BPOs still driving office demand, POGOs to resurge early next year — study

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(FILE PHOTO)

Metro Manila (CNN Philippines, October 21) — The country’s property sector is well on its way to recovery amid the COVID-19 pandemic with business process outsourcing (BPO) firms leading the charge, according to the latest Leechiu Property Consultants study.

The real estate brokerage firm on Thursday reported 383,000 square meters (sq.m.) of office space has been occupied as of end-September, even with demand slightly easing in the third quarter with the surge in COVID-19 infections and return of strict lockdowns.

Office demand during the nine-month period was already about 98% of full-year occupancy in 2020, which stood at 389,000 sq.m., said LPC.

The information technology and business process management (IT-BPM) industry comprised 169,000 sq.m. of occupied space within the said timeframe, or approximately 44%. Of the figure, 289,000 sq.m. is situated in the capital region while the remaining 94,000 sq.m. is located in the provinces.

The firm noted that Iloilo outpaced key hubs Clark, Laguna and Davao in office space occupancy, registering 37,000 sq.m. of the total provincial office space.

It projects overall office demand this 2021 to reach a range of 450,000 sq.m. to 500,000 sq.m. — likewise driven by BPOs.

Meanwhile, demand from Philippine offshore gaming operators (POGOs), previously touted as among