Demand for flexible workspace surges in PHL

Demand for flexible workspace surged in Metro Manila this year, unlike other Asian cities which continued to see a slump, according to The Instant Group.

“Metro Manila is predicted to see record demand levels this year, up 112% on pre-pandemic levels. The flex industry across Metro Manila has continued to strengthen, driven by the widespread adoption of hybrid working models from a wider selection of industries and larger occupiers,” Instant said in a Nov. 3 report.

It noted the Philippines is still a very attractive market for international companies and business process outsourcing (BPO) firms due to the low labor costs and diverse talent pool.

Instant noted that many BPOs are now using flexible workspaces as part of their long-term hybrid work solutions amid the coronavirus pandemic.

“Strong demand growth across Metro Manila has resulted in desk rates increasing across all business hubs as it becomes a seller’s market. As demand shifts outside Makati City, rates in Ortigas and Taguig City are overtaking those in the Central Cluster,” it said.

According to Instant, Manila had the highest desk rate at $291 per month, followed by Taguig City and Bonifacio Global City with $273.

The desk rate in Ortigas stood at $264, while the rate in Makati City is at $235. Quezon City is the most affordable with an average desk rate of $216 per month.

Demand for flexible workspaces in Ortigas increased 83% this year from a year ago, the fastest growth in Metro Manila, Instant said.

Instant noted that growing demand and supply struggles will push desk rates for flexible office spaces even higher.

“Although supply is expanding, demand is predicted to potentially outstrip supply, so further investment is needed to keep pace. High vacancy rates in the traditional sector means that there is significant room for growth,” it said.

Data from Instant showed KMC Solutions had a 15% share in the country’s flexible workspace market, followed by IWG’s 10%, vOffice’s 3% and WeWork’s 2%.

“The Philippines is proving to be an attractive location for multinationals. As demand increases, the real estate solutions available are becoming more sophisticated in terms of both flexibility and cost reduction, but employers are also realizing that they need to provide a real estate solution that will attract employees as the labor market becomes more and more competitive,” Sean Lynch, managing director of The Instant Group Asia Pacific, said.

The Instant Group is described as a global workspace innovation firm and largest global marketplace for flexible workspace.

Source: BusinessWorld

Property consultancy firm estimates POGO exit losses

Property constancy firm Leechiu Property Consultants, Inc. (LPC) said the complete exit of the remaining Philippine offshore gaming operations (POGO) would exacerbate the constraints placed by the pandemic on the real-estate sector.

David T. Leechiu, LPC chief executive officer, said the full exit of the POGO industry will bring a higher incidence of foreclosures for the office sector as well as drop rental rates in the country.

“A full exit of the POGO industry is expected to not only accumulate further losses in sources of income and tax but also increase office vacancies and push rental rates further down than the pandemic,” Leechiu told reporters in a briefing.

Based on industry data, the cumulated losses of the office space segment already amounted P45 billion since the pandemic began in 2020.

If the government decides to ban POGOs in the country, around 1.05 million square meter additional official space will be vacated by offshore gaming firms, resulting in another P18.9 billion in rental fee losses.

Moreover, Leechiu said around P28.6 billion in annual housing rentals from POGO’s 2.4 million square meter residential space will also be lost from the exit.

Aside from the property sector, other industries, such as utilities, services, and the government, would also feel the pinch from failing POGOs.

Leechiu noted that for electricity alone, a full POGO exit would cost power distribution companies about P9.8 billion in unrealized income.

For the services sector, the estimated loss was at P11.4 billion, representing POGO’s spending on commissary meals. Another P952 million in daily spending will also be incurred.

Contractors for fitting out office buildings would also suffer an estimated annual loss of P52.5 billion, Leechiu said.

For the government, Leechiu said the Philippine Amusement and Gaming Corp. will forego P5.25 billion in regulatory fees, while the Bureau of Internal Revenue (BIR) is poised to lose P5.8 billion in taxes.

In addition, Leechiu said the BIR could no longer collect around P54.3 billion to P57.1 billion in income taxes from foreign POGO employees.

Local employment will also be affected, as about 347,000 Filipino jobs rely on the POGO sector, he said.

“We’re going to get another economic driver, the POGO sector, which is so critical also to the economy, and we’re going to try to shut them down,” Leechiu said. “This is not the time to shut things down. This is the time to increase the momentum of the economy.”

