The local market for office space experienced a big boost in the first quarter, thanks mainly to strong demand from offshore gaming operators—a subsector of the business process outsourcing (BPO) industry that is growing rapidly with the help of new government regulations.
In a recently published research note, international property consulting firm Pronove Tai described offshore gaming companies as “a strong but beleaguered” driver in the Philippine office market.
“While the office market is still largely driven by the information technology and business process management industry, offshore gaming companies as of end March have been the second single industry demand driver, accounting for 20 percent or 56,000 square meters of the ‘pre-leased’ office space scheduled for completion in the second quarter,” the firm said.
This demand is equivalent to three dedicated high rise office buildings out of the 18 buildings slated for completion in the second quarter of this year.
The property analyst said that a slowdown in the accreditation process by the Philippine Economic Zone Authority for new buildings has resulted in developers taking a second look at offshore gaming clients.
Offshore gaming companies are classified by the Philippine Amusement and Gaming Corporation as either service providers or licensed operators, both of which are technology-driven enterprises.
Service providers are gaming and software/platform providers, BPO providers, data/content streaming providers and gaming support providers.
Licensed operators, meanwhile, are gaming agents and those classified as special class BPOs which provide marketing and customer relation services only to duly licensed gaming operators overseas, must not handle betting activities for gaming operators and do not service any Pagcor Philippine Offshore Gaming Operator (Pogo) licensee.
To date, the Philippines is the first and only country in Asia to license offshore online gaming. Pagcor believes it can net an additional P10 billion in annual revenues from its Pogo licensees.