THE Philippine Offshore Gaming Operators (Pogos) will help sustain the strong office space demand in Metro Manila amid a slowdown in the information technology-business process management (IT-BPM) industry’s uptake of the supply, said a top-ranking official of a commercial real-estate consultancy firm.
At the sideline of their midyear property market briefing held recently in their Quezon City headquarter, Prime Philippines AVP for Property Advisory Cholo Florencio told the BusinessMirror that the increased requirement coming from the Pogos could be attributed to their rapid expansion, particularly in the Bay Area.
Filinvest Cyberzone Bay City and Five E-Com Center in the Mall of Asia complex
“Unfortunately, office spaces are slowly running out,” he noted. “That’s why more developments are coming in to cater to the demand of the online gaming companies.”
With the lack of supply that caters to them, other cities are now being explored for their new locations, he said.
“Right now, I think, there are still some in Makati. Quezon City is [also] one of the areas that these companies are looking at,” Florencio bared.
These Web-based gaming providers, according to him, need office space ranging from 5,000 square meter to 15,000 sq m. They are willing to pay premium rates, he added.
Per the latest Prime Philippines’s study, IT-BPM accounted for around 38 percent of the total office space lease transactions in Metro Manila from January to March of 2018.
This was followed by the Pogos with an absorption rate of 21 percent. The rest, or 41 percent, of the aggregate inventory was rented out to traditional companies.
In terms of growth, the monthly rental fee per sq m in the Bay Area outperformed other financial hubs in the metropolis, at 50 percent from P800 to P1,200 in 2017 and 2018, respectively. Bonifacio Global City, up 20 percent, from P1,000 to P1,200; Makati, up 8 percent, from P1,200 to P1,300; Ortigas, up 7 percent, from P750 to P800; and Quezon City, up 7 percent, from P700 to P750.
Fast-rising lease rates—at a maximum of P1,400 per sq m—resulted from the strong offshore gaming demand. It is noted that around P18 billion worth of office space acquisition transactions across 10 properties were closed during the two periods in review. The robust growth of hotel and casino revenue performance last year reflected the continued expansion of the Bay Area.
Florencio said that offshore gaming firms are looking forward to continue their aggressive leasing until the end of the year, with constant demand spilling over outside of the Bay Area.
Quezon City and other locations are starting to receive the spillover. Clark, on the other hand, has already a committed offshore gaming entrant, with foreign investors keen on transitioning to invest there.
Approximately, a demand of at least 280,000 sq m of office space from Pogos will be sustained by the second half of the year.
“We’re continuously trying to see some cities that are opening up [for offshore gaming locators]. But right now, the cities who are open to online gaming are very limited in number,” he said.