Manila: Robinsons Land to overtake Ayala in office space
In the heart of Manila’s Ortigas Center, along a street of tightly stacked skyscrapers, an industrial lift crawls up the side of the city’s newest office tower. It is one of two new office buildings being developed by Robinsons Land, the property arm of Chinese-Filipino business tycoon John Gokongwei, which, upon completion in late 2013, will make the company the second largest provider of office space in the Philippines.
“The two new office buildings in Ortigas will add 41 per cent to our leasable office space,” Investor Relations Head Joan Cosico of Robinsons Land told Inside Investor on July 10.
When the office towers open in December 2013, Robinsons Land’s net leasable office space will jump from 193,000 square meters (sqm) to about 273,000 sqm, larger than Ayala’s net leasable space of about 200,000 sqm, but falling short of the over 400,000 sqm owned by Megaworld, the top office landlord in the Philippines.
The selection of Ortigas for the property developer’s next office high-rises seems a no-brainer. Compared to the average 700 pesos per sqm that offices fetch for rent in Makati, and 600 pesos per sqm in Fort Bonifacio, Ortigas offices rent for an average of 400 to 500 peso per sqm, making the location attractive for foreign firms looking to cut costs on their outsourcing ventures.
“Growth in demand is being fueled by the business process outsourcing (BPO) industry,” Ms Cosico noted, adding that 78 per cent of Robinsons Land’s office space is dedicated to the industry.
And the BPO industry, the largest private employer in the country, continues to demand more seats for a growing legion of workers, mostly employed as call center agents. Overall vacancies for leasable space in the Philippine BPO industry stood at 3 per cent in 2012, spurring a boom in the office property segment across the country, including other urban centers, such as Cebu and Davao.
According to data provided by Robinsons Land, the company’s eight completed office buildings today retain an occupancy rate of 100 per cent.
“The Philippine BPO industry grows an average of 20 per cent per year in terms of employment,” Information Technology and Business Process Association of the Philippines (IBPAP) Senior Executive Director Gigi Virata told Inside Investor in June.
Moreover, the domination by non-lucrative voice work is slowly shifting to more value-added complex services, such as finance, healthcare and IT, turning the Philippines into more than just a site for cheap customer service.
“While 67 per cent of the industry was dedicated to voice work about two years ago, today that figure is 65 per cent,” Virata said.
Fed by strong educational institutions, the BPO industry will continue to stoke demand for offices across second-tier cities as well. Dumaguete, Iloilo and Bacolod in the Visayas could be the next sites of some serious skyward development.
Creating the “micro-economy”
Gokongwei’s diversified activities managed through his massive conglomerate JG Summit – including aviation, food, shopping complexes and more – puts the family business in an envious position to absorb the 7.8 per cent growth of economic output the Philippines registered in the first quarter of 2013.
“We are very nimble,” said Ms Cosico. “We are building at 20,000 square meters in new cities because these markers are not ready for mega-mall development.”
Gokongwei’s deployment of mixed-use spaces creates a potent “micro-economy” formula, clustering residential, office and commercial properties, which can capture remittances being sent home by overseas Filipino workers (OFW), with inflows reaching $21.2 billion in 2012, or about 10 per cent of the country’s nominal GDP.
“OFW remittances are an integral part of the Philippines economy and are important at the provincial level. When OFWs send money to families they leave behind, the families spend the money on clothes and food and if we are the only mall in town then they will spend it on our premise,” Ms Cosico observed.
Indeed, Robinsons Land owns the first mall to come up in Palawan’s largest city of Puerto Princesa, as well as a shopping complex in Leyte’s Tacloban that attracts shoppers from the underdeveloped island of Samar that travel by ferry just to shop.
“We have no qualms about opening outside Manila,” Ms Cosico said. And, apparently, Filipinos will have no problem finding a new development by the conglomerate as it looks to play catch up with the country’s quickened pace.
