The expected return of Philippines offshore gaming operators will help in the recovery of the office space sector as the government continues to relax the restrictions on mobility and opens up more business categories and establishments, a property consultancy firm said Wednesday.
Leechiu Properties Consultant Inc. said during the International Innovation Summit 2021 that POGOs would benefit from the easing of border restrictions and the government’s willingness to open up to business travelers and leisure visitors.
“Since the borders are slowly opening up and people are able to travel more freely, we do expect that the current operators in the Philippines will start again,” LPC said.
It said that from being the largest demand driver in 2019, POGOs took a downturn amid the pandemic. In the last two years, the segment has not taken any space except for 1,000 square meters “which is more of an outlier.”
“As far as we can tell, the overall industry has taken this on a positive light and now. They may start to return to operations maybe by 2022. We may see some expansion from that industry,” the consultancy firm said.
It said while the POGO segment continued to hibernate, information technology and business process outsourcing companies were taking most of the available space in the market.
Estimates showed the office sector has a visibility of 228,000 square meters of live and active leasing transactions, with the possibility of take-up in the next six months. This should contribute to the overall demand that may end at 500,000 square meters for 2021.
The overall projected demand by yearend would exceed the 2020 numbers, but still below 2019’s landmark demand of 1.7 million square meters, LPC said.
It said that in 2022, the expansion is expected to happen, not so much in Metro Manila, but in the provinces. Iloilo emerged to be second largest recipient of demand after Metro Manila and is becoming the template for many of the provinces.
Transactions hit close to 383,000 square meters of leases up until the third quarter of 2021, which was 90 percent of 2020’s full-year transactions.
E-commerce and retail businesses like Lazada, Shopee, Grab and Food Panda expanded not only their office footprint but also their warehouses and industrial hubs.