He admitted that illegal POGOs bring in some social ills to the country, “but I think the hardest social ill is joblessness, underemployment and underpaid workers.”

Instead of a total POGO ban, Leechiu suggested that the government should strictly enforce the law .

“Shutdown or process those illegal POGOs to make them legal. Enforce drug enforcement. Don’t allow people to get kidnap, I don’t know how you do that, maybe better technology to secure the population,” he said concluded.

Source: Manila Bulletin

Building smarter, greener offices is the way to go

Smarter and greener buildings are fast becoming the norm in the Philippines, with more and more property developers taking action to address climate change and to embrace the available advanced technologies.

The building and construction industry has been continuously evolving to cater to the ever-changing environment. Sustainability initiatives, smart technologies, and increased safety standards for occupiers’ well-being have been shaping the transformation of new buildings’ design and features.

The industry has a significant impact on the economy, society, and the environment. It plays a crucial role in the economy, driving jobs and growth. An article published by Industry Tap noted that the building and construction industry accounts for about 13% of the global gross domestic product (GDP).

The construction and building industry touch every kind of business: it provides shelter, infrastructure, manufacturing facilities, and many others. The quality of the buildings it produces leaves a lasting impact on the lives of people.

Amid continued expansion and growth, its environmental impact cannot be left unnoticed as it accounts for 39% of carbon emissions. This figure is alarming and calls for an improvement in the quality of construction and the materials used. The unprecedented global pandemic has contributed to the acceleration of innovation across industry.

These innovations have given rise to key trends shaping the construction industry. These trends focus on sustainability initiatives, well-being, and the integration of smart technologies into the building management system.

Looking at the Philippine construction industry, it can be observed that the country is steadily keeping up with the trends. Many buildings now are becoming more digitized and have more sustainable features not just to reduce cost but also to lessen their carbon footprint.

Many domestic players are also exploring the potential benefits of incorporating artificial intelligence and machine learning to their building management systems (BMS). Artificial intelligence, for instance, can be used in crucial building operational systems, such as energy management, enhanced HVAC system for optimal comfort, and predictive maintenance.

Aside from artificial intelligence, sustainability features are also a major consideration for real estate developers. Being a sector with the largest contribution to greenhouse gas emissions, it is safe to say that the real estate industry has a responsibility in creating a greener and more sustainable built environment.

As the world transitions to a new normal, the building and construction industry is also transforming to cater to the needs and ensure the well-being of their building users. Returning to a safe workplace is now one of the top considerations; therefore, developers are investing more in innovations that will not only ensure productivity but will also provide a sense of safety. One such innovation is contactless or touchless systems, such as sensors, access cards, and facial recognition software. These features will help lessen the risk of transmission not only of the COVID-19 virus but also other pathogens.

To further promote sustainability, there are a number of globally recognized green building certifications that building owners and developers can take advantage of as a way to reduce their properties’ environmental impact. Aside from affording their client-occupiers the appropriate credentials to satisfy their ESG (Environmental, Social, and Governance) standards, many are now attributing the importance of green and sustainable buildings to staff productivity, health, and overall happiness.

Sustainability in the built environment is not just an option, rather it is now a must-have. We believe that the future of office buildings leans towards creating spaces that are safer and healthier with minimal impact on the environment. Many studies have shown that green and sustainable buildings not only have an impact on any business’ balance sheet, they also have lasting benefits on people and the communities where they are located.

Colliers Philippines believes that the development of greener and more sustainable spaces will be the norm moving forward. The pandemic has highlighted the need for these spaces. Sustainability will play a crucial role as we lure more employees to report back to traditional office spaces.

The rise of green and sustainable buildings is also evident in the Philippines. Local developers have successfully integrated green and sustainable features and have acquired green certification from different international organizations such as the LEED certification by US Green Building Council (USGBC) and EDGE by International Finance Corp.

Notable green and sustainable feature of LEED/ EDGE certified buildings in the Philippines include water and energy efficient technologies such as vertical green wall, a rainwater harvesting system, green roof, and double-glazed glass curtain walls for increase energy efficiency.

Additional smart features that make the buildings more resource efficient is the BMS that cuts energy expenditures and consumption. Aside from offering top-notch office spaces and amenities to its occupiers, developers can also take note of these features especially if they are planning to be more resource efficient, acquire green certification and leave a lasting positive impact on the built environment.

Source: Business World