The Philippine offshore gaming operators overtook the business process outsourcing sector as the top office space demand driver in the first nine months, according to real estate services firm Leechiu Property Consultants.
LPC chief executive David Leechiu said in a news briefing that of the 1 million square meters of office space taken up in the first nine months, POGOs accounted for about 34 percent or 386,000 sq. m.
The POGO office take-up represented a 109-percent increase from the same period last year and marked the first time for the offshore gaming industry to be the top demand driver for office space since 2016.
LPC expects POGO demand for the whole year to reach 420,000 to 450,000 sq. m. and BPO demand to account for 350,000 to 400,000 sq. m.
“If we’re very lucky, then POGOs will exceed the historical high of BPOs, which was 485,000 sq. m. back in 2016. But if we are super-duper lucky, then we will get the BPO sector close to 450,000 this year,” Leechiu said.
LPC said that Bay City accounted for 502,000 sq. m. or 36 percent of the total POGO footprint in the country since 2016, followed by Makati City with 20 percent. The other major sites are Alabang, Cavite and Quezon City.
Meanwhile, the information technology-business management processing or the outsourcing sector took up 31 percent of the total office demand in the nine-month period at 335,000 sq. m.
Leechiu expects the trend to continue for the remainder of the year as demand from POGOs remained steady following President Rodrigo Duterte’s visit to China.
“POGO sector has gone ballistic since two weeks ago when Cambodia’s online gaming industry was exiting and halfway through President Duterte’s trip to China, the POGO just started to aggressively take office spaces,” Leechiu said.
“In the last three weeks they [POGOs] have taken up 230,000 square meters of office space through Metro Manila, including pre-commitments,” he said.
Leechiu said the office space demand by the IT-BPM sector was also expected to continue to grow as the current recessionary environment in many major economies and the recent developments in the Middle East over the weekend would most likely accelerate the take-up rate of the BPOs in the next 12 months.
Data showed that of the total 355,000 sq. m. taken up by IT-BPM, 17 percent were registered as new office developments in Cebu and Clark.
Leechiu said that as demand for both office space from POGO and IT-BPM sectors remained strong, the overall prospects of the real estate industry would continue to improve.
Leechiu said the IT-BPM and POGO industries would continue to make significant contributions to the national economy, with the IT-BPM industry generating about $1.3 billion worth of annual office rental income and the POGO industry contributing $219 million.