Philippine offshore gaming operations (POGO) have vacated 123,000 square meters (sq.m.)of office space since the escalation of the coronavirus disease 2019 (COVID-19) pandemic, property consultant Colliers International said.
This is expected to bring the year-end vacancy to 7 percent, excluding building completions expected for the second half of the year.
Colliers said a continued reduction in POGO-occupied spaces, particularly those found in Philippine Economic Zone Authority (PEZA)-accredited buildings will benefit business process outsourcing (BPO) locators in need of additional spaces for their operations.
“The lack of PEZA-registered supply due to limited approvals by the government since 2016 and the issuance of the Administrative Order 18 banning the approval of new PEZA zones in Metro Manila in June 2019 caused the artificial rise in rental rates,” Colliers said.
“With some PEZA-registered spaces being given up by POGOs, the availability of PEZA-registered spaces improved by 54,000 sq.m., thus putting additional downward pressure on rents on top of the COVID-19 pandemic effect,” it added.
Colliers also noted the available total area size per building are ranging from 1,000 up to 33,000 sq.m., which are handed over either in fully fitted or as-is-where-is conditions, and can be found in Alabang, Quezon City and Ortigas
“Should POGOs continue to downsize, 294,000 sq.m. of their remaining office footprint are in PEZA-registered spaces, which could benefit BPOs with immediate office requirements, whether permanent or temporary,” said Dom Fredrick Andaya, Colliers director for tenant representation.
“This is on top of the other PEZA-registered spaces that were vacated by non-POGO occupiers,” he added.