Gen Zers, Millennials fuel PHL co-working space boom

The co-working or flexible office segment is poised for growth despite increasing return-to-office mandates.

“We expect demand for the sector to be fueled by companies that continue to employ hybrid work arrangements, multinational corporations and business process outsourcing firms requiring temporary spaces for employees, and small businesses and startups that are looking for an office or address within the central business districts,” Janlo C. De Los Reyes, head of research and strategic consulting at JLL Philippines. said.

He noted that the appeal of co-working spaces lies in their flexibility, letting companies easily scale up or down without the long-term commitments of traditional office leases.

Data from JLL Philippines showed a healthy occupancy rate of 89.6% for co-working spaces in Makati and Bonifacio Global City in Taguig, two of Metro Manila’s key business districts.

Colliers Philippines has also observed strong demand driven by hybrid work setups, noting that many firms have yet to return to pre-pandemic leasing patterns.

“More companies have also been implementing 100% return to office, and this is a signal that landlords need to be more proactive in offering flexible lease terms,” Colliers said in a report.

The overall flexible workspace vacancy in Metro Manila rose to 17.5% at the end of last year from 16.7% a year earlier. However, Colliers noted that this was still a major improvement from the record 41% vacancy rate in the first quarter of 2021.

Fort Bonifacio led with the highest number of occupied co-working seats at 12,000; followed by Makati with 10,000; Quezon City with 7,000; Ortigas with 4,000; Mandaluyong with 2,000; Alabang, Muntinlupa with 1,000; and the Bay Area in Pasay City with 437, according to Colliers.

International Workplace Group Plc (IWG), a multinational office solution provider, is bullish on the Philippines’ flexible workspace market.

“The co-working space is the fastest-growing segment within commercial real estate,” IWG Philippines Country Manager Lars Wittig said. He added that the departure of Philippine offshore gaming operators (POGO), which used to be major office lessees, has accelerated demand for flexible workspaces.

“The exit of POGOs is accelerating our network development because now, the partners feel an even greater urge to come to us to seek our partnership to be able to fulfill the demand for flexible workspace,” Mr. Wittig said.

President Ferdinand R. Marcos, Jr. last year ordered a total ban on POGOs due to their reported links to organized crime including human trafficking.

IWG expects to open its 50^th location in the Philippines this year and signed its 61^st center, which will be in Makati, in March.

“With the golden era for the country, the many more good jobs being created, what you do see is that the companies continue to be rightsizing — meaning downsizing their conventional leases — which again means that the demand is gravitating over to flexible workspaces,” Mr. Wittig said.

He also said hybrid work setups have become a tool to attract talent. “Employers are now offering hybrid working to attract and retain young talent who prefers this setup instead of going to the office.”

‘CHILL MOOD’

Mr. Oreta, for his part, agrees that the younger workforce is challenging the norms of traditional office work.

“Millennials want a chill-mood kind of work,” he said. “They want to be at the beach, at the party, or wherever they want to be. They just want to do their work and chill.”

He noted that workers like him are not bound by the traditional 9-to-5 schedule. He usually stays until 2 a.m. to finish his work.

“It is nice that the conventional type of work is broken now,” he said. “Because we’re not talking about ‘this is the proper place, this is the proper thing to do.’ We are talking more of productivity.”

“We have the freedom to choose wherever we want to work, as long as your productivity is standard,” he added.

Mr. De Los Reyes said flexible workspaces are cost-effective for startups and smaller businesses, which don’t need a large office space.

Smaller players in the co-working space sector are also seeing a surge in interest, particularly from freelancers and students.

“While independent professionals still make up a big portion of our clients, we’ve also noticed a surge in small businesses and even corporate teams opting for flexible workspaces instead of traditional office leases,” Alcariza R. Peregrino, managing partner at The Hangout: Coworking Space, said.

“The demand is shifting towards spaces that are cost-efficient, collaborative and hassle-free, and that’s exactly what we offer,” she added.

