BPO Philippines to Boost Logistics Market

The Philippine business process outsourcing (BPO) industry is expected to boost the country’s logistics sector, according to consultancy firm Colliers International. Colliers said the booming BPO industry has led to a huge demand in purpose-built facilities and made logistics an exciting investment area as capital flows increase. 

“The logistics sector in Asia looks very exciting in terms of expansion into new locations for development, and the adoption of innovative business models by various players in the market,” according to Colliers’ global outlook for 2016.

Colliers’ chief executive officer for Asia Pacific David Hand stressed that the technology sector, e-commerce businesses in particular, will be one of the most active in Asia due to sustained business growth. However, Hand added that lack of supply of land is making it difficult to build new warehouses for logistics investors and occupiers. 

Hand predicts that new transportation infrastructure like port expansions and road links will also create more inland spots for logistics activity and accelerate development of logistics real estate. 

China’s ‘One Belt, One Road’ project that aims to connect Asian countries to Europe is set to move from the blueprint stage to actual construction in 2016, further brightening logistics prospects in the Philippines and the rest of Asia.

Property advisory firm CBRE said in a separate report that e-commerce and third party logistics (3PL) activity were the main drivers of leasing demand for logistics in Asia in the third quarter of 2015. Demand for logistics space in Asia Pacific also remained strong in Q3 despite the prevailing gloom in most markets.

Colliers expects to see more foreign capital entering the region in 2016 due to cross-country mergers and acquisitions. As for the lack of land problem, Colliers proposed partnerships among occupiers, operators and investors as a solution.