By Francis A. T. Valentin
Special Features Assistant Editor
DEMAND from a growing number of Philippine Offshore Gaming Operators or POGOs for properties is invigorating the residential real estate market of Metro Manila.
“The big difference between what has happened in residential real estate in recent years versus in previous years is that we did not have many new residents coming in… Over recent years, however, we’ve had this influx in the POGO market, where people by the thousands are coming over and they are taking up residence in Metro Manila and even offices. This has spurred a new demand for residential real estate,” Thomas F. Mirasol, chief operating officer of Ortigas & Co., said in a roundtable discussion organized by the online property portal Lamudi Philippines last week.
“For residential developments, the POGO market probably represents one of the newest and most significant changes in the real estate industry,” Mr. Mirasol said.
According to data from the Philippine Amusement and Gaming Corp., the government agency overseeing offshore gaming operations in the country, there were 57 licensed POGOs as of September this year.
“The growth of the POGO industry has been quite strong, and this has spurred a lot of take-up for residential units. In fact, if we take a look at vacancy rates in Metro Manila, generally, they are coming down, much of that is because of the POGO industry,” Mr. Mirasol added.
In its latest residential property market report, real estate consultancy Colliers International Philippines noted that vacancy rate in Metro Manila dropped from 12.4% in the first quarter of 2018 to 11.3% in the second quarter. This improvement was ascribed by the firm to stronger leasing from foreign and local professionals working in Central Business Districts (CBDs) and Chinese investors and workers employed by offshore gaming companies.
Condominiums at the fringes of the Makati CBD, Colliers said, have become popular with Chinese offshore gaming employees because these buildings are near their workplaces. The firm also said that the Manila Bay Area is benefitting from the strong demand from Chinese nationals employed by offshore gaming companies in the area.
Michael McCullough, managing director of KMC Savills, Inc., another real estate consultancy, said during the same Lamudi Philippines roundtable discussion that in the last two years, POGOs have taken up some 800,000 square meters of office space.
According to the office briefing report covering the second quarter of 2018 of KMC Savills, the vacancy rate in Metro Manila stood at 3%, down from the previous quarter’s 3.8%. Alabang, the firm said, had an above-average rental year-on-year growth rate of 5% as POGO tenants settled in the area.
“Managing a property that has POGOs operating in it is quite a bit of a challenge,” Mr. McCullough said, “but it’s been a really huge opportunity for landlords in a couple of areas like Makati and Pasay.”
By Francis A. T. Valentin