According to the latest Metro Manila Marketview Report prepared by real estate advisory firm CB Richard Ellis Philippines (CBRE), the demand for office space will continue to increase until 2017. The influx of foreign companies in need of commercial establishments such as BPO firms has contributed to the growth of demand.
The report also says that Metro Manila offers reasonably priced locations for companies seeking cost efficiency. Thus, BPO firms are inclined to set up their operations in the Philippines.
Makati Central Business District, for example, has continued to attract multinational corporations because of its accessibility and proximity to other commercial institutions. The vacancy rate in the business city went down to 4.27% in the second quarter of 2013 from 5.07% in the previous quarter.
This kind of trend is obviously good for the economy, particularly for real estate.
The situation at present gives real estate companies the chance to concentrate on commercial aspect of their business. There is a need for them to focus on developing office buildings because of certain reasons.
First, commercial real estate can provide them a cushion or a shield just in case the residential market goes down. They will definitely have a difficult time in mitigating the effects of a possible failure if they don’t improve the development of their office leasing business, which is an alternative source of income.
Second, commercial real estate in terms of office buildings has a lot of potential. If they don’t take advantage of it as early as now, other competitors will reap the benefits that they could get.
Therefore, real estate companies should put more effort in developing their office space sector. It will be beneficial for them if they further improve in this aspect.