Property consultancy Lobien Realty Group (LRG) said about 400,000 square meters (sq.m.) of office space in Metro Manila will be occupied by information technology-business process management (IT-BPM) companies over the next six months as their employees return to onsite work.
Sheila Lobien, LRG chief executive officer, said this represents about 20 percent of the 2 million sq.m. of vacant office space lost to hybrid and work home setups especially from IT-BPM locators as well as the exodus of Philippine offshore gaming operators (POGOs).
This buoyed LRG’s optimism about the state of the Philippines’ office property market.
LRG said the back-to-office directive to IT-BPM companies operating in economic zones as well as the possible return of POGOs will increase demand for office space.
There are no estimates on the POGOs additional requirement but Lobien said POGOs used to occupy as much as 1.5 million sq.m. of space from 2015 onwards.
IT-BPM traditionally accounted for 30 percent of total Metro Manila office stock which is placed at 12 million sq.m.
Vacancy rate has reached 19 percent due to the pandemic.
LRG said with the new administration, clearer regulatory and taxation guidelines and the easing of mobility restrictions due to high vaccination rates and non-recurrence of COVID-10 surges, online gaming locators may return to the Philippines.
LRG said enhanced mobility has allowed companies to operate to pre-pandemic levels which will restart growth and increase demand for labor , and consequently, office spaces.
LRG said post-pandemic office arrangements will require larger office spaces to ensure social distancing to pandemic-proof office spaces.
Lobien said the standard for IT-BPM has been set at 6.5 sq.m. per staff.
LRG said although hybrid office arrangements are expected to be instituted by several companies, this is not expected to significantly affect the office space market due to the current telecommunications infrastructure and the preference of local businesses for physical presence of employees in the offices. – Irma Isip