The Hangout offers rates of P250 for four hours, P500 for eight hours, and P10,500 for a full month. Students can avail themselves of hourly rates as low as P70. Monthly membership for hot desks starts at P7,500 and P10,000 for fixed desks.

The facility also offers virtual office services — letting users list a business address without renting a physical desk — starting at P3,000 a month. These include mail handling, receptionist support and day passes.

During a visit to The Hangout, professionals from diverse backgrounds were seen using the space, including an English teacher conducting lessons over Zoom and corporate workers in casual attire focused on their laptops.

Amenities include fast internet, unlimited coffee, lounges, books, board games and flexible workspace areas designed to balance work and relaxation.

“We’re proud of what we’ve built here, but we’re also looking ahead,” Ms. Peregrino said. “Our vision is to expand into more key areas like Quezon City, Manila and Makati, where demand for flexible workspaces is high.”

Monthly rental rates for flexible workspaces vary depending on the district, according to Colliers. Seats cost P8,000 to P20,000 in Ortigas; P7,000 to P18,000 in Quezon City;

P7,000 to P19,000 in Alabang; P8,000 to P25,000 in Mandaluyong; P8,000 to P38,000 in Makati; P13,000 to P25,000 in Fort Bonifacio; and P15,000 to P20,000 in the Bay Area.

The rise in online jobs and remote work has also fueled demand for co-working spaces outside Metro Manila.

In Cavite, The Quiet Corner has emerged as the first co-working facility in Indang, Cavite. The Quiet Corner is the only co-working space in the town, making it a top choice for students, professionals and remote workers in the area, according to the firm.

“The demand has been strong due to the lack of similar workspaces nearby, and we continue to see consistent occupancy throughout the week,” it added.

Source: Business World

Filipino youth are optimistic for the future

More than four in five Filipino youth have a positive outlook for the next five years, according to a new collaborative study by Vero Advocacy and Kadence International. However, this optimism is tempered by a strong demand for urgent reforms in employment, education, and healthcare.

The study surveyed over 2,700 Gen Z and Millennials across six Southeast Asian countries, including 453 respondents from the Philippines. Vero Advocacy, a government relations arm, and Kadence International, a global market research agency, aim to explore the shared perspectives of these generations, uncovering their aspirations and challenges to help guide governments and the private sector in developing policies and initiatives that address current needs and drive long-term growth.

According to the survey, 43% of Gen Z Filipinos expect a “much better” future, and 42% anticipate a “better” life in the next five years – only slightly higher than the combined optimism rate of Millennial Filipinos, which stands at 84%. Overall, Filipino youth are more optimistic than their peers in Singapore (69%) and Malaysia (77%), with similar levels of hope for the future as young people in Indonesia (89%), Vietnam (89%), and Thailand (87%).

Both Gen Zs and Millennials in the Philippines, however, identified employment opportunities, quality education, and accessible healthcare as their top challenges. Though these issues are prevalent across the surveyed markets, satisfaction rates for these three areas of concern were the lowest among Filipino respondents. Other concerns include environmental protection, affordable housing, and effective taxation and resource management.

Employment opportunities – or the lack thereof – create uncertainty

Many young Filipinos feel uncertain about their professional futures, with 35% of Gen Z and Millennial respondents expressing a dissatisfaction over job security. Indeed, Filipino youth were the least satisfied with job security among the six countries surveyed, with a 29% satisfaction rate that lags far behind the second lowest satisfaction rate of 43% for Malaysia.

It comes as no surprise, then, that 31% of Gen Z Filipinos and 36% of Millennial Filipinos ranked employment opportunities as the top challenge they face, with most citing a lack of jobs as a key issue. For these young generations, securing a stable job is directly tied to achieving a stable life, as it ensures not just the ability to meet daily needs, but also long-term access to healthcare, housing, and further education.

