June 2, 2010, 3:46pm [ manila bulletin online ]
Key real estate players look forward to the opportunities presented by the drop in the supply of office space which will be felt towards the end of 2010. Anticipating the new office development projects coming on-stream beginning the third quarter of 2010 until 2014, savvy industry observers are now positioning to fill the gap, according to analysts of Jones Lang La Salle Leechiu (JLLL).
Unlike in previous office construction booms, the risk of “building the wrong product” or office space that do not meet clients’ needs is more likely to happen these days, observed Andy Yates, director of JLLL’s Project and Development Services Group. His group serves the needs of around 30 multinational clients in the Philippines alone. Jones Lang LaSalle is a financial and professional services firm specializing in real estate and operates in 60 countries. In the Philippines, the company operates as Jones Lang LaSalle Leechiu.
He explained that business process outsourcing firms continue to drive demand for office development, estimated at a minimum of 300,000 sqm annually. Yet real estate lessors, particularly the medium-sized ones or smaller, can lose out on their business because they are unaware of this sector’s needs. A building with an emergency exit stairwell that does not conform to the specifications of the local building code for the large number of workers employed by BPOs, for instance, will not get high ratings from prospective lessees. Neither will a building that cannot accommodate a BPO’s signage, he said.
Having project-managed the fit-out of more that 300,000 sqm of office space for both global and local firms doing business in the Philippines, Yates’ team offers owners and investors advice on design, construction and risk management for new as well as existing buildings. Building owners, he said, tend to focus on a building’s aesthetics. He noted: “We help them refocus on making a property more efficient. We advise against curtain walls and expensive features that add to cost but not to more cost-effective BPO operations.”
When choosing a property, a BPO prioritizes large floor plates that are open and regular in shape to accommodate as many as 500 call center agents on a single floor, he explained. Such a floor plan favors high ceilings with extra room for all the cables and building services that must pass through them. “Otherwise, the place could tend to become claustrophobic.”
The opportunities for cost savings are highest during the initial and design stages of a project, according to Yates. “Corrections made during construction and after occupants have moved into a property are costly, disruptive and often unfeasible.”
Through simple value engineering, said Yates, a company can realize great savings. JLLL was able to generate savings of over P3 million for a multinational financial institute on a recent project in Makati by offering value engineering and cost saving options during the design and procurement stages of the project.