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Developers help emerging cities make their mark

  • 29 October 2016

  • Investments

  • Cebu, Philippines


When one of the world’s largest customer management services business outsourcing firms opened its 18th site in the Philippines (Philippine Economic Zone Authority-accredited MJ Corporate Plaza along Chino Roces Avenue Extension in Makati City), California-based Alorica brought the total number of its seats here to almost 29,000 thus, cementing the role of the Philippines as a key hub in Asia.

“Our company boasts a deep understanding of potential sites for Information Technology and Business Process Outsourcing (IT-BPO) clients through first-hand experience in both emerging and established cities here in the Philippines,” said Bong Borja, Alorica Asia president who informed that his firm teamed up with property developer Majalco Inc. as well as real estate brokerage firm Leechiu Property Consultants (LPC) Inc.

But while Makati City has consistently figured as a top office location for companies like Alorica, Borja said the company have already moved in to several emerging locations. “In August, Alorica has inaugurated EGS Ilocos Norte Main, a four-story building that is one of the first and biggest IT-BPO companies in Laoag City, 485km north of Manila.”

New emerging cities

Boutique developer ArthaLand is also starting to make its presence felt in the provinces.

He explained Laoag was not only cited as having the “Best in Infrastructure” but was also included on the list of so-called 10 “new emerging” cities recognized for their potential to become the “next wave” cities by the Department of Science and Technology-Information and Communications Technology Office, Information Technology and Business Process Association of the Philippines, and LPC.

The other cities on the list include Balanga (Bataan); Batangas; Iriga (Camarines Sur); Legazpi (Albay); Puerto Princesa (Palawan); Roxas (Capiz); Tarlac; Tuguegarao (Cagayan); and Zamboanga.

These cities, according to the selection group, follow those previously named as the next hubs—so-called Next Wave Cities—for the IT-business process management sector namely: Baguio (Benguet); Cagayan De Oro (Misamis Oriental); Dagupan (Pangasinan); Dasmarinas (Cavite); Dumaguete (Negros Oriental); Lipa (Batangas); Malolos (Bulacan); Naga (Camarines Sur); Sta. Rosa (Laguna); and (although not yet a city) the municipality of Taytay in Rizal.

These locations were identified based on the 2015 assessment guided by the Next Wave Cities scorecard, which includes the criteria: talent, infrastructure, cost, and business environment. All these are factored in to evaluate a city’s ability to enable and support the entry and growth of IT-BPM companies.

In an earlier interview, LPC CEO David Leechiu explained that the economic turmoil in Western countries and China has spelled greater need to move business operations here in the Philippines where there is a large pool of talent and where it is cost-efficient adding that the IT-BPM industry will see sustained growth in the coming years and that’s why industry players must now move to the provinces where there’s great potential.

Centers of Excellence

A few years ago, Davao City and Iloilo City attained the status of “Centers of Excellence” for IT-BPM operations thus,

Net Group has established a firm foothold in Bonifacio Global City. Joining the ranks of Metro Manila, Metro Cebu, Metro Clark, and Bacolod City as premier IT-BPM hosts and high-density locations.

No wonder property giant Megaworld is aggressively expanding its integrated urban township development across the Philippines spending P180 billion in the process.

Explained Jericho Go, SVP of Megaworld: “There is a huge potential of growth in the provinces. As the economy soars, the development also spreads outside the National Capital Region, particularly the regional centers. That’s why we are there, we want to equalize opportunities nationwide.”

Currently, there are around 12 townships outside Metro Manila namely, Iloilo Business Park in Mandurriao, Iloilo City; The Mactan Newtown in Lapu-Lapu City; Davao Park District in Lanang, Davao City; Northill Gateway in Talisay City, Negros Oriental; The Upper East in Bacolod City; The Capital in San Fernando, Pampanga; Twin Lakes in Alfonso, Batangas (near Tagaytay City); Southwoods City in the boundaries of Cavite and Laguna; Suntrust Ecotown in Tanza, Cavite; Sta. Barbara Heights in Sta. Barbara, Iloilo; Boracay Newcoast in Boracay Island; and Maple Grove in General Trias, Cavite.