To help address this issue, Filipino youth are calling for job creation programs and better employment services like career counseling and job placement schemes. These can provide students with the mentorship and opportunities they need to succeed in their chosen careers. Many also feel that additional training and education can help bridge the gap between workers and employers, helping young people align their skills with the evolving work landscape and establish sustainable careers.

High education costs education limit opportunities for Filipino youth

As with job security, Filipinos are the least satisfied with the cost of education in the region, with a satisfaction rate of 43% for Gen Z and 38% for Millennials.

Most respondents cited high costs as the main impediment to accessing quality education in the country, as families must contend with not just tuition, but also other school-related expenses like books, notebooks, uniforms, daily allowance, and special projects, school year after school year. The high cost of education is one of the main reasons why many young people forego secondary and tertiary education in the country, which further limits their employment opportunities and prevents them from building stable careers—and, by extension, a stable future.

Aside from cost, 31% of Gen Z and 30% of Millennial Filipinos cite the quality of education as the top challenge faced by the country. Many believe that the government should prioritize investments in educational facilities and technology, as well as enhanced professional development for educators. Gen Z Filipinos were more likely to indicate more support for students with special needs as something they would like to see in the future, while Millennial Filipinos raise the importance of regular review of and updates to school curricula to better prepare students for the future.

Healthcare access remains elusive for Filipino youth

Despite healthcare being a constitutional right, six out of ten Filipinos die without seeing a doctor, according to statistics from the Department of Health. Access to healthcare remains elusive for most Filipinos, with 10% of Filipino Gen Zs and 14% of Filipino Millennials citing it as the top challenge faced by the country.

Similar to employment opportunities and education costs, Philippine satisfaction rates for healthcare are the lowest in the regional survey, with only 36% of Filipino youth (39% of Gen Z and 34% of Millennials) saying they are satisfied with the current healthcare system in the country. 50% indicate that the high costs of healthcare services and treatments are a major challenge to accessing healthcare, while 25% point to the limited availability of facilities and equipment.

To improve the situation, survey respondents feel that the government must address issues of affordability, accessibility, and quality of healthcare services in the country.

Affordable housing options and better living conditions:

Young Southeast Asians, who are ushering in a new wave of urban mobility as they seek education and careers in major cities, dream of homes that offer comfort, security, and access to essential services, such as public transport, healthcare, and education. This is often tied to the broader goal of becoming financially independent and moving out of their family homes in the name of freedom, convenience, and personal growth.

All hands in: Recommendations for public policy and private initiatives

“As Southeast Asia’s youth are poised to drive the region’s future,” explained Pongsiri, Managing Partner at Vero Advocacy, “addressing these challenges is not just beneficial but essential for harnessing their full potential and ensuring a sustainable and inclusive economic growth.”

With its expertise in government relations in Southeast Asia, Vero Advocacy recognizes the essential link between youth, private stakeholders, and government. By understanding young people’s concerns, Vero Advocacy underscores the need for meaningful engagement and effective responses from governments and companies to create inclusive and sustainable policies and initiatives.

• Youth-Centric Policies – Governments should prioritize initiatives that guarantee access to quality education, expand job opportunities, and improve healthcare affordability and accessibility. By focusing on these areas, they can create a supportive environment for young people to thrive.

• Genuine Youth Engagement – It is crucial to involve young people in policy dialogues and decision-making processes. Their insights and perspectives should be actively sought, ensuring that their voices are both heard and valued in shaping policies that impact their future.

• Dedicated Spaces for Youth Advocacy – Establishing dedicated forums or platforms where youth can freely share their advocacy efforts is vital. These spaces should facilitate open dialogue, encourage innovative thinking, and provide opportunities for young individuals to highlight their contributions to national development.

• Support for Entrepreneurs – The private sector should develop entrepreneurial programs that leverage existing resources and expertise. By offering funding and training, businesses can nurture creativity and business acumen, empowering a new generation of innovators and leaders.

• Corporate Social Responsibility – Businesses should embed youth-centric goals into their Corporate Social Responsibility (CSR) strategies, focusing on initiatives that uplift communities and address social issues pertinent to young people. This alignment will foster a more inclusive approach to social development.

