By Bernie Cahiles-Magkilat
The Philippine Offshore Gaming (POGO) industry surged ahead of the IT-BPM sector for the first time as the country’s top demand driver for office space, according to David Leechiu, CEO of Leechiu Property Consultants, a leading real estate services firm.
Of the total Philippine office take up of 1 million square meters, POGOs accounted for 386,000 sqms or 34 percent year-to-date while the IT-BPM sector recorded 355K sqm. In Metro Manila, POGO takeup was at 375k sqms, a 109 per cent increase from the same period last year.
Nevertheless, Leechiu does not discount growth from the IT-BPM sector. Of the total 355k sqm. taken up by IT-BPM, 17 percent of that registered as new office developments in Cebu and Clark. He noted that the recessionary environment in many major economies and the recent developments in the Middle East over the weekend would most likely accelerate the take up rate of the IT-BPM industry in the next 12 months.
Meanwhile, industrial locations highly accessible from Metro Manila like those in Cavite, Laguna, Batangas and Bulacan have also risen in value driven by strong demand from the logistics market. Warehouse occupancy rates in Metro Manila are now at the 98 percent level and are pushing prospective locators to put up new warehouse complexes in surrounding provinces that have become more easily accessible because of major infrastructure projects under the current administration’s “Build, Build, Build” program.
Once completed, warehouse lease rates along the Cavite-Laguna Expressway, for example, are projected to increase by 10 to 25 percent indicating strong demand. The new expressway will traverse the towns of Imus, General Trias, Dasmarinas, Silang, Binan and Carmona.
He was confident about the overall prospects of the real estate industry would continue to improve considering too the recent increases in Foreign Direct Investments to the country.
Leechiu observed that the IT-BPM and POGO industries continue to make significant contributions to the national economy with the IT-BPM industry generating about $1.3 billion to the office annual rental income and the POGO industry contributing an estimated $219 million.
The POGO industry annually generates $8.3 billion in salaries exceeding the IT-BPM industry’s $6.2-billion contribution. The POGO Industry is also notable driver for the residential market which generates an annual housing rental income of US$ 641 million.
POGOs have taken up substantial space in key Metro Manila business districts and other areas since they first established facilities in the country in 2016. Bay City accounts for 502k sqm. or 36 percent of total POGO footprint in the country. It is followed by Makati City at 20 percent; Alabang , Cavite and Quezon City.