AS micro, small and medium enterprises (MSMEs) and startups continue to rise, so has the demand for flexible workspaces.
In its latest study, research firm Colliers International Philippines encouraged local developers to consider offering co-working spaces in their buildings to take advantage of the sector’s growth.
It likewise urged flexible workspace operators to consider buying office spaces and converting them into co-working spaces; or partner with developers to mitigate the impact of increasing rental rates.
Many startups and companies now prefer co-working spaces to conventional office spaces due to lower rent, savings on operational costs and a more flexible work environment.
Traffic congestion in most key cities like Cebu is also another critical factor in the decision-making, prompting companies to embrace this growing work-style trend.
Co-working is a style of work that involves a shared workplace, often an office, and independent activity. Unlike a typical office, those co-working are usually not employed by the same organization.
“We encourage developers to construct office spaces that could accommodate non-outsourcing and traditional businesses that require smaller space,” said Colliers.
“Developers should be more flexible and keep in mind that the expansion of the Cebu economy drives the growth of traditional firms, such as those involved in engineering and logistics that occupy smaller office space,” the research firm added.
It noted that this is particularly important for office towers that will be built around the uptown/downtown areas, which remain the preferred location of traditional and non-business process management businesses.
In the first half of 2018, Colliers said a significant area was occupied by international flexible workspace operators, such as Figari and Common Ground.
Colliers sees these operators expanding outside of Metro Manila in the near future, with Cebu as their next target destination, given that it is the next largest metropolitan area in the country.
But for Maricris Sarino-Joson, Colliers International Philippines associate director for office services, the challenge for both operators and developers is adapting to the demands of the market to either remain competitive or participate in this growing sector.
Joson said they expect the current flexible workspace stock in Metro Manila to grow by at least 10 percent annually in the next three years, on the back of faster growth of the MSME sector.
“Naturally, we see this demand spilling over to Cebu,” she stressed.
Several bills still pending are likewise seen to support the growth of MSMEs, which could fuel the demand for flexible workspaces.
Joson said once enacted into law, this should help small businesses grow in major urban hubs across the country, including Cebu.
“These should support small Filipino firms’ operations and encourage them to occupy flexible workspace,” Joson noted.
Meanwhile, Colliers encourages companies in need of large floor areas to consider opening in Cebu, Laguna and Pampanga, to bridge the supply gap. It noted that these spaces are quickly being taken up by offshore gaming tenants.