Megaworld speeds up construction of Iloilo office projects
MEGAWORLD Corp., the country’s largest office developer and lessor, is accelerating the construction of its office projects in Iloilo, underscoring the strong demand from outsourcing companies despite United States President Donald J. Trump’s move towards greater protectionism.
The property developer owned by billionaire Andrew L. Tan is spending P5 billion to build an additional 4-5 office buildings within the next three years that will bring the total office space inventory in the Iloilo Business Park to 100,000 square meters (sqm.) by 2020 -- in line with its original plan for the township, Megaworld Senior Vice-President Jericho P. Go told reporters flown to Iloilo on Friday.
The budget includes the cost for the development of two new office towers -- Two Techno Place and Festive Walk Office Tower -- that will rise in the central business district this year. Both projects, which will have new locators, were originally scheduled to be completed in 2018.
So far, the real estate firm has an office space inventory of 45,000 sqm. across five office towers -- all fully leased out.
“During the last three years, we have experienced a spike in the demand for office spaces in Iloilo Business Park. Thus, we expedited the construction of our first four towers and we have decided to build more to see the demand,” Mr. Go was quoted in the statement as saying.
The developer cannot sign a lease contract unless it can commit to a deadline set by the BPO companies, Mr. Go said.
By 2020, the township will cater to around 40,000 workers, mostly in the business process outsourcing sector.
At present, the township hosts 15,000 office workers from the seven BPO companies that are currently based in the 72-hectare township in Mandurriao. These include StarTek, Transcom, Reed Elsevier, WNS and IQor.
“We continue to see a bright prospect in Iloilo’s BPO industry. Several companies, most of them are first-timers in Iloilo, want to come in and expand here,” Mr. Go said.
Megaworld enjoyed robust demand despite concerns that the outsourcing industry, which account for majority of the take-up of office supply, will take a hit from President Trump’s “America first” policy.
“Back in 1997 when we started Eastwood City, one of the companies approached us, saying, ‘You know I really want to try the Philippines. You speak English. Let’s see if this would work. I’m already having a hard time in the US,’” Mr. Go recalled.
The Megaworld official noted that call center workers in the US are high school graduates, receive a small pay and leave their jobs in six months.
Megaworld has alloted P35 billion for the development of the Iloilo Business Park, P5 billion of which was allocated for 10 BPO office towers.
Last year, Megaworld mapped out the “Visayas BPO Triangle” that gives focus on expanding office developments in its three townships in Cebu, Bacolod and Iloilo. By 2020, these locations will be able to contribute around 200,000 square meters of office space inventory in the company’s rental portfolio.
Shares in Megaworld rose by a centavo or 0.27% to finish at P3.73 apiece on Friday.