Manila, March 7, 2018 - Flexible workspace is no longer a disruptor, nor a complementary sub-sector to the office market. It has become a fundamental part of commercial real estate and a sector in its own right. In a recently-released report, The Flexible Workspace Outlook 2018, Colliers International noted the continued growth in flexible workspace demand across key submarkets in Asia Pacific including the Philippines. The growth of flexible workspace demand in the country has been attributed to the thirst for flexibility from multinational corporations (MNCs) as well as increasing demand from small businesses.
Over 200,000 sq m (2.15 million sq ft) is occupied by flexible office space operators in Metro Manila alone, with many still looking to expand this year. The profile of tenants using these spaces varies from start-ups, to law firms, MNCs and freelancers.
Colliers International Philippines saw expansions from a hosted services firm as it closed deals in the Robinsons Cyber Sigma and Cyberscape Gamma buildings, while more traditional operators Compass and Logical Source One expanded to new sites. Acceler8 opened new sites and LaunchPad expanded its existing space, while Ignition Venture Studio and THE OFFICE Cowork + Life opened its initial sites in Grade A buildings in Fort Bonifacio.
“As the office leasing market shifted from a BPO-driven sector to one led by traditional companies including MNCs and offshore gambling firms, flexible workspace followed,” said Maricris Sarino-Joson, Colliers International Philippines’ Associate Director for Office Services.
ImpactHub will launch a new flexible workspace concept while Sales Rain, a hosted services provider, is also set to launch its own flexible workspace site in Mandaluyong. Developers formed partnerships with established operators in order to capitalise on this trend, with the standout deal being Ayala Land’s partnership with Acceler8 in launching Clock-In at the Makati Stock Exchange Tower. Vista Land also teamed up with the University of the Philippines to establish @LabInnovation Hub in Alabang while Launchpad in Alabang also partnered with Acceler8 in Makati to provide end-users with improved access across multiple business districts.
“We expect international flexible workspace operators to penetrate the Philippine market in 2018, though given the nuances of the domestic market this will likely be in partnership with local developers or investors, and in some cases via acquisitions,” Sarino-Joson noted.
Colliers International Philippines sees the implementation of the Go Negosyo Act and the National Broadband Deal driving the growth of micro, small, and medium enterprises (MSMEs) and this should propel their businesses. The enactment of the first package of the Comprehensive Tax Reform program also bodes well for small enterprises as the law simplifies tax filing and payment processes. Eventually, the expansion of small businesses’ activities should have a positive impact on flexible workspace demand across the country. Aside from Metro Manila, Colliers also sees potential in Cebu, Bacolod, Iloilo, and Davao in terms of flexible workspace demand.
“Given the range of end-users in flexible workspace we expect a wide geographical spread, and operators will likely set up several smaller sites rather than fewer large scale sites due to challenges in transport infrastructure. For this reason, we may see space within retail malls repositioned as flexible workspace,” Sarino-Joson stressed.
Sarino added that differentiation is crucial in surviving the surge in new co-working sites. The latest Colliers Flexible Workspace report identified a number of flexible workspaces across Asia that integrate swimming pools, gyms, and food and beverage (F&B) outlets.
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