Business Mirror
July 3, 2008
RP is ‘hottest real-estate market’ in
Southeast Asia, CBRE tells HK expo
By Rizal Raoul Reyes
Correspondent
COMMERCIAL real-estate services leader CB Richard Ellis (CBRE) has described the Philippines as the “hottest” real-estate hub in Southeast Asia.
CBRE Philippines general manager Trent Frankum spoke on the topic, “The Philippines: The Hottest Market in Southeast Asia,” on the second day of the expo, which showcased global real-estate market opportunities and featured property experts and investors from global companies headquartered in Asia, Australia and the UK.
“Investment opportunities in tourism, infrastructure, mining and real estate remain high in the Philippines,” said Frankum. “Foreign investors are looking at the positive effects of the stable Philippine peso, increasing tourist arrivals, the BPO [business-process outsourcing] boom, and the positive effect of overseas Filipino worker dollar remittances into the country.”
Meanwhile, the offshoring and outsourcing (O&O) boom in the Philippines has created new opportunities for the real-estate market, Frankum stressed. “Major investors and businesses are looking at the Philippines because it is one of the largest English-speaking nations in the world and has 33.5 million Filipinos in the work force,” Frankum noted.
As a result, major multinational BPO operators are currently expanding their presence in the Philippines, Frankum further said. As an example, he cited Accenture, which has already leased 1.3 million square feet. Other companies like TeleTech have built facilities outside Metro Manila. All of Teletech’s six facilities are located outside the Philippine capital.
In addition, major financial companies such as HSBC, Citigroup and JPMorgan have been expanding Philippine sites of their respective customer-support operations. HSBC currently has four locations, which total 859,200 square feet, and plans to open more sites.
Citigroup and JPMorgan, on the other hand, have 214,812 and 107,400 square feet of space leased, respectively. “Third-party BPOs are not stopping in their expansion, with a handful such as Convergys, IBM, Sykes, TeleTech and PeopleSupport already pursuing and have secured more sites in the country,” Frankum said.
Other major O&O service providers continue to develop sites in Metro Manila and Metro Cebu. According to CBRE research, a total of 731,871 square meters of property in Metro Manila has been earmarked for new O&O facilities this year, with 189,614 square meters already precommitted before commencing construction. “Offshoring and outsourcing will continue to drive demand for real estate, particularly in the office-space market,” Frankum said.
Manila Bulletin
Cheap rent attracts BPOs to Cebu
September 23, 2008
Malou M. Mozo
CEBU CITY — Cebu is fast becoming a preferred destination of business process outsourcing (BPO) companies due mainly to the competitive office space rates offered by owners of commercial buildings in the city.
"The situation of demand and supply of office spaces in Cebu is balanced. After completion of buildings, there are immediate take-ups. With the projected additional supply of office spaces, roughly from 40 to 50 percent are already taken up," said Ieyo de Guzman, Colliers International-Philippines (CIP) director for investment sales.
CIP develops a regular database that covers all sectors of the Philippine real estate market, identifying long-term trends for the benefit of its developer-clients.
"The fast take-up is due to the competitive rent rates," De Guzman said in an interview.
"Lately, though, they would look at Manila, check the rates there, and say ‘Forget Manila, we want to go to Cebu.’ This has been the trend," she said.
Based on a property market study of the Philippines conducted by CIP, De Guzman said, the monthly rent is between P800 and P1,100 per square meter for grade A office space, while prime areas are set above P1,100 per square meter per month.
Collier’s Cebu Market Property Overview noted that last year the office lease rate in Cebu City was at an average of P313 square meter (sqm) per month.
The same market study also showed that Cebu had an estimated 180,000 square meters of office accommodation in 2007, De Guzman said.
This year, Colliers projected an additional supply of 160,000 square meters catering mostly to BPO firms and other information-technology companies.
"The supply-and-demand situation for office spaces in Cebu is still on the normal level. It is a good indication of how realistic the projection of the developers here," said De Guzman.
De Guzman said Cebu, being the melting pot of economic activities in the Visayas, is attractive to BPO firms because of its ready manpower pool, established universities, cheap operation cost, and abundant supply of support amenities for lifestyle and relaxation.
"The lease rates in Cebu have made a plateau level, which is a good thing because it won’t scare BPOs. However, if Cebu’s rates catch up with those of Manila, potential investors would look at emerging competitive sites," she said.
However, the emerging sites -- such as Bacolod, Dumaguete, Leyte, among others -- need to be developed into a more investor-friendly hub complete with capital-intensive telecommunications infrastructure as well as significant supply of labor pool coming from the colleges and universities, De Guzman added.
I hope more BPOs will relocate in the provinces to bring more jobs in the countryside...
