By Arra B. Francia, Reporter
REAL ESTATE consultancy JLL Philippines said China’s contributions to the Philippine real estate market are critical, noting how the presence of Philippine Offshore Gaming Operators (POGOs) offset the slowdown of business process outsourcing (BPO) companies’ expansion in 2018.
“We cannot forget that the investment from China is critical to this country at any level, residential, commercial, construction, infrastructure,” JLL Country Head Christophe Vicic during a round table discussion hosted by online real estate marketplace Lamudi in Makati on Tuesday.
“The Chinese money is important to this country, it’s part of the GDP (gross domestic product) growth.”
Mr. Vicic’s statement comes amid the increasing presence of Chinese nationals employed by POGOs in the Manila Bay Area. With more POGOs operating in Metro Manila, their employees have also started occupying nearby residential developments.
While this has caused a surge in demand for residential properties in the Bay Area and nearby business districts, panelists during Lamudi’s round table discussion noted that taking in POGOs as tenants has been challenging.
“It’s true that the POGO employee is not necessarily the most dedicated, most likely don’t speak English….Ultimately you need a certain discipline,” Mr. Vicic said.
For Anchor Land Holdings, Inc. (ALHI) President Digna Elizabeth L. Ventura, having Chinese tenants means cooperating with POGOs to ensure their workers comply with building rules.
“We’re working closely with the operator and making sure that the property management controls the situation and makes these people follow the rules,” Ms. Ventura said during the round table discussion.
Mr. Vicic said they are recommending that landlords keep a balanced mix of tenants in their properties, given the challenging nature of POGOs.
“If I were a landlord I would not rely on POGO for a long-term strategy only because it’s highly visible and politically-charged because of the nature of the industry,” he explained, adding that they conduct reference checks of POGO clients in China before taking them in as tenants to assure landlords.
Prices have accordingly risen following the surge in demand for residential projects in the Bay Area. With this, JLL Philippines Head of Research and Consulting Janlo delos Reyes said that local property buyers are being pushed toward the fringes.
“Prices are at around P300,000 per square meter, and that’s comparable to Makati and Bonifacio Global City. What’s happening is the Bay Area is pushing the domestic market away from that community, not only in terms of the sale but also in terms of the rents,” Mr. delos Reyes said.
“The local market is unable to keep up with that kind of pricing. Some of them are being pushed toward the fringes and other areas.”
Lamudi Philippines Chief Executive Officer Bhavna Suresh said that moving toward the provinces will be good for the country in the future.
“The only flip side there is infrastructure needs to catch up, we need to move our offices to these outskirt areas too,” Ms. Suresh said.