New trends in the offshoring industry have given rise to a change in the landscape of the office property sector as companies cope with the effects of the new coronavirus disease 2019 (COVID-19) pandemic, according to consultancy firms KMC Savills Inc. and JLL Asia-Pacific.
Michael McCullough, managing director of KMC Savills, said outsourcing companies especially multinationals and banks will continue to tap the Philippines due to its attractiveness as a source of labor but said these are beginning to adopt the hub-and-spoke model for efficiency.
McCullough in a webinar said the strategy now is to get a small hub in an area, say a residential one, and set up an office to make it more convenient for workers than make them take the long commute to their offices in the central business districts (CBDs).
He said business process outsourcing in general was robust during the lockdown with quite a number of them working from home.
“They will survive and wil add more people,” McCullough said.
But he said the sector does not see the immediate need for office space to support their operations.
McCullough sees demand to return in three to six months, with Ortigas projected to post a spike of 25 percent in demand due to its accessibility by train.
He said there are opportunities for upgrade to energy-efficient buildings as employers take into consideration the health of their employees.
JLL said in a report said company executives are re-examining strategies and may consider recalibrating the amount of space dedicated to traditional office space upon lease expiry, or even before.
The report said in some cases the pandemic may lead to an expansion of office space, as companies try to increase physical distancing among their employees. Current office configurations may be modified, increasing the need for additional space.
“In doing so, occupiers may consider tapping into flexible space from third-party operators, alongside continued remote working for some employees,” the report added.
“The current situation poses disruption and challenges for the office sector. The way people view and use corporate real estate will change. However, we can expect the office to remain at the heart of employers’ occupational strategies in Asia Pacific over the medium-to-long-term,” said Anthony Couse, chief executive officer of JLL Asia Pacific.
