BPO space oversupply seen to remain until 2012

FILINVEST Land Inc. (FLI) said the oversupply in business process outsourcing (BPO) office space in Metro Manila would persist in the next three years.

Joseph Yap, FLI president and chief executive, said the demand for BPO space in Metro Manila remains, but several developers already noted a glut in available supply.

“What’s the problem facing the market now is, this time, there is an oversupply. It would take about two to three-years to consume the excess that are being or have been constructed by several developers,” he told reporters.

Jones Lang LaSalle Leechiu earlier said the office space glut is likely to continue until mid-2010, with an estimated 456,891 square meters of office space running on stream by this time.

Quezon City and Fort Boni-facio are the two growth areas for BPO office space. But many BPO firms are considering the transfer of part of their operations to areas outside Manila to cut on costs and tap fresh manpower resources, the property consulting firm said.

FLI continued to show positive growth in sales despite the economic crisis, Yap said.

“There will be a reasonable growth for the rest of the year and next, but not the growth we saw in the past years, but not a slow down,” he said.

The main growth driver would still be money sent home by overseas Filipino workers, he said, adding that, “as long as that continues to show growth, there will be growth in the property sector.”

This year, FLI has set aside P4 billion for capital expenditures, the bulk of which will come from the P5 billion proceeds from the sale of retail bonds.

Yap said the borrowing would be launched by the middle of next month, adding that the funds raised would finance the company’s several developments. –Chino S. Leyco, Reporter, Manila Times