ILOILO CITY continues to attract Business Process Outsourcing (BPO) companies that want to expand operations in the metropolis with the rising office spaces in 2018, assessed a Canadian-based global commercial real estate services firm.
“While the demand in Metro Manila has slowed, Iloilo remains an expansion hub for BPO investors since the demand for office space has been mainly driven by the BPO industry,” said Colliers International in its second quarter report.
“The provincial city has remained in the radar of foreign BPO investors. The number of educational institutions has also made Iloilo a center for learning in the Visayas region and consequently a viable area for companies to locate in,” it added.
Department of Trade and Industry had reported that US clinical solutions provider Shearwater Chief Financial Officer and Chief Operating Officer Tom Kendrot confirmed that they are opening a third operation center in Iloilo City in 2018.
Clearly, Colliers stressed the Iloilo office market has the foundations in place to cater to the growing BPO industry because it has the necessary elements which make it ripe for growth with the following advantages:
A reliable labor pool given the presence of major universities and colleges; supportive local government with programs in place to promote investment; and private sector that is willing to invest.
The company projects close to 46,100 square meters (sqm) of office space to come online in 2018.
Colliers noted that major developers will contribute to the supply with Megaworld’s Iloilo Festive Walk 1B with 10,800 sqm and Two Technoplace with 5,100 sqm; Ayala Land’s Atria Park District BPO 1 and 2 with about 18,000 sqm combined; and SM City Iloilo Tower 1 with 22,000 sqm. The biggest building to date is Megaworld’s Three Technoplace with 8,700 sqm, the lone completion this year.
“Buildings completed since 2016 are noticeably almost fully leased. This proves that demand is also driven by the available supply in the market,” Colliers stated.
It added that all the upcoming supply in the next three years will come from Mandurriao district which accounts for about 80 percent of the current total offices stock at 72,800 sqm.
Colliers “believed that demand for BPO spaces will likely continue given the aggressive promotion being undertaken by the local government as it aims to become a premier SMART (Service, Manufacturing, Agri-business, Arts and culture, Research and technology and Tourism) city of excellence.”
It also cited that “Iloilo ranks eighth overall among Highly Urbanized Cities (HUCs) based on the Cities and Municipalities Competitive Index of the National Competitiveness Council, and second in terms of government efficiency.” (Iloilo City PIO)