The exodus of Philippine online gaming operators resulted in P1.4 billion worth of losses in terms of office rent this year, Leechiu Property Consultants said Tuesday.
LPC chief executive David Leechiu said in a online press briefing some 540,000 square meters of office space were vacated in 2020, of which 51 percent or 277,000 sq. m. came from POGOs.
He said majority of the vacated office spaces were located in Metro Manila, primarily in Makati, Quezon City and the Ortigas-Mandaluyong area.
Aside from the impact of the pandemic, many POGOs exited the Philippines because of China’s clampdown and high taxes imposed against the industry.
LPC said that despite the negative developments, the office market was expected to recover next year with demand likely to reach up to 600,000 sq. m. from 381,000 sq. m. in 2020.
Leechiu said a pipeline of 300,000 sq. m. of office space would be ready to close by the first four months of 2021.
He said the office space vacated by POGOs, particularly thosein Philippine Economic Zone Authority-accredited buildings, would likely be taken up by the IT-business process management sector which are eligible for tax incentives.
“Developments in the last two quarters have created compelling opportunities for IT-BPM players. We are thus confident that they will continue expanding in the country which remains a leading outsourcing arena for global businesses now seeking to cut costs and recover from COVID losses,” said Leechiu.
LPC said the retail sector was also showing signs of increasing activity because of the easing lockdown measures.
Leechiu said sales of food and specialty retailers were 47-percent to 75-percent back to pre-pandemic levels.
About 76 percent of retail spaces of mall operators were fully-leased and operational while 12 percent were still closed due to the pandemic.
LPC also expects tourism to boost the economy in phases beginning with domestic tourism in the form of road trips to favored destinations through newly opened highways.
“We have every confidence that the rollout of the vaccine in 2021 will create unprecedented market euphoria that will dramatically benefit the real estate industry. A confluence of factors—from record-low, long-term interest rates, to the country’s fantastic fiscal fundamentals that have resulted in good credit ratings, to newfound mobility and tourism opportunities from a massive injection of infrastructure projects—will ensure that,” said Leechiu.