“With Gen Z and Millennials comprising over half of the Philippine population, it is critical for leaders and changemakers to listen to their needs,” said Gio Tingson, Youth Advocate and former Chairperson of the National Youth Commission. “Many of us often hear and repeat Dr. Jose Rizal’s statement about youth being the hope of the motherland. But while it is true that young people are eager to effect change, it is just as important for us to listen to them and empower them with the tools they need to succeed and build a future that is sustainable for all.”

Source: Adobo Mag

Filipino Gen Zs prioritize self-reward when shopping, study finds

Filipino Gen Z spend primarily to reward themselves, according to a joint study by the Filipino-focused sociocultural research firm The Fourth Wall and communications firm Uniquecorn Strategies.

About three out of four Filipino Gen Z consumers living in urban areas said they shop online because they believe that they deserve it. This shopping philosophy is driven by their desire for happiness, fear of missing out on trends, and the need to reward themselves for overcoming work or study-related stress.

The survey revealed that 50% of a typical Filipino Gen Z’s finances come from parental allowances, while the other 50% come from full-time work, businesses, or side gigs. On average, they make six online purchases per month, ranging from a minimum of one to a maximum of 10.

“The young generation is rapidly becoming a significant portion of the consumer market, and is already shaping market trends, especially the e-commerce space,” said John Brylle L. Bae, research director at The Fourth Wall.

“This self-rewarding behavior among Filipino Gen Zs stem from their growing self-awareness, driving them to seek rewards that affirm that sense of self-worth,” he added.

Mr. Bae also attributed this behavior to the Filipino “sayang” mindset, where daily struggles and deprivations lead them to seize rewarding opportunities out of fear of missing out.

The study adds that urban Filipino Gen Zs are intelligent buyers as they splurge based on quality (81%) and price competitiveness (10%). They are most likely to repurchase from the same brand that consistently delivers high-quality and affordable products, but are also willing to try other brands even if they are emotionally attached to their current ones.

The study also found that Filipino Gen Zs buy based on trust and personal affinity. Upon hearing about a product, 81% of them do not purchase immediately but search customer reviews first on shopping platforms and Google.

They still primarily rely on word of mouth to discover products (60%), while others rank social commerce ads (59%) as important to their shopping experience. They take cues from the people they deeply trust, friends, and family. They are also more influenced by honest, objective or out-of-pocket reviews from influencers or content creators with appropriate expertise.

Gen Z is known as the first generation to grow up with the internet and digital devices practically glued to their hands, which means they prefer the convenience of online shopping. Almost all the respondents (92%) use their own mobile phones for purchases and prefer cashless payment methods (53%).

Given this, Uniquecorn Strategies Founder and CEO Dean Bernales said that it is important to understand the consumer behavior of the younger generation.

“Online retailers should pay close attention to the shopping desires and needs of Filipino Gen Zs. Brands need to reassess their supply chain strategies and enhance their social commerce platforms to build trust, create personal connections, and develop a relatable image to capture the young market,” Mr. Bernales said.

As a result, the study identifies several key opportunities for brands to connect with Filipino Gen Z consumers more effectively. There is a significant potential for advertising on more personal yet credible emerging media platforms such as podcasts. Brands can leverage self-expression and identity in their branding to establish a personal affinity with target customer personas.

Additionally, adapting different messaging strategies and formats to align with influencers’ content can appeal to their niche audiences. Creating personalized subscription models for fast-moving consumer goods (FMCGs) can offer an immersive experience while promoting convenience and catering to personal preferences.

Tapping into Gen Z’s hobbies, interests, and desired personal images when developing brands, products, and services can further enhance their engagement and loyalty.

Citing prior research, the study noted that there are about 41 million Gen Zs in the Philippines, making up for about 38% of the total population, according to Philippine Statistics Authority’s latest official 2020 census.

Source: Business World