Within these townships, Megaworld will build several office towers: located above the upcoming Southwoods Mall in Southwoods City are BPO Towers 1 and 2 (around 43,561 sq m of leasing space); within Iloilo Business Park township are Richmonde Tower (5,800 sq m), One Global Center (9,400 sq m), Two Global Center (9,100 sq m) and One Techno Place (8,700 sq m), Three Techno Place (around 8,700 sq m) as well as the upcoming Two Techno Place (10,000 sq m) and Festive Walk Office Tower (12,000 sq m); within The Mactan Newtown will be two more office towers namely Tower One Plaza Magellan and Pacific World Tower (combined 34,000 sq m); The Upper East township in Bacolod will have initial inventory of 30,000 sq m; within Davao Park District, the three office towers, Davao Finance Center, One Republic Plaza and Casa de Emperador will have an office inventory of around 52,000 sq m.

Go said the developments of these townships would soon change the mindset of those in the provinces who thought opportunities only exist in Metro Manila. “By creating townships that eventually become new centers of growth in the provinces, we encourage ‘reverse migration’ or the return of a person to his or her province to work, and still get the same benefits and opportunities as he or she would have in the capital city.”

Megaworld is aggressively expanding its integrated urban township development across the Philippines

Notable player

Another notable player in the Visayas and Mindanao region is ArthaLand that will spend P8 billion for the development of an office project in Cebu.

The project, to be named Cebu Exchange, is a 38-storey office building that will be built on an 8,440-square-meter lot along Salinas Drive within Cebu IT Park in Lahug Village, Cebu City. It will have a total of 316 office units offering 83,100 sq m of office space.

The project will be developed through a 60-40 joint-venture with Hong Kong-based ARCH Capital Management, with ArthaLand holding the controlling 60 percent stake. Completion of the first phase is slated in 2020 and the second phase in 2022.

As explained by ArthaLand president and CEO Angela De Villa-Lacson, the company aims to make Cebu Exchange the first recipient of a dual green building certification under the US Green Building Council’s LEED program as well as the Philippine Green Building Council’s BERDE certification programs in the VisMin region.

“To ensure resource efficiency for the building’s locators, Cebu Exchange will feature green elements such as efficient building envelope, water-efficient plumbing system, low-energy consuming air-conditioning system, efficient lighting system, use of low-emitting materials, and allocation for low-emitting and fuel efficient vehicle parking.”

Megaworld believes there’s a huge growth potential in the provinces as the economy soars.

Opportunities outside

For Net Group, a company that established a firm foothold in Bonifacio Global City—with highly successful projects like Net Lima, Net Plaza, Net Quad, Net Cube, Net Square and Net One Center—to look some place else would be almost unimaginable.

Net Group EVP Ramon Rufino explained that locations like BGC was built from the ground up to provide a healthier work environment for employees and increasing savings and cost-efficiency.

“The whole city was designed to offer the highest level of comfort that fosters creativity as well as a better quality of day-to-day life. No wonder our projects here are very attractive to multinational companies, which are increasingly looking for spaces that will reflect their own sustainability commitments.”

Its latest undertaking, Net Park is the second tower to rise in the Net Metropolis, 5th Avenue, a development designed by Chad Oppenheim, a Miami-based architect who specializes in green architecture.

As the seventh in the company’s series of intelligent office buildings owned by the Net Group, Net Park offers a unique workplace lifestyle and aesthetics.

However, Rufino said the company is also exploring opportunities outside of BGC especially now that vacancies of office space in this part of Taguig City remained low due to sustained demand from outsourcing firms which tempers the significant amount of additional office space being completed in the area. Even the price of land is becoming a challenge—land values at BGC was reported to increase by 3.6 percent in the second half of the year to P460,865 per square meter.