The Philippine offshore gaming operators are set to become the largest consumer of office space in Metro Manila before the end of 2019, overtaking the business process outsourcing sector despite the government’s move to tax foreign gaming workers, a property consultant said Wednesday.
Leechiu Property Consultants chief executive David Leechiu said in a news briefing the information technology-business management processing sector still led the demand for office space in Metro Manila with 244,000 square meters as of the first half. This was slightly better than Pogo’s takeup of 242,000 sq. m.
“But we expect the Pogo industry to be the biggest demand driver by year-end due to its faster site selection and the effect of the recent moratorium on Peza [Philippine Economic Zone Authority] applications in Metro Manila,” Leechiu said.
“Demand for office space from Pogo will continue until 2021 unless something dramatic happens like something happens with our relationship with China. That will continue to grow,” he said.
Leechiu said the government’s recent move to impose taxes on Chinese Pogo workers was not expected to dampen demand.
“This will just be another expense that they will bear and they have enough margin to cover for that,” Leechiu said.
Online gaming has been the fastest growing segment in the Philippine office market over the past four years, taking up substantial space in the Bay Area, Makati and Alabang. Outside Metro Manila, the industry also penetrated Clark, Cavite and Laguna.
The continued strong demand for office space from the Pogo sector is also expected to boost leasing rates for residential condominiums and reservation sales for residential towers.
“Rental rates have seen an increase of up to 80 percent from three years ago in the Bay Area. [Rent] Prices of studio units have increased from P18,000 in 2015 to P32,000 per unit per month in the first half of 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,” Leechiu said.
He said with the government imposing a moratorium on Peza ecozones in Metro Manila, the government should fast track the approval of ecozones in provincial areas.
Leechiu said that from 2019 to 2023, the office supply in Peza ecozones would reach 280,299 sqm. However, only 21 percent or 59,631 sqm were approved by Peza while 47 percent or 131,692 sqm was still being processed.
The balance of 32 percent or 88,976 sqm did not apply for Peza accreditation.
Real estate values hit all-time highs across all sectors this year. The highest land values were recorded in Bonifacio Global City at P1.3 million per sqm while the highest condominium value reached P600,000 per sqm at Horizon Homes.
Industrial land values also hit news highs because of the scarcity of supply especially in the provinces surrounding Metro Manila.