More companies, both local and international, are opening up offices in Metro Manila or scaling up current operations. The reason for this? Affordable office space. A new study from Santos Knight Frank found the Philippine capital has the second lowest gross effective rent in the Asia Pacific region.
Office rental prices rose by 2.4 percent in the second quarter with demand from the business process outsourcing (BPO) sector staying strong. This saw office vacancy in Metro Manila shrink to 4.5 percent. International firms, especially from China and South Korea, may continue to invest in the Philippines thanks to favorable demographics, affordable office space, strong macroeconomic fundamentals and the strength of the dollar.
“The IT-BPO sector occupied nearly 80 percent of prime office space last year, and we don’t see its growth momentum stopping anytime soon. Demand for office space in Manila remains extremely strong, reflecting the country’s solid position as one of Asia Pacific’s most important investment destinations,” Chairman and CEO of Santos Knight Frank, Rick Santos, states.
See more: Will 2018 be a record year for Philippines property?
Gross effective office rents in Metro Manila are currently 41 percent cheaper than Bangkok and 73 percent more affordable than Singapore. Even with rents increasing by nearly 11 percent in the last year, affordable office space can still be found throughout the city.
Affordable office space not the only option for business
Economic growth in the Philippines hit a three-year low of six percent in the second quarter of this year, but the country remains the third fastest growing economy in the region. This is good news for the property sector.
“Amid the slower growth, the property sector remains resilient with major segments such as office, residential and leisure poised for record-high demand and supply in 2018,” a recent report from Colliers International explained.
Many businesses are choosing to lease larger commercial blocks due to the affordable office space found throughout Metro Manila. However, there has been an increase in co-working facilities and serviced offices with the rise of freelancers, SMEs and a desire for flexible office solutions.
For example, Regus not only provides affordable office space, but also has hot desks and other popular co-working options. This flexibility ensures companies hoping to save on office costs or not wanting to be locked into a long-term contract have an option.
Regus has more than 20 facilities in Metro Manila and a few more locations in Cebu as well as a global presence. And with flexible membership plans, businesses are able to find a solution that works best for them regardless of it has local, national or global requirements.
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