the BPO boom, and the positive effect of overseas Filipino worker (OFW) dollar remittances into the country." Last year, tourist arrivals broke the two-million mark for the first time since 2004, with arrivals rising to 3.091 million. CBRE expects new markets, such as Russia, Middle East, China, and Korea, to sustain tourism growth. CBRE is also projecting arrivals to increase to 3.4 million this year and generate US$ 5.8 billion in international tourism receipts. In addition, hotel room occupancy rates rose to 73.06 percent in 2007 from 71.95% in 2006. "New hotel and resort developments are currently in strategic business locations such as Makati City, Fort Bonifacio, and the Bay Area as well as top tourist destinations such as Cebu and Boracay, further enhancing industry prospects," he pointed out. New development projects include the US$ 153 million Kingdom Hotel, a combined hotel and residential condominium that will rise in Makati City. "We expect 18,143 units to be provided from 28 upcoming residential condominiums in Makati that are targeted for completion between 2008 and 2013. Likewise in Fort Bonifacio, 11,652 units are expected to come on the market from 33 residential condominiums being constructed from 2008 to 2012." |