Property advisory firm CBRE Philippines has seen the local real estate sector to benefit from the devaluation of Chinese yuan and Philippine peso.
CBRE Philippines Chair, Founder, and Chief Executive Rick Santos, in a press briefing on Thursday, said the weakening of Chinese and Philippine currencies is a big advantage for business process outsourcing (BPO) firms to locate in the Philippines.
Santos mentioned that this means robust demand in office spaces as more BPO firms will invest and expand in the country.
We see outsourcing demand from Europe, the U.S., and Australia. The weakening peso translates to higher value of their revenue, he said.
Recently, Chinese authorities moved for devaluation of the yuan to make its exports cheaper that will further push growth to its national economy.
With the move of the world’s second largest economy to devaluate its currency, Philippines peso, along with other Asian currencies also weakened.
On Wednesday, peso finished trade at Php46.35 against a dollar.
The Philippines continues to be an attractive outsourcing destination as a result of the robust demand for office space, CBRE Philippines Director Morgan McGilvary on the other hand noted.
The Philippines continues to enjoy steady influx of BPO companies setting up headquarters in the country, he added.
In particular, total office occupancy rate in five central business districts (CBDs) which include Makati, Fort Bonifacio, Alabang, Quezon City, and Ortigas reached 97.1 percent in second quarter of 2015.
McGilvary said most of these office take-ups were from the BPO sector.
Aside from Metro Manila, key BPO locations in the country such as Clark in Central Luzon and Cebu in Visayas have high occupancy rates as of Q2 2015.
Office space occupancy rate in Clark reached 98.37 percent while Cebu was at 91.62 percent.
The country’s lease rate for office spaces, which is still the lowest in Asia, also attracts demand in office spaces.
For Metro Manila, lease rates only grew by 0.81 percent in Q2 2015 from Q1 2015. Lease rates in Metro Manila CBDs ranges from above Php400 to around Php1,500 per square meter.
Rental growth rate in Cebu, on the other hand, decreased by 0.05 percent due to low lease rate of the newly opened Skyrise Beta of Skyrise Realty and Development company. Lease rates in Cebu ranges from a little below Php400 to nearly Php800 per square meter.
CBRE noted that the lowest office lease rate in the country is in Clark with lowest rate at Php456.74 per square meter.
Aside from Metro Manila, Cebu, and Clark, property developments catering to office space demands are now rising in next wave cities including Baguio City, Iloilo City, and Davao. (PNA)