POGOs, BPOs to fight for limited office space in Metro Manila

THE Philippine Offshore Gaming Operators (POGOs) industry is expected to unseat the Information Technology and Business Process Management (IT-BPM) sector as the top office space occupier in Metro Manila by the end of the year, according to Leechiu Property Consultants (LPC).

In a press briefing on Wednesday, Leechiu President and Chief Executive Officer David Leechiu said that the POGO industry is projected to take up 450,000 square meters (sq.m.) of office space in Metro Manila by the end of 2019.

This will be driven by faster site selection process and the effect of Administrative Order No. 18, which noted that applications for office space within Metro Manila with tax incentives for BPOs will no longer be considered.

“We think that the POGO industry will overtake the BPO (Business Process Outsourcing) sector. For the first time in 19 years, the BPO sector is going to be number two,” Mr. Leechiu said.

In the first half of 2019, the IT-BPM still led the demand for office space in Metro Manila at 244,000 sq.m., with POGO take-up at 242,000 sq.m.

“Even with this moratorium in Manila, everyone now is scrambling to fight to lease the last 150,000 sq.m. of PEZA space in the market and right now, especially in Makati, they are competing now… for the same space,” Mr. Leechiu said, identifying the building as Century Diamond Tower owned by Century Properties Group, Inc.

At the current pace that the industry is growing, Mr. Leechiu said demand from the POGO industry is seen to grow at a faster pace compared to BPOs.

POGOs continue to prefer the Bay Area, with 139,000 sq.m. of office space taken up in the first half. These companies also took up office space in Makati City (46,000 sq.m.), Quezon City (40,000 sq.m.), Ortigas (9,000 sq.m.) and Alabang (8,000 sq.m.).

Mr. Leechiu said once supply in the Bay Area is depleted, POGOs are seen to move to Quezon City, competing with IT-BPM industry.

Outside Metro Manila, POGOs have expanded to Laguna, occupying 46,000 sq.m. of space; 37,000 sq.m. in Cebu; 34,000 sq.m. in Clark, Pampanga; and 13,000 sq.m. in Cavite. Total employee count is currently at 354,000, bulk of which are Mainland Chinese.

The increase in Chinese workers has also fueled the leasing demand for residential condominiums in Metro Manila.

““Rental rates have seen an increase of up to 80% from three years ago in the Bay area. Prices of Studio units have increased from P18,000 in 2015 to P32,000 per unit per month in 1H 2019. One bedroom units have gone from P25,000 back in 2015 to P55,000 per unit per month while a two bedroom unit’s price rose from P55,000 to P90,000 per unit per month,” the LPC report stated.

Phillip Anonuevo, LPC executive director for commercial leasing, said they expect the POGO industry to add around 50,000 employees every year — “that is probably 10,000 to 15,000 units of apartments.”

On the POGOs’ growth forecast, Mr. Leechiu said that it will depend on government policies on regulating the industry.

“Depends how fast we allow them to grow here. The problem is not them, the problem is us. We’re the ones slowing them down because we need to regulate, we need to understand what it means, we need to see who they are, who need to know them, but the moment we have this familiarity with them, we will embrace them,” he said. — Vincent Mariel P. Galang