[caption id="attachment_12236" align="alignleft" width="300"] Ortigas Center, Manila[/caption] In the heart of Manila’s Ortigas Center, along a street of tightly stacked skyscrapers, an industrial lift crawls up the side of the city’s newest office tower. It is one of two new office buildings being developed by Robinsons Land, the property arm of Chinese-Filipino business tycoon John Gokongwei, which, upon completion in late 2013, will make the company the second largest provider of office space in the Philippines. “The two new office buildings in Ortigas will add 41 per cent to our leasable office space,” Investor Relations Head Joan Cosico of Robinsons...
In the heart of Manila’s Ortigas Center, along a street of tightly stacked skyscrapers, an industrial lift crawls up the side of the city’s newest office tower. It is one of two new office buildings being developed by Robinsons Land, the property arm of Chinese-Filipino business tycoon John Gokongwei, which, upon completion in late 2013, will make the company the second largest provider of office space in the Philippines.
“The two new office buildings in Ortigas will add 41 per cent to our leasable office space,” Investor Relations Head Joan Cosico of Robinsons Land told Inside Investor on July 10.
When the office towers open in December 2013, Robinsons Land’s net leasable office space will jump from 193,000 square meters (sqm) to about 273,000 sqm, larger than Ayala’s net leasable space of about 200,000 sqm, but falling short of the over 400,000 sqm owned by Megaworld, the top office landlord in the Philippines.
The selection of Ortigas for the property developer’s next office high-rises seems a no-brainer. Compared to the average 700 pesos per sqm that offices fetch for rent in Makati, and 600 pesos per sqm in Fort Bonifacio, Ortigas offices rent for an average of 400 to 500 peso per sqm, making the location attractive for foreign firms looking to cut costs on their outsourcing ventures.
“Growth in demand is being fueled by the business process outsourcing (BPO) industry,” Ms Cosico noted, adding that 78 per cent of Robinsons Land’s office space is dedicated to the industry.
And the BPO industry, the largest private employer in the country, continues to demand more seats for a growing legion of workers, mostly employed as call center agents. Overall vacancies for leasable space in the Philippine BPO industry stood at 3 per cent in 2012, spurring a boom in the office property segment across the country, including other urban centers, such as Cebu and Davao.
According to data provided by Robinsons Land, the company’s eight completed office buildings today retain an occupancy rate of 100 per cent.
“The Philippine BPO industry grows an average of 20 per cent per year in terms of employment,” Information Technology and Business Process Association of the Philippines (IBPAP) Senior Executive Director Gigi Virata told Inside Investor in June.
Moreover, the domination by non-lucrative voice work is slowly shifting to more value-added complex services, such as finance, healthcare and IT, turning the Philippines into more than just a site for cheap customer service.
“While 67 per cent of the industry was dedicated to voice work about two years ago, today that figure is 65 per cent,” Virata said.
Fed by strong educational institutions, the BPO industry will continue to stoke demand for offices across second-tier cities as well. Dumaguete, Iloilo and Bacolod in the Visayas could be the next sites of some serious skyward development.
Creating the “micro-economy”
Gokongwei’s diversified activities managed through his massive conglomerate JG Summit – including aviation, food, shopping complexes and more – puts the family business in an envious position to absorb the 7.8 per cent growth of economic output the Philippines registered in the first quarter of 2013.
“We are very nimble,” said Ms Cosico. “We are building at 20,000 square meters in new cities because these markers are not ready for mega-mall development.”
Gokongwei’s deployment of mixed-use spaces creates a potent “micro-economy” formula, clustering residential, office and commercial properties, which can capture remittances being sent home by overseas Filipino workers (OFW), with inflows reaching $21.2 billion in 2012, or about 10 per cent of the country’s nominal GDP.
“OFW remittances are an integral part of the Philippines economy and are important at the provincial level. When OFWs send money to families they leave behind, the families spend the money on clothes and food and if we are the only mall in town then they will spend it on our premise,” Ms Cosico observed.
Indeed, Robinsons Land owns the first mall to come up in Palawan’s largest city of Puerto Princesa, as well as a shopping complex in Leyte’s Tacloban that attracts shoppers from the underdeveloped island of Samar that travel by ferry just to shop.
“We have no qualms about opening outside Manila,” Ms Cosico said. And, apparently, Filipinos will have no problem finding a new development by the conglomerate as it looks to play catch up with the country’s quickened pace.
