Investing in Metro Manila is no longer the big secret it once was, as shown by the fast-paced growth of its real estate market, specifically the office market, which is expected to increase its stock by 1.7-million sq m in the next couple of years. There are over 20 office developments set to be launch in 2016 alone, majority of which are Grade A space targeted towards BPO firms and multinational companies.
As a building owner, how do you set yourself apart from the growing competition? How do you make sure your building can compete with the newer developments? Here's where investing in amenities comes in.
Amenities Create Outstanding First Impressions
While cost efficiency and low bottom lines remain important to potential tenants, the development's use of builder-grade materials and up-to-date construction methods has become a priority, largely because companies now favor quality. More than operational efficiency, one of the major priorities of businesses, especially BPOs, is the attraction and retention of talent, which is the reason behind their willingness to spend on a headquarters that makes them look good.
PHOTO: Globe Tower Lobby, Bonifacio Global City Source: Spot.ph
According to Thomas Veccione of Gensler, office spaces need to be able to engage employees through "creating unique experiences that create value and function as a strategic business asset rather than just a workspace." This is why the current trend overseas is for building owners to allocate at least 10% portfolio space to amenities such as gyms and on-site dining, or 12% or more to attract highly sought after tenants.
By creating functional and aesthetically pleasing office spaces, one with an attractive lobby with lots of light and a bright colour palette, it would be easier for owners to attract potential tenants. Their tenants, on the other hand, are also more likely to attract the type of talent they are looking for.
Raising the Bar for Amenities
PHOTO: Avida Land Reception, Bonifacio Global City, Source: Spot.ph
In the Philippines, amenities typically compose of including roof decks, retail and dining options, and parking garage. Building owners may want to consider upping the ante for these usable shared resources. Some features may include fully equipped, professionally staffed fitness centers; easy access showers and rentable lockers; etc. to encourage employees to employ these healthy lifestyle solutions without leaving the office.
Investing on amenities may also help them create micro-communities in the office such as providing private tenant lounges to allow them to conduct meetings outside the office environment, complimentary WiFi, casual seating, café and garden settings, or creating a gaming area with TV and games are also other options. Putting these in tandem with the idea of live-work-play lifestyle promoted in several new buildings would likely add a premium to any development.
And this does not stop there. Amenity packages should also create a statement that differentiates the building from the rest, which means it is also important to upgrade security, ensure efficient registration process, provide high-speed elevators, and even optimize the cellular distributed antenna system to ensure that anyone can easily call wherever he is in the office and not interrupt a business call due to loss of signal.
High Cost of Amenities
PHOTO: Havas Media Ortega, Makati City Source: Spot.ph
Yes, these amenities may seem a lot, and cost is definitely a concern. Renovations could easily reach at least eight figures, which would only cover the lobby and certain areas of x tower. Capital expenditure projects could also increase tax assessments further and devoting more area for amenities will definitely cut into the revenue-generating suites.
The payoff might be worth it though - these amenities can make it easier to increase rental values, attract higher quality of tenants, improve tenant retention, and result in higher listing prices both in leasing and investment markets.
As long as the set of amenities is meaningful to the target demographic and it is executed properly, it would be considerably easy to gain the returns on their investment. Owners would be amiss not to look into this option, given that their property's amenity set can make the difference between an energetic, productive office and a high vacancy rate.