APAC-BFSI-Outlook-2017

OFFSHORING/OUTSOURCING HUBS While the o¥shoring movement began at the turn of the millennium, the wave of new regulations in the wake of the 2008 sub-prime crisis provided further impetus. The high cost of compliance compelled the financial industry to greater use of shared services and o¥shore centers as financial companies moved to centralize their risk, control and compliance activities.

India: Bengaluru Bengaluru’s position as a premier and global o¥shoring hub catapulted in the 1990s aided by incentives from the State government to MNCs, availability of talent and cost competitiveness. While the IT-BPM sector has long been servicing clients across various sectors, BFSI companies too have been seen to set up their captive centers for back-end operations. Since the last decade or so, the submarket of Outer Ring Road (ORR) emerged as a sought-after oŸce location as the city of Bengaluru expanded beyond its seams. While this submarket primarily caters to the IT sector, several BFSI companies are setting-up their back-end operations here. The market has now gained prominence led by the presence of Grade A buildings with modern amenities, and the need for companies to have large contiguous space for their back-end operations. The BFSI sector has leased a total of 1 msf in the ORR market since 2010 and has several prominent companies, such as Wells Fargo, Royal Bank of Scotland present here. Besides the ORR submarket, Whitefield too is seeing BFSI companies beefing up their back-end operations. In the last few years, companies such as JP Morgan Chase, Societe Generale, etc. have leased space in this submarket. A study of leasing activity since 2010 shows that the BFSI sector has leased approximately 1.1 msf of oŸce space in Whitefield. Going ahead, the ORR submarket will be the most preferred market for back oŸces of BFSI companies in Bengaluru, led by developing infrastructure, Grade A oŸce projects and competitive rentals. Considering that approximately 13.2 msf of oŸce space is expected to become operational by 2017 in ORR, the submarket o¥ers companies ample scope to scale up.

Manila: Bonifacio Global City In the span of a decade, Bonifacio Global City (BGC) has arguably become another premier business address alongside Makati City. And while the latter remains as the main CBD of the country, it is diŸcult to deny the rise to prominence of BGC. This relatively new urban area exhibited strong agglomeration of businesses and unprecedented construction of oŸce buildings in recent years. This is supported by the positive growth trajectory of market indicators, with oŸce rentals and selling prices of the district being comparable to and even poised to outperform that of Makati CBD. The planned movement of the Philippine Stock Exchange from Makati CBD to BGC serves to validate the potential of the district as an alternative business and financial hub. JP Morgan, HSBC and Deutsche Knowledge Services have established operations there.

MUMBAI, INDIA

38 ASIA PACIFIC BFSI OUTLOOK 2017