Despite the onset and ongoing COVID-19 global pandemic, opportunities for the Philippines’ business process outsourcing (BPO) industry remain optimistic as the country remains as the most attractive destination for BPO investments especially with the country’s assets remain unchanged—competitive costs coupled with smart, young talent says real estate advisory firm, Santos Knight Frank.
Santos Knight Frank Chairman and Chief Executive Officer Rick Santos said in a statement last Tuesday, April 7, “Demand for BPO services will be ramped up by global companies which are cutting costs through outsourcing and offshoring.”
For the office market, Santos Knight Frank sees a decline for the remainder of this year for new office space to 810,000 square meters (sqm) from its initial forecast of 1.18 million sqm for 2020.
The advisory firm also encourages owners, landlords, developers, and tenants to adopt strategies amid the COVID-19 pandemic, such as:
1) Prioritizing cash and liquidity;
2) Providing a sense of security to tenants and customers;
3) Utilizing the space of existing real estate assets;
4) xploring payment structures; and
5) Investing on online platforms.
The vacancy rate in the office sector in Metro Manila will be higher at 10 percent this year from 5 percent in 2019.
“Reduced demand for co-working and flexible workspace as Covid-19 continues to impact SMEs (small and medium enterprises) and social distancing measures are implemented,” the advisory firm said.
It added rental rate is anticipated to be stagnant in the second quarter of 2020 and may also contract at some point further this year.
In 2019, office rental rates in Metro Manila increased by 6.87 percent averaging at PHP1,104.92 per sqm.
“We are experiencing a Black Swan event on a global scale that has slowed down the world economy and with it, the property market. Liquidity, flexibility, and business continuity are of utmost importance for companies to continue running,” Santos said.