Property consultant Colliers expects the information technology and business process management (IT-BPM) industry to remain a driver of economic growth going into 2025, and in the process contributing significantly to the growth in the demand for office spaces for the year.
Colliers in a study released last week said the IT-BPM sector’s growth mirrors that of the office space demand in the country.
The study said the industry’s trajectory this year will be characterized by “strategic shifts, and continued expansion” as major players push the envelope of innovation and the overall success of the industry.
“While some companies have adjusted their office space requirements in response to evolving work trends, the IT-BPM sector remains a significant contributor to the Philippine economy,” Colliers said.
Collier said prospects for the IT-BPM sector look “bright” given the industry’s resilience and adaptability that enable it to expand both in Metro Manila and key provincial hubs.
“The availability of skilled labor, BPO-ready office spaces, strong infrastructure, and government support ensure that the Philippines will remain a global leader in outsourcing for years to come,” it said.
Colliers noted that the IT-BPM industry posted a 7 percent growth in revenues last year to $38 billion from $35.5 billion the prior year.
“This growth is mirrored in the office space market, with a combined total of 424,531.12 square meters (sq.m.) of office space transacted nationwide, accounting for 44 percent of the total office transactions in 2024 (973,269.91 sq.m.),” it said.
Office space uptake by third-party outsourcing (3PO) companies and shared services sectors in Metro Manila alone hit 246,672.36 sq.m. while provincial locations posted an additional 177,858.76 sq.m. of new spaces occupied.
“This growth underscores a strategic shift among major IT-BPM players, demonstrating their commitment to expanding operations and driving forward the outsourcing sector’s progress,” Colliers said.
Notable expansions
Among the sector’s players, Colliers said, Telus posted one of the largest expansion last year, securing an impressive 37,300 sq.m. of office space nationwide.
“This aggressive expansion highlights the company’s ambitious growth strategy and solidifies its presence in the competitive IT-BPM sector. With strong fourth-quarter results in 2024, driven by solid customer growth in its mobility and fixed services divisions, Telus is well-positioned to continue its momentum,” it said.
Notably, the company expanded its footprint in multiple locations, including Quezon City (27,700 sq.m.) and Iloilo (4,600 q.m.).
“Diverse industry players expanding operations
The London Stock Exchange Group (LSEG) also made notable moves, with its shared services division securing 13,700 sq.m. of office space in Bonifacio Global City. As a leading global financial exchange, LSEG continues to support ambitious companies and raise capital, solidifying its role in the global market,” Colliers said.
Other major players including Accenture and Concentrix also made significant strides in expanding their office footprints.
“Accenture expanded into 11,100 sq.m. of new office space in Bonifacio Global City and Alabang, while Concentrix secured 19,000 sq.m. across key locations like Quezon City and Ortigas Center. Both companies attribute their growth to strong financial results and the rising demand for AI-driven solutions,” Colliers said.
“Concentrix, in particular, has seen an uptick in market traction with its new AI productivity tools such as iXHello, Smart Assist, and Automated Quality Assurance,” it added.
The Philippine office space market is also attracting new locator from existing and new business segments, notably healthcare and IT sectors, Colliers noted.
For one, Johnson & Johnson moved into an 8,400-sq.m. office space in Bonifacio Global City (BGC).
Infosys expanded by 12,800 sq.m. also in BGC, continuing to leverage the area’s accessibility for digital transformation projects.
Optum, a leader in digital health services, secured 17,000 square meters of office space across Cebu and Davao, furthering its mission to enhance healthcare services through advanced technology and operational efficiency, Colliers said.
Other companies that chose the Philippines to be hub for their operations are X (Twitter) Corp., Gear Inc.
X (Twitter) sealed a 2,400-sq.m. office space contract, while Gear Inc. secured 1,900 s.m.
Other newcomers include BPO Labrador Consulting, Capgemini Philippines Corp., and Playmate Leisure Solutions, each contributing to the expanding industry, Colliers said.
Hybrid work
Colliers said that the passage into law of the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) Act which allows companies registered with the Philippine Economic Zone Authority (PEZA) to implement a hybrid work model with up to 50 percent remote work while retaining tax incentives has led other BPO companies to vacate existing spaces, either through non-renewals or early lease terminations.
“Many companies are simply adapting to hybrid work models, reducing their office space needs. As hybrid work gains popularity, office space utilization across the sector has evolved,” Colliers said.
The property consultant said that a total of 61,131.61 sq.m. were vacated by 3POs and shared services companies last year due to adjustment in space requirements.
It said VXI Global and Cognizant were among the most notable companies to vacate office space in 2024, with VXI releasing 10,800 sq.m. and Cognizant 9,000 sq.m.
Other companies, including DXC, Stream Global Services, and Synchrony Financial, also recorded vacated spaces, Colliers added.
