Posted on 08:57 PM, June 09, 2010 [ BusinessWorld Onine ]
THE OFFICE take-up rate at Bonifacio Global City overtook that of the country’s established financial capital, Makati, in 2009, indicating a shift in preferences for office locations, a study by Jones Lang LaSalle Leechiu has found.
The March study showed that approximately 293,000 square meters (sq. m.) of office space was taken up last year primarily in two major locations: Bonifacio Global City and Makati, in that order.
“While the difference in take-up between the two districts was not great last year, the gap is highly likely to widen in coming years,” according to Sheila Lobien, associate director of Jones Lang LaSalle Leechiu, the Philippine operation of global real estate services firm Jones Lang LaSalle.
A number of local and multinational companies have relocated to Bonifacio Global City “because it is able to offer a great business environment at competitive terms,” she said, noting that the tenant mix in new buildings is being dominated by business process outsourcing firms (BPO) and corporate tenants. These new buildings include Picadilly Star and Fort Legend.
For instance, Picadilly Star, a 26-storey office tower at the corner of Fourth Avenue and 27th Street, is now 70% leased out despite the fact that marketing began just two months ago. The building is within an accredited Philippine Economic Zone Authority area that offers tax and other incentives.
Ms. Lobien said the overall supply of new buildings that conform to the standards of multinational firms is currently limited and will continue to be tight over the next few months through 2012. Nevertheless, average demand from BPO locators is expected to remain consistent at 300,000 sq. m. annually, she said.
Firms doing outsourced work deliberately seek new buildings that meet their needs, she said. Older buildings, for instance, have centralized air-conditioning, “but if you are the only floor operating from 9 p. m. to 6 a. m., you want to pay only for the air-conditioning you need on your floors -- and no more,” she added.
Companies are also looking for more efficient spaces with ample elevator service and redundancy or backup service from telecom providers, she said. They also want transport services for workers, prompting developers of Bonifacio Global City to provide bus service from 6 a.m. up to 2 a.m. daily -- with buses passing through every 15 minutes during peak hours and every 30 minutes during off-peak hours.
Rents in Bonifacio Global City are not likely to always be lower than that of Makati’s prime spaces, she said. Rentals in Bonifacio Global City have already risen by 15% and may overtake rates offered by Makati’s Grade “A” buildings, she added.