PROPERTY research firm Colliers International Philippines sees a rise in flexible workspace leases as businesses streamline operations to cope with the impact of tax reform.
Colliers Philippines defines flexible workspace as any workplace that allows short-term leases, with a minimum size of one seat, are fully-furnished and ready to use.
In the Philippine market, there are three major classifications of flexible workspaces: serviced offices, hosted service firms, and co-working spaces. These three types provide the basic needs of air conditioning, a workstation, and fast internet connections.
“With the implementation of Tax Reform for Acceleration and Inclusion (Train) Law, we see a rise in small office cut leases as small businesses open up shops,” said Joey Roi Bondoc, research manager at Colliers Philippines, adding that the tax reform simplifies tax filing and payment processes.
Besides the Train Law, they also see the implementation of the Go Negosyo Act and the National Broadband Deal to drive the growth of micro, small and medium enterprises (MSMEs).
According to Colliers, the growth of flexible workspace demand in the country has been attributed to the thirst for flexibility from multinational corporations as well as increasing demand from small businesses like startups, freelancers, and law firms, among others.
“We encourage developers to construct office space that could accommodate non-outsourcing and traditional businesses that require smaller cuts. 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 space,” said the research firm.
Colliers also see spaces in retail malls as viable flexible workspaces. It said that given the robust growth of the MSME sector and worsening traffic in Cebu, malls are an attractive location.
Flexible workspaces are steadily growing in Manila, but Bondoc said they also see potential in Cebu, Bacolod, Iloilo, and Davao in terms of flexible workspace demand.
“We see growth in this segment. In fact, investors from Singapore and Malaysia are now eyeing to expand in Manila. Cebu, for sure, will benefit from this trend, knowing that Cebu is a strong hub for business process management and information technology,” he said.