Leechiu: The pogos are coming back
The exodus of Philippine Offshore Gaming Operator (Pogo) companies that characterized Metro Manila’s office sector woes in 2020 is over and demand for new space is back, the real estate veteran said on Tuesday. David Leechiu.
This reversal was in part due to new tax compliance legislation from Pogos – whose operations primarily target gamers in China – and the potential easing of international travel restrictions as COVID-19 vaccinations increase. ‘intensify.
The industry has also received a powerful boost after President Duterte said last week he was banking on the offshore gaming industry to raise funds to support the country’s response to the pandemic.
“We are starting to see a number of our Pogo clients coming back,” Leechiu, CEO of Leechiu Property Consultants, told reporters in an online briefing Tuesday.
The latest data from Leechiu Property showed that Pogos was in talks to lease around 17,000 square meters of new office space in the second half of 2021.
This only represented 5% of the expected 330,000 m² that would be leased in the second half of the year, the majority or 58% still coming from the outsourcing of IT and business processes.
But that compares to a major contraction led by the Pogo sector from early 2020 through the first half of 2021.
During the period, Pogos freed up 454,000 m² of office space, or 50% of the total decrease, while IT and BPO lost 131,000 m² and other businesses accounted for 333,000 m².
According to the company, Pogos’ exit has slowed sharply since then due to Senate Bill 2232, which clarified the taxation of offshore gambling operations.
“Classified as urgent and now in final reading, the Senate bill is expected to be enacted soon,” Leechiu Property said.
Leechiu had another explanation: sites such as Dubai, Romania, Malaysia, Thailand, Vietnam and Cambodia could not absorb their capacity.
At the same time, overall demand for offices in the first half of the year stood at 291,000 m². Combined with the ongoing negotiations, demand for the year 2021 would reach nearly 600,000 m², or 54% more than in 2020.
Another driver of demand has been the end of work-from-home agreements as the economy recovers.
“Working from home is working because your workload has been cut in half by this crisis,” Leechiu said. When the workload returns to 100 percent, he expects more difficulty balancing the demands of family life and work responsibilities at home, thus returning to the office environment.
Meanwhile, the real estate industry as a whole has remained strong during the pandemic, and prices have seen minimal decline despite the economic recession.
Data from the company shows that property prices in major business districts have also returned to pre-pandemic levels, although rental rates in areas such as Alabang, Manila Bay and Pasig remain significantly lower due the slowdown in the Pogo sector.
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