Demand for local office space picked up pace this year, but a sustained growth in 2023 would depend on whether the embattled Philippine offshore gaming operator (Pogo) industry could survive phaseout calls, real estate brokerage firm Leechiu Property Consultants (LPC) said.
This year, LPC reported that demand for office space had reached 975,000 square meters (sqms), rising from 540,000 sqms in 2021 and 389,000 sqms in 2020.
Citing a “conservative” view, LPC chief executive officer David Leechiu said in a press conference on Monday that 2023 demand for office space may ease to 750,000 sqms.
But “if the Pogos are allowed to flourish here, then that would easily be doubled,” Leechiu said, adding that demand could instead return to the 2017 and 2018 levels of about 1.2 million sqms.
“If we’re really, really lucky, it will reach 1.7 million [sqms] again, which we saw in 2019. It’s possible if we allow them to exist here,” he added.
Some groups have urged the government to boot out Pogos, which mostly cater to online gamblers from mainland China, citing social, governance and financial risks.
The information technology and business process management sector accounted for the biggest office space market, with a takeup of 466,000 sqm this year, according to LPC.
This is despite the prevalence of the hybrid work arrangement.
LPC added that traditional office occupiers registered a substantial takeup of 448,000 sqms, after many firms mandated a return to the workplace. The peak demand was seen in the third quarter, when it hit 313,000 sqms.
“Up to mid-2022, it was difficult to visualize year-end demand hitting close to the 1 million-sqm mark,” Leechiu said.
“The results have exceeded expectations but we can’t put our guard down just yet,” he added.
Makati City and the Bay area had the highest office vacancy rates at 22 percent, followed by the Ortigas-Mandaluyong-San Juan cluster at 17 percent.
Quezon City followed at 14 percent, while Alabang trailed closely at 11 percent.
Bonifacio Global City/Taguig has the lowest vacancy rate at 7 percent.INQ