REAL ESTATE brokerage and consultancy firm KMC Savills said that infrastructure development and stable power supply are the top factors that could boost office space demand in regional cities across the country.
“The key factor that will help boost the demand of the regional offices is, apart from labor, it is really the infrastructure development, like airports and roads,” KMC Savills Chief Operating Officer Cha Carbonell said in a virtual briefing last week.
“In terms of the power situation, I know some provinces and cities are still somewhat struggling with the availability of power or the consistency of the power that’s being provided. That is really one of the concerns when we do scorecards with our clients,” she added.
KMC Savills Executive Director John Corpus also said that there should also be improved connectivity in regional areas to improve office demand.
“We have to improve our connectivity, not just in the physical office, but also from our homes because it is now a requirement, especially those that are working from home or doing hybrid work,” Mr. Corpus said.
Meanwhile, Ms. Carbonell said that local governments in regional cities should sustain efforts to encourage more investors to develop their areas.
“It is also making sure that our local governments will continuously encourage investors to come in and develop the area,” Ms. Carbonell said.
“It is also building sustainable projects, not just offices, but also malls and parks, making sure that the developments are also future-proof,” Ms. Carbonell said.
KMC Savills recently said that it sees the sustained growth of property markets in regional cities such as Metro Cebu, Metro Clark, Davao, Iloilo, and Bacolod amid the continuous expansion of the information technology and business process management (IT-BPM) sector in the countryside.
Aside from the IT-BPM sector, the real estate brokerage firm said that it also sees more regional expansion from providers in the flexible office, e-commerce, and logistics sectors.
“One of the things that we are so excited about is that the provincial areas did better than Metro Manila. There’s been more activity happening outside Metro Manila. It’s all been to the provinces. Companies want to go where the best employees are,” KMC Savills Managing Director Michael McCullough said.
“A lot of people during the pandemic returned to the provinces. That’s where the companies want to move back to. There’s been available decent quality (office stock), IT-grade, and companies have taken advantage of the lower rates to set up offices where their employees are located. This reduces attrition and lowers costs. We expect this to continue,” he added. — Revin Mikhael D. Ochave