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