IT, BPO firms rescue PH office market from POGO vacancies, says Leechiu
Forget prepandemic recovery. The office sector instead cheered its recovery to the pre-Pogo state, thanks to Information technology (IT) and business process outsourcing (BPO) firms that scooped up vacancies left by China-focused gambling companies known as Philippine Offshore Gaming operators (Pogo).
“Contractions appear to have levelled off and it feels like we are back to 2016 before POGOs hyper-charged the market beginning in 2017,” David Leechiu, CEO of Leechiu Property Consultants, said in a statement on Monday.
IT firms and BPO companies have “once again saved the day for the Philippine office market.”
Leechiu said these accounted for nearly half of the 692,000 square meters (sqm) of office space demand since the beginning of the year.
This was already 27 percent higher than the full-year figure in 2021.
For the third quarter alone, office demand hit its highest level since the start of 2020 after surging 240 percent to 313,000 sqm from the same period last year.
Office landlords witnessed an exodus in Pogos during the latter part of the Duterte administration amid taxation uncertainties and amplified by travel bans during the COVID-19 pandemic. The industry faces further challenges as some politicians call for a complete ban on Pogos.
Leechiu Property said Metro Manila vacancies stood at 18 percent.
Mikko Barranda, Leechiu Property director for commercial leasing, said the industry was registering growth despite consistent Pogo contractions over the past two years.
“We are pleased that the Philippine IT-BPM (business process management) sector continues to provide a crucial service to many firms in the West especially in times of uncertainty. Seasoned IT-BPM observers have projected the sector will continue to expand its headcount in the next few years,” Leechiu said in a statement.
“Even if work-from-home arrangements remain popular, we are confident they will continue to hold up the Philippine office market and economy as they have done in the past two decades,” he added.
Meanwhile, Leechiu Property said quarterly sales of residential condominiums in Metro Manila increased by 6 percent.
[D]evelopers seem to be more confident of better days ahead as shown by the number of new launches which has increased by 127 percent since Q2 2022,” according to Roy Golez, director for research and consultancy at Leechiu Property.
The government has targeted the delivery of one million affordable housing units annually to address the current backlog of 6.5 million units, the company added. INQ
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