Reading Time: minutes
In this second installment of KMC Expert Talks' series on commercial office spaces, Anna Marco discusses the current office rental rates for each CBD as well as her recommendations on where businesses should locate in the Philippines. This will help business owners and entrepreneurs decide where to set up shop in the country and to narrow down the location choices for their company.
Hello again! Thank you for joining us in the second part of our discussion about office spaces in the Philippines. I'm Anna, and today I will be sharing with you my recommendations on where to find commercial space for your business.
How much is the ongoing office space rates in the Philippines?
Office space rental rates in the Philippines vary depending on the location. In this discussion, we will be limiting it to the top 4 business districts: Makati, Bonifacio Global City, Ortigas, and Quezon City. In Makati, Grade A space can start at Php700 per square meter to a high of Php1,200 per square meter for prime office space. In BGC, you can get Grade A space for as low as Php 525 per square meter to a high of Php 875 per square meter for prime office space. Ortigas, on the other hand, offers Grade B office space for Php 450 per square meter and Grade A space for Php 650 per sqm. Quezon City's rates are not really far from Ortigas' rates, which are at Php 450 to Php 650 per square meter.
Which location and type of office space would you recommend for start-ups?
Each Business District actually has its own set of advantages and disadvantages, and may be more suitable for certain business sizes and cultures. For startups, I would recommend Makati and Ortigas. Startups and new businesses should opt for "tried and tested" areas, as they are often the top-of-mind locations given that they house the headquarters of several major organizations and companies. Makati is considered "the" business district, because everything is there. It offers accessibility to transportation, a wide variety of retail outlets, restaurant outlet, entertainment places, and residential areas -- elements that make it more attractive for fresh graduates and professionals, giving you access to a larger workforce willing to work in the area. Ortigas offers pretty much the same elements, only on a smaller scale.
Risks in Makati/Ortigas
However, one risk to prepare for when locating in these areas is higher rental rates as well as the cost of basic necessities: food, transportation, gas, etc. compared to other districts. Together with Ortigas, Makati is also one of the older districts which means that it has older buildings that require more care and maintenance leading to higher operational expenses. Another risk is Makati and Ortigas' notoriously high occupancy rates, making it difficult to find a sizable space.
Which location and type of office space would you recommend for other business sizes?
I would also recommend Bonifacio Global City for businesses of all sizes because it offers the best value for money. BGC is actually an emerging favorite among startups and SMEs as it has lower rental rates compared to Makati. The city also has newer buildings, so it addresses the risks of having high operational expenses and spending more for building maintenance. BGC also has several green buildings like Net Lima and Sun Life that provide greater savings on utility costs. Compared to other cities, BGC has a better quality work environment -- it is not as crowded as other CBDs. BGC has also become the migration choice for large-scale businesses who wish to replace their old office, expand, and provide a better work environment for their employees.
Risks in BGC
One concern within BGC though is accessibility although this is currently being addressed. Unlike Makati and Ortigas, BGC operates its own bus system and jeepneys are restricted to ply only certain routes. Some companies address this by providing allowances to make it more more convenient for employees to get around through taxis for example to encourage them to work near the area. One of our clients named Bright encourage their employees to move and work near BGC by providing a housing allowances they can avail of.
How about Quezon City CBD?
Quezon City would be a good location in terms of accessibility to the labor force. Around 80% of the labor force working in Makati, BGC, etc. live in QC, so choosing that location would be beneficial for a company in the long run. The trend for many companies and BPOs, is that they tend to start in the more popular CBDs like Makati, which has access to young professionals and fresh graduates looking to work in the "hip" or "cool" part of Metro Manila, and then move to QC once the company has grown and their team has matured. I believe this is one factor why it is quite difficult to find office space in QC.
Last minute tips
The best advice I can give to budding business owners and investors looking to set up shop and do business in the Philippines is to find a reliable partner that you can trust. Of course, when doing business, there are always risks involved especially if you are starting in a foreign country or a place that you're not really familiar with. It is normal to be scared, which is why finding a proper partner who will hold your hand through the whole process and guide you from the beginning to the end is definitely something you need to do before you decide to move in the country. KMC is a company that can precisely do that for you - set up everything you need and make things easier for you -- from leasing a plug-and-play office space, registering a business, recruiting employees, down to finding an apartment or a nice home in the Philippines or setting up an office space of your own.
So that will be all for episode today. Thanks again for watching and stay tuned for our next episode on Residential Spaces. Bye!