Office demand recovers – Leechiu Property

The business process outsourcing (BPO) sector in the country has recovered, pushing office demand in the country in the second quarter of the year to its highest level since the pandemic struck, according to a study by Leechiu Property Consultants (LPC).

Demand for office space nationwide grew by 38 percent to 169,000 square meters in the second quarter from the previous quarter’s 122,000 sqm. 

Office demand is the highest it has been since the start of the pandemic, said LPC CEO David Leechiu.

With the latest data, Leechiu said the Philippine office market appears ready to take off and resume its pre-pandemic growth trajectory.

This brings first half 2021 demand for office space numbers to 291,000 sqm, already bulk of the entire 2020.  

“This is already 75 percent of demand for the entire 2020. There is no doubt that the Philippines is back on the radar of global occupiers,” Leeciu said. 

Of the total office demand, the BPO industry accounted for 92,000 sqm or 54 percent of the second quarter 2021 numbers. 

“It grew by 160 percent from the first quarter 2021’s 35,000 sqm driven by economic stability in the West,” Leechiu said.

In all, he said the latest data shows that BPOs are back even if they were relatively quiet last year, taking over the void left by some players in the Philippine Offshore Gaming Operators industry, some of which packed their bags and left the country due to tax issues. 

“The same fundamentals that attracted BPOs to the Philippines during the financial crisis of 2008 are once again working for us,” he said.

Leechiu said investor sentiment has improved with the rollout of COVID 19 vaccines.

On POGOs, the passage of Senate Bill 2232 which clarified tax concerns of POGOs are also helping. 

With this, POGOs, the main driver of the office market in the past years, are expected to revive their interest in the Philippine office market. 

“With the reopening of international borders, POGOs are expected to revive their interest in the Philippine office market and further prime the country’s economic recovery,” Leechiu said. 

All these events, he said, have aligned to support the Philippine office market. Its resurgence this quarter is a strong and clear indicator of recovery, the study concluded.