Philippines Outsourcing Growth Gives Rise to Build-to-Suit Real Estate Deals

MANILA, PHILIPPINES - With the continued growth of outsourcing in the Philippines, outsourcers with large space requirements are increasingly developing build-to-suit buildings outside of Metro Manila, and in the provinces.

The Philippines call center / BPO industry has experienced phenomenal increase in the past several years. The call center industry alone grew from 45,000 seats in 2004 to 125,000 in 2005.

In 2006, the entire BPO industry is expected to add a minimum of 100,000 new jobs.

Given this and the low vacancy rates and lack of office spaces in major central business districts (like Makati, Pasig area), locators need to consider more creative options to fulfill their real estate requirements.

These alternative real estate options include:

• leasing non-traditional space - such in shopping malls and other retail spaces
• exploring new areas or alternative business districts and fringe areas of Metro Manila and in the provinces
• constructing build-to-suit buildings for outsourced operations.

Build-to-suit real estate deals are complex undertakings, particularly for multinational companies (MNCs), according to CB Richard (CBRE) Ellis, a leading provider of real estate services in the Philippines.

These deals require a project managers with specialized project management skilss and experience, said Trent Frankum, Director of Global Corporate Services and Investment Advisory of CBRE.

CBRE is currently leading the way in providing project management services to MNCs who choose to construct build-to-suit buildings.

The company is at the forefront of the latest call center/BPO real estate trends. It provides tenant representation, technical and property management services to call center and business process outsourcing locators in Metro Manila and in the provinces.

The company recently concluded a large leasing/build-to-suit transaction deal for Lexmark Research and Development Corporation in Cebu City. The facility is expected to be completed by 2007.

3/23/06

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