Companies seen ditching office spaces if WFH setup lasts longer
MANILA, Philippines — Companies would likely start ditching traditional office spaces if the current work-from-home setup stay for much longer, threatening to upend the business of landlords that have grappled with high vacancy rates amid the pandemic.
While there is a “remote” possibility that this would happen, David Leechiu, chief executive of real estate brokerage firm Leechiu Property Consultants Inc. (LPC), told journalists at a virtual media briefing on Monday that such a scenario could materialize “three years from now” if workers won’t return to the office.
"It might be too early to say where this is going. Risk is that big chunk of companies terminates their leases," Leechiu said.
To help nurture a nascent economic recovery, the Duterte administration recently upheld a decision requiring Information Technology Business Process Management (IT-BPM) companies in economic zones to send back 70% of their workforce to offices by April 1.
Firms that would defy the order will lose their tax incentives. Already, some of the country's biggest property firms have joined the government in encouraging employees to return onsite.
Leechiu said there are multinational companies that want workers back in offices because of numerous “security breaches” they dealt with. In an earlier briefing, LPC reported that some firms had problems with employees resigning from their posts without returning work-from-home equipment like laptops, which may contain confidential company data.
Productivity is also an issue for these multinational firms, Leechiu said, because this was a “big compromise” for these companies when they decided to implement remote work. This, despite numerous studies showing that productivity improved for professionals in select industries due to the work-from-home setup.
Some call centers in ecozones are reportedly willing to lose their tax breaks just to continue remote work for their employees, who would need to contend with expensive fuel when they return onsite regardless if they drive cars or commute to work.
For now, Leechiu believes that an exodus of IT-BPM from office spaces is still far from happening, citing the need for these companies to send employees they hired at the height of the pandemic to the office for mentoring.
But should companies decide to terminate their leases, Leechiu said property firms should offer "early renewals to secure longer lease terms" and "extend incentives" to keep existing tenants.
He added that companies should adopt an “acceptable” ratio for onsite and offsite reporting.
"Many companies will find stability in going back to the office, even in the BPO sector. All this headcount hired in last two years, they’ll say we’ll need to bring them back in the office. You’re going to see a mad scramble for office space," Leechiu added.
LPC forecasts 650,000 square meters of office space could be leased out this year, higher compared to the 540,000 square meters leased in 2021 as employees return to offices.
LPC said there would be greater IT-BPM office activity in provinces such as Bohol, Cagayan de Oro, and Bataan throughout the year, as firms have looked outside Metro Manila to expand.
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