The impending exit of Philippine offshore gaming operators (Pogos) will only affect certain areas in Metro Manila, particularly the sprawling Bay Area entertainment district, with the office sector expected to recover by 2025 and 2026, according to Colliers Philippines.
Kevin Jara, office services director at the real estate investment management firm, said earlier this week that Pogos were currently concentrated in “limited markets.”
Jara explained that vacancy may increase to a maximum of 51 percent in the Bay Area spanning Roxas boulevard if Pogos exit the market this year.
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In Makati, vacancy rates may rise to 43 percent.
“Other areas are not affected primarily because the Pogos were not allowed to operate in these locations in the first place,” he added, citing Fort Bonifacio in Taguig City as an example.
Pogos, which President Marcos ordered banned effective immediately during his third State of the Nation Address, currently occupy 3.5 percent of the total office space in Metro Manila. This is down from 10 percent in 2019, according to Colliers.
While the company estimated the Pogo exodus to result in a 22.2-percent office vacancy by the end of the year from the current 18.3 percent, Jara said vacancy rates may recover to 19 percent by 2025. By 2026, this may further ease to 18 percent.
In the meantime, Jara noted that the business process outsourcing (BPO) sector, as well as traditional office occupiers, would remain the main demand drivers.
“We don’t see any cause for any lasting concern in the office market because of this ban,” Jara said during Colliers’ second quarter property market briefing.
He likewise pointed out that Pogo occupation in the office space had been gradually going down since the pandemic.
Colliers data show that in 2019, Pogos occupied around 1.3 million square meters (sq m) in Metro Manila.