POGOs dislodges BPOs as top driver for office demand – LPC

MANILA, Philippines — The Philippine offshore gaming industry overtook the business process outsourcing (BPO) sector in terms of demand for office space in the first nine months, according to real estate services firm Leechiu Property Consultants (LPC).

In its latest Real Estate Market Insights report, LPC said Philippine offshore gaming operators (POGOs) accounted for 386,000 square meters (sq.m.), or 34 percent of the 1.14 million sq.m. total office take-up from January to September.

On the other hand, LPC said the information technology - business process management (IT-BPM) sector accounted for 355,000 sq.m. or 31 percent of the total office demand.

In Metro Manila, LPC said POGO take-up reached 375,000 sq.m., accounting for 38 percent of the 990,000 sq.m. total office demand in the region, while the IT-BPM sector occupied 294,000 sq.m.

LPC chief executive officer David Leechiu said this is the first time the POGO industry has surpassed the BPO sector as the top driver for office demand in the country.

“I think, at the rate they’re going, they will be the largest taker of office space in the country within this year,” Leechiu said during a press briefing.

According to Leechiu, the office take-up from the POGO industry boomed in the past three weeks, following Cambodia’s announcement that it would ban online gaming in the country.

“The POGO sector has gone ballistic since two weeks ago when the online gaming industry in Cambodia was exiting and halfway through the trip of the President in China, the POGO industry started to aggressively take space,” he said.

“So we reckon that in the last three weeks, they have taken a total of 200,000 of office space throughout Metro Manila,” he said, noting that this space is comprised of both pre-commitments and space already present in the market.

While expressing concern that the same ban may happen in the Philippines amid pressure from China, Leechiu is confident that the office space that may be left behind would be absorbed by other industries, particularly the BPO sector.

“What does give me comfort is that 70 percent of the POGO footprint in the Philippines is in four geopraphies – the Bay City, Makati, Alabang and Ortigas – so if they disappear today, the BPO sector will just backfill that requirement,” he said.

By the end of the year, Leechiu said office demand may reach up to 1.5 million sq. m., of which 1.2 million would be in Metro Manila.

He said office take-up from the POGO industry in Metro Manila is estimated to reach up to 450,000 sq. m., while the BPO sector may absorb 350,000 to 400,000 sq. m.