Colliers International, a global real estate company, said developers should build office towers within the Philippine Economic Zone Authority (PEZA)-proclaimed properties as outsourcing firms have occupied most of the office spaces in Bacolod City.
Joey Bondoc, Colliers International senior research manager, said developers should also develop larger floor plates for consolidation of tenants, offer more plug-and-play offices, and tweak the tenancy mixes of their retail podiums to attract or retain occupants.
He also encouraged tenants to partner with government-run training centers to upgrade employees’ skills and keep an eye on new office towers due to be completed in the city this year until 2021.
This is because office vacancies in the city remained low despite the addition of new office structures due to the demand of the outsourcing firms, Bondoc said in a press release.
“The expansion of these companies as well as growing queries for office space has compelled other national developers to offer leasable space,” he said.
In 2018, Ayala Land opened the Bacolod Capitol Corporate Center that is about 11,000 square meters to the city’s leasable office stock, he said, adding that it raised the city’s stock to 118,500 square meters.
Ayala also plans to offer an additional 7,800 square meters of new office space in its Bacolod Capitol Central mall, he said, adding that it is due for completion this year.
He added that Megaworld will likely build two business process outsourcing buildings in 2021 while SM Prime Holdings also plans to develop a BPO tower within its complex.
The provincial government’s Negros First CyberCentre Phase 2 and another Bacolod City-based developer are due to deliver around 15,000 square meters of office spaces from this year to 2021, he said.
He said the overall vacancy in Bacolod increased slightly to 5 percent in 2018 from 4.5 percent in 2017, as smaller and non-outsourcing firms, such as banks, law offices, and insurance companies took newer spaces.
“There was no significant increase in vacancy despite the completion of the Bacolod City Capitol Centre as an outsourcing company occupied the building’s entire space. The increase in office stock, coupled with additional demand from BPO firms and minimal take-up from traditional companies like firms and government agencies and non-BPO businesses, maintained the overall vacancy rate in Bacolod City,” he added.
Bondoc said demand is likely to be driven by supply. “The new space to be developed over the next three years should easily attract tenants, especially those within PEZA-proclaimed properties. Despite new supply coming in from 2019 to 2021, Colliers sees vacancy rising to only about 7 percent per year,” he added.
He said PEZA-proclaimed property enables tenants to avail of tax and non-tax incentives. However, the slow proclamation of PEZA facilities could derail the expansion plans of cost-sensitive outsourcing firms in alternative sites, such as Bacolod.
“In our opinion, developers should look at the viability of the two PEZA-accredited properties in the city, including the 20,000 square meters-Bacolod IT Park located along Estefania Village and the 26,400 square meters-AIU Centre along Lacson Street where office towers could be built,” he added.*
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