The total ban on the Philippine Offshore Gaming Operations (POGO) contributed to a significant decrease in the demand for office spaces in the third quarter of the year, property brokerage firm Leechiu Property Consultants (LPC) said.
In a statement, LPC said office take-up from July to September dropped by 21 percent to only 215,000 square meters (sqm), with the POGO industry’s downsize and other tenants’ transfer to newer spaces contributing to an increase in vacancies.
The POGO industry was one of the main drivers of the residential and office markets at the time of the Duterte administration, until getting totally banned by President Ferdinand Marcos Jr. this year amid their venture into illicit areas.
“The grave abuse and disrespect to our system and laws must stop. We need to stop them and their abuse to our country,” Marcos Jr. said.
Despite the decline in office take-ups this quarter, LPC said that the country is on track to surpass the one million sqm office demand registered last year.
“The year-to-date demand for office space has reached 900,000 sqm, marking an 11 percent increase over the first three quarters of 2023,” it said.
In terms of leasing pattern, LPC said tenants are now shifting from higher-quality buildings to offices that can offer better and larger spaces.
In terms of location, the bay area continues to be the top choice, with office take-up driven primarily by government agencies occupying 80,000 sqm in the first nine months of the year. Outside Metro Manila, Cebu remains the top provincial market with the higher take-up coming from the IT-BPM industry.
Makati and Bonifacio Global City continue to register the highest office rental rates in the country. Meanwhile, other cities with lower vacancy levels are seeing an increase in rental rates while those in other districts remained stable.
Vacancy rate remained at 17 percent, largely due to new building completions contributing 66,000 sqm of new spaces.