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Property sector remains buoyant

Property developers remain bullish despite the uncertainty of offshore gaming operations in the county.

Property firms said that while Philippine offshore gaming operators emerged as one the largest office space customers in the past few years, the demand from traditional offices and business process outsourcing companies remained steady and would readily compensate for any decline in POGO demand.

Leechiu Property Consultants chief executive David Leechiu reported in July that POGO would 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 POGO workers.

“But we expect the POGO industry to be the biggest demand driver by yearend 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.

DoubleDragon Properties Corp. chairman Edgar Sia II said he was unfazed by the uncertainty of POGO operations.

“While would like that to continue because we get better yields from POGO, under the worst-case scenario, we are covered because have a diversified leasable space,” Sia said.

Sia said the company’s office space leased to POGO, currently representing 12 percent of the group’s total leasable space, were fully covered because the lease contract was locked for a period of 12 months. 

The location of office spaces leased by offshore gaming operators—the Bay Area in Pasay City—is a prime site which makes it easier for the company to lease out the office space to other locators in the event that offshore gaming operations were banned in the country.

Sia said DoubleDragon has diversified leasing portfolio that also includes hotels, community malls and industrial space.

Megaworld Corp., the biggest lessor of office space in the Philippines, also said the POGO issue would not affect its office and residential businesses as its exposure to the sector remained manageable.

Megaworld said POGO accounted for 12 percent of the group’s total rental space in terms of gross leasable area and contributed about 8 percent of total rental income.

Vista Land & Lifescapes Inc., an integrated property firm owned by the Villar family, said it remained bullish on its leasing business despite the crackdown on POGOs.

Vista Land president and chief executive Manuel Paolo Villar said the group’s leasing portfolio was comprised mainly of retail malls and commercial center and had very limited exposure to POGOs.

“Our leasable spaces are mostly retail malls which limit our POGO exposure and any crackdown to those POGOs will not impact on our overall financial performance,”  Villar said.

The government is currently tightening its regulations on the POGO sector, which is dominated by Chinese workers.

China signaled a crackdown on cross-border gambling which is being linked with money laundering and other criminal activities. 

Topics: Philippine offshore gaming operators , Leechiu Property Consultants , David Leechiu , Philippine Economic Zone Authority
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