General Santos emerging as BPO hub in Central Mindanao
INQUIRER.net
First Posted 10:02:00 09/27/2008
GENERAL SANTOS CITY -- More business process outsourcing (BPO) offices are likely to open in Mindanao as key cities like General Santos continue developing business environments especially attractive to information technology (IT) firms.
"Mindanao and its major cities should be aggressive in their campaign to improve the talent, infrastructure and environment needed to advance in the sector of IT and IT-enabled services," said Maria Jamea Garcia, executive director for talent development of the Business Processing Association of the Philippines (BPAP).
According to BPAP, the country is well positioned to corner a 10-percent share of the global outsourcing and offshoring market by 2010, with potential revenues of about $13 billion and additional direct employment of close to one million workers.
Mindanao cities like General Santos, Iligan and Zamboanga have strong potential as competitive offshoring sites—particularly when the labor and infrastructure resources of their neighboring municipalities and provinces are factored in, according to USAID's Growth with Equity in Mindanao (GEM) Program, which is helping to facilitate BPO investment in the region.
"Developing these additional cities would help the Philippines achieve a more balanced distribution of growth [in the BPO sector]. This will ease some of the pressures on costs and help seed development in other parts of the country," Jamea said.
General Santos City, or is the trading and agro-industrial center of Region 12, which encompasses the provinces of South Cotabato, Cotabato, Sultan Kudarat and Sarangani. The regional capital is Koronadal City, less than an hour away from General Santos City.
"General Santos is known as a highly competitive city and the region's entrepreneurs continually think in terms of a global market," said Ellorence Cruz of the Board of Investments in Gensan.
Bing Garcia, vice president and COO of Marbel Telephone System, Inc., said his company has begun laying down a fiber optic network, which he calls the "Ring of Fiber," connecting General Santos City and South Cotabato and Sarangani provinces.
Tacurong City and 11 municipalities in Sultan Kudarat province will also be connected to the fiber optic network, under the Sultan Kudarat Telephone System, Inc.
The "Ring" is being established in preparation for General Santos' planned WiMax system, a wireless digital communications system whose broad coverage can be extended to its outlying districts and rural areas, much like a cellphone network.
Anticipating the expansion of the local BPO sector, General Santos businessman Jan Ced has established the 2.8-hectare Mabuhay IT Park in the city center, a one-stop, fully secured facility capable of carrying voice, video and data services, with backup power supply.
At least seven medical transcription companies and two BPO accounting companies are already operating in General Santos and in Koronadal. In Tacurong City, 25 agents are employed by IQ Scribe, a private healthcare solutions/transcription company.
From his remote desktop in General Santos City, Delmer Paraluman handles all finances and reconciles receipts and books for Arrival Telecom, a phone service firm in Utah, in the US.
"BPO accounting is a lucrative business," said Paraluman. "Foreign companies have said they prefer their accounts to be handled by Filipinos since we have a reputation for trustworthiness."
"We have clients in Manila who order from us outdoor tarpaulins," said Ronald Velasquez, vice president of IDEAS Inc., a General Santos graphic design firm specializing in large formats. "Even with the added freight and shipping, we're still cheaper than firms in Cebu and Manila."
"We're now talking with a furniture company in Europe which is outsourcing their website design to us," Velasquez added.
The cost of BPO labor and operations in General Santos is approximately 25 to 50 percent lower than in Manila and major Philippine cities like Cebu, according to the General Santos City Chamber of Commerce and Industry.
The city alone produces 4,000 new college graduates a year, most of them from Mindanao State University and Notre Dame of Dadiangas University.
"Altogether, General Santos and neighboring areas turn out 15,000 new graduates annually, many of them living a short commute away from the city," said Raymond Diaz, executive director of ICT Solutions Association, a non-profit organization that promotes the development of IT services in Region 12.
Joji Ilagan-Bian, president of the Philippine Call Center Alliance, has run call center training courses in partnership with schools in Region 12 and other areas of Mindanao. She foresees that the expansion of the BPO sector will soon draw locators to other Mindanao cities as well.
Zamboanga, the country's sixth most populous city, has steadily been supplying labor to business process outsourcing firms [BPOs] in Cebu and Manila, said Bian, adding: "Why not then relocate your business closer to your manpower source?"
She points out that Iligan City produces 2,000 graduates yearly through Mindanao Statue University's Iligan Institute of Technology, which has been identified as a Center of Development of Excellence in ICT by the Department of Science and Technology.
Under the government's Philippine Cyber Corridor initiative, these cities have been identified as promising hubs for providers of a wide range of IT services, said Patricia Abejo, director for cyberservices of the government's Commission on ICT.
"I've also partnered with a Marawi-based school and set up a training center there to explore the business potential of the ARMM [Autonomous Region in Muslim Mindanao] as a call center site," said Bian.
07-03-2008, 07:21 AM
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