Real estate services provider Colliers International Philippines said Cebu and other areas with adequate government-accredited information technology ecozones are well-positioned to attract more outsourcing companies.
In a recent market advisory, Colliers said that aside from Cebu, other areas with adequate space registered with the Philippine Economic Zone Authority (PEZA) are Iloilo, Davao, Bacolod and Pampanga.
“We believe that cities and provinces with adequate PEZA space such as Cebu, Iloilo, Davao, Bacolod and Pampanga should attract more outsourcing occupiers,” the Colliers report said.
Outsourcing companies have put off expansion because of the coronavirus disease 2019 (COVID-19) pandemic.
In the first quarter of 2020, Colliers said it recorded about 90,000 square meters (968,400 square feet) of office deals from the outsourcing sector, slightly lower than the 99,000 sq.m. (1.07 million sq.ft.) in the same period in 2019.
Colliers noted that even the business process outsourcing (BPO) sector was disrupted by the lockdowns imposed by the government to slow transmission of the SARS-CoV-2 virus which causes COVID-19.
“Some outfits were reported to be downsizing (rightsizing) their businesses, while others were forced to rethink their once bullish expansion plans,” Colliers said.
“The industry expects the pandemic to have an impact on this year's headcount and revenues,” the company added.
The BPO sector, which accounted for about a third of the office demand in 2019, earned revenues of $26.3 billion in 2019. This was higher by 7.1% from the previous year.
With the imposition of new health and safety standards that require physical distancing and a possible increase in demand for outsourcing services from developed markets, Colliers said demand for office space might increase and offset the market slump as soon as the pandemic shows signs of slowing down. (Ventures Cebu)
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