Some multinational information technology and business process management (IT-BPM) companies headquartered in the Grade A office buildings of Filinvest REIT Corp. (FILREIT) expect steady demand for high-quality office space despite the COVID-19 global pandemic.
Showing resilience amidst the lingering impact of COVID-19, the Philippines’ office demand grew by 22.5% to 109,000 square meters in the first quarter of 2021 versus the fourth quarter of 2020, according to Leechiu Property Consultants’ first-quarter 2021 Market Update.
The report found the IT-BPM sector as the single largest driver of office demand, especially as Philippine offshore gaming operations (POGO) activity has flatlined and investor sentiment is expected to pick up with the vaccine rollout.
“There are 266,000 sqm of office leasing requirements that want to be transacted in 2021,” the Leechiu report stated.
“With the growth of the industry, I don’t expect the need (for office space) waning. While some companies will offer a percentage of work-from-home arrangements, others may offer a hybrid model. I expect the need for business continuity planning to keep the space,” said Erick Carcamo, vice president of Majorel’s Southeast Asia Operations.
Majorel, an international service company specializing in customer experience and BPO services for global brands, which currently leases in two Grade A buildings in Northgate Cyberzone in Filinvest City, Alabang, to support more than 2,000 of its employees in the country.
Benefiting from the pandemic-resilient IT-BPM sector, Northgate Cyberzone is home to the first campus-style IT park in the Philippines and one of the first Philippine Economic Zone Authority (PEZA) accredited IT parks in the country. The 18.7-hectare property has been attracting high-quality tenants, in addition to its Grade A (highest quality) office buildings, range of support facilities, rental rates that are competitive with other central business districts (CBDs), and the solid reputation of its developer, Filinvest Land Inc., as a trusted developer with over 50 years of experience.
SLK Global Philippines, a global provider of digital platforms and business process solutions across industries, has been operating in Northgate Cyberzone for five years now. Japjit Sobti, company president, said “world-class infrastructure, proximity to local transport, redundant talent pool, low to no flooding, competitive rentals, and the safety of our employees are the key factors” that made the BPO choose the location after a long due diligence.
“Operating in a Grade A building checks all the boxes for SLK Phils., as we are able to provide 24/7 operations efficiently, build comfortable workspaces for employees, and create value for our customers,” Japjit added.
Majorel’s Mr. Carcamo also emphasized the importance of providing high-quality office space for employee wellness. “Grade A buildings possess high quality infrastructure, basement parking, great access, and are professionally managed. All these things provide a great experience for our employee base, which at the end of the day is our main priority,” he said.
In addition, “Northgate remains an ideal location due to its nearby transportation hubs, allowing us to pull from various locations such as Sucat and towns in Las Piñas, Muntinlupa, and parts of Cavite which would otherwise take employees over two hours to get to Makati to work. The huge labor pool of fresh graduates from many universities and colleges makes it rich in recruitment capabilities.”
The same accessibility in location influenced the decision of Dearborn Motors Company, Inc., which handles Ford dealerships locally, to move to Filinvest City a few years ago. Ford Alabang is the biggest Ford dealership in the country and one of the biggest across the ASEAN region.
“The growth in the area was really fast. We did see potential, especially (as) the Skyway is actually in front of the dealership. One of the largest communities of vehicle owners is just right behind us, which is Ayala-Alabang. Because of the location we were in and the easy access, we were able to keep business going (during the pandemic),” said Jonnel Borromeo, chief corporate planning officer at the dealership.
In addition to offering a strategic location, FILREIT also boasts of having a sustainability-themed portfolio. Northgate Cyberzone is located in Filinvest City, the country’s first CBD and the largest in Southeast Asia to receive a LEED® v4 Gold for Neighborhood Development Plan certification. Its buildings are cooled by the country’s largest district cooling system that reduces carbon emissions and energy consumption, the result of Filinvest’s partnership with Engie, a world leader in developing sustainable technology solutions.
Sixteen office buildings in Northgate Cyberzone form part of the 17-building portfolio of FILREIT (formerly Cyberzone Properties, Inc.) FLI’s real estate investment trust (REIT) arm. FILREIT plans to raise up to ₱12.58 billion from an initial public offering of 1,634,187,850 common shares at an offer price of ₱7.00 per share. The offer period is from July 23 to August 3, 2021, 12 noon, Manila time, with a target listing on August 12, 2021. Apart from the 16 office buildings in Northgate Cyberzone, FILREIT’s portfolio also includes one office tower with a retail component in Cebu Cyberzone, also a PEZA-registered economic zone located in the gateway to Cebu IT Park, Lahug, Cebu City. These properties have a total gross leasable area (GLA) of 301,362 square meters.
“We are looking forward to listing the FILRT company because we believe that this will unlock the value of our office leasing business. Filinvest has a growing portfolio of recurring income projects and significant prime office properties in Alabang, Cebu, and Clark to continue to grow this business. A REIT listing will enable acceleration of the growth of this business line,” said FLI president and CEO Josephine Gotianun-Yap.
BPI Capital Corporation (BPI Capital) acts as a Joint Global Coordinator and Bookrunner for the initial public offering (IPO), together with UBS AG Singapore Branch, who acts as International Bookrunner for the international tranche of the institutional offer of the IPO. China Bank Capital Corporation (China Bank Capital) acts as Local Underwriter, while First Metro Investment Corporation (First Metro) and SB Capital Investment Corporation (SB Capital) both act as Local Co-Lead Underwriters. BPI Capital, China Bank Capital, First Metro and SB Capital will underwrite the domestic tranche, and together with the International Bookrunner, will underwrite the respective tranches of the IPO.