$150 million investment to build Grade A office space in the rapidly emerging BPO office destination of Clark, Philippines
The Philippines is one of the fastest growing office markets in Asia and the second largest BPO outsourcing destination globally.
$150 million represents one of the largest investments in recent times by foreign investors into the country’s real estate sector.
Clark Freeport Zone, 80 km from Metro Manila, is well positioned to thrive as an emerging BPO hub for the country as existing occupiers look for cost effective expansion outside Manila and new occupiers enter the market.
ADM Capital (“ADM”) and BPE Asia Real Estate (“BPE Asia”), an affiliate of Baring Private Equity Asia (“Baring Asia”), announced today the closing of an initial US$150 million investment to finance the construction of Grade A office space as well complementary infrastructure within the 177 hectare Global Gateway Logistics City (GGLC) in the Clark Freeport Zone north of Metro Manila.
BPE Asia and ADM Capital are leading a consortium of investors to provide the cornerstone capital for the construction of five Grade A office buildings with a total gross floor area of approximately 142,000 square meters (1,530,444 square feet). The project, located directly across from The Medical City Clark Hospital within GGLC’s AeroPark, will be the first office space constructed on the GGLC site, which when fully built-out will provide approximately 5.8 million square meters (62.4 million square feet) of office, logistics, industrial and supporting retail and hotel space.
The GGLC site is strategically located next to Clark International Airport, within a former US military base. Under the management of KGL Investment Company (“KGLI”) the site has been transformed from rural land to a master planned precinct, complete with high quality infrastructure as well as an operating medical facility. GGLC is also strategically located in close proximity to major freeways and a nearby deep-water port, making it well-suited to being a logistics and office hub for the country.
Construction of the first phase of office buildings on the site is set to commence in November 2015 and pre-leasing is already underway. Large occupiers such as Texas Instruments, Convergys, Samsung and iQor have already established a presence in Clark and other multinational corporations have been looking at expansion within the area.
Christopher Botsford, CEO of ADM Capital said, “We have been involved with KGLI on the GGLC site for some time, having funded The Medical City building and are pleased to continue working with KGLI in the construction of their first office buildings within the park, bringing much needed high quality office space to the Clark area.”
Mark Fogle, Managing Director & Head of Real Estate for BPE Asia said, “Strong demand for office space in Manila has resulted in high occupancy and rising rental costs, leading existing occupiers and new entrants to look to secondary markets such as Cebu and Clark. The Clark area is well-positioned to thrive given good accessibility and rents that are approximately half that of Metro Manila. With our own development and construction expertise in-house, BPE Asia looks forward to working closely with KGLI to deliver this high quality project.”
Mark Williams, CEO of KGLI Asia said, “We are looking forward to working with ADM and BPE Asia in what is an exciting new phase of development of the GGLC site. Office buildings in the greater Clark region generally are of inferior quality to buildings in Manila and with the addition of new high quality office space located in a well-designed master planned precinct within the Clark Freeport Zone and directly adjacent to the Clark International Airport, we foresee the Clark Freeport Zone emerging as a new office and logistics hub for the Philippines.”
Richard Barton, Newgate Communications
T: +852 3758 2686
M: +852 9301 2056