Property consultant Colliers said office space demand will remain strong despite the scheduled full exit of Philippine offshore gaming operations (POGO) following the issuance of an executive order (EO) ordering their ban.
Colliers believe the spaces vacated by POGOs may even offer occupiers greater flexibility and choice in meeting their office space requirements.
“Even without POGOs, office demand in the third quarter performed better than the quarterly average of 174,000 square meters (sq.m.), indicating a robust demand as traditional and outsourcing companies continue to take up space, with 57 percent of these firms’ motivation for taking up space is expansion,” Collier said.
It said this is an indication the POGO ban has not dampened demand from the two industry groups.
EO 74 dated November 5 orders all POGOs, internet gaming licensees (IGLs), and other offshore gaming-related/auxiliary/ancillary services with issued licenses and permits to completely cease and wind-up operations on or before the December 31 deadline.
The EO also disallows the application and renewal of new licenses, permits, and authorizations.
“According to the Department of Justice, the EO also applies to all economic zones, such as the Cagayan Economic Zone Authority, that have special charters that allow them to issue licenses to POGOs and IGLs,” Colliers said.
Colliers said as of end-September, POGOs have vacated 57,000 sq.m. of office space. It expects another 157,000 sq.m. of vacancies by the end of the year as some operators have notified their landlords of their lease terminations and non-renewals.
“The current POGO-occupied stock of 275,000 sq.m. only represent 1.9 percent of the total stock in Metro Manila. During its peak, around 1.3 million square meters of office space was leased out by POGOs,” it said.
Colliers said rents have normalized. During peak years, rents have gone as high as P1,500 per sq.m. per month.
“The lower rental cost makes the Philippines even more attractive for the IT-BPM (information technology-business process management) sector and traditional businesses, supporting the country’s position as a competitive destination for office setups and expansions in the region,” it said.
