The Philippines isn’t building enough office space to meet demand from call centers and other outsourcing companies, Colliers International Property Consultants Inc. said.
Only 328,100 square meters of office space for outsourcing companies is being built in the country over the next five years, Richard Raymundo, a director of Collier’s Philippine unit said yesterday. That’s half the amount the industry requires if it grows at an expected 20 percent rate, he said.
“This deficit is pushing rents upward and that is why non–traditional office space format are being considered such as warehouses and shopping malls,” Raymundo said.
Call centers and outsourcing companies, such as eTelecare Global Solutions Inc. and Convergys Corp., are expanding in the Philippines, lured by the country’s English-speaking population. The number of call center seats will increase this year by 40,000 to 110,000, according to Richard Ellis, a rival property consultant, said in May.
Office vacancy rates in the nation’s major business districts, including Ortigas and Makati, will probably fall below five percent in the next 12 months, the lowest since 1997, because of demand horn outsourcing companies, Raymundo said.
Rents, which rose 20 percent in 2005, will probably increase at least 15 percent this year as office space supply tightens, he said.
“The five percent vacancy rate can easily be wiped out this year” because of continued growth in the business outsourcing services industry, Victor Manarang, executive vice president at the Chamber of Real Estate Builders Association Inc., said in the same briefing. —Philippine Star
-Bloomberg
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