Homegrown real estate consultancy firm PRIME Philippines is bullish about prospects from China jacking up their investments here — not only because of Philippine offshore gaming operators (Pogo), which employ mostly Chinese workers, but also because of manufacturers and industrial firms coming from mainland China.
In an interview on Wednesday, Jettson Yu, the founder and chief executive of PRIME Philippines, said that at present 20% of the firm’s clientele come from mainland China.
By October, with its satellite office opening in Shanghai, the firm expects the share of Chinese clients to jump to 40% in the near term, Yu told the INQUIRER.
“We will be the first local, Pinoy real estate consultancy firm to expand globally,” he said.
At present, most of the Chinese that lease from PRIME Philippines’ portfolio use up industrial and office space in Bulacan, Cavite, Laguna, and Pampanga, Yu said.
In general, Chinese companies are bullish about investing in the Philippines because “they like the stronger ties that the Philippine government established with their president,” Yu said, referring to Chinese President Xi Jinping.
To date, Filipino clients cornered the biggest share — 60% — of the company’s business, but even these clients include Pogos being run by locals, according to Yu.
So far this year, PRIME Philippines has already sealed leasing deals with Pogos for 30,000 square meters of office space, with another 70,000 square meters expected to be leased before yearend, he said.
These 100,000 square meters of Pogo-leased space will be in Makati, Mandaluyong, Quezon City, and in Clark in Angeles, Pampanga.
According to Yu, Pogo firms pay a premium for the space they lease.
“For example, if the space costs P700 per square meter, they pay 30% more or about P900 per square meter,” he said. “In practice, the rate for Pogo and the rate for traditional companies vary.”
But Yu said his firm would advise real estate companies to put a cap — a maximum of 50% — for occupancy of Pogos in their properties.
“It’s always good to have a good tenant mix to diversify the risks and rewards,” he explained.
Cholo Florencio, PRIME Philippines assistant vice president for property advisory in Luzon, told a forum also on Wednesday that they expected the Pogo sector “to overtake the BPO [business process outsourcing] industry in terms of demand” for office space.
“Not only is it not allowed in China to gamble but a lot of Chinese companies find rent much cheaper [here],” Florencio said.
Since being established in 2013, PRIME Philippines has already served more than 4,000 clients, completed over 200 projects, and sealed over P30 billion in deals in more than 10 countries, the company said.
PRIME Philippines is engaged in leasing and sales of industrial, office and retail space; property acquisition and disposal; asset management solutions; real estate documentation; real estate research and advisory; and customized real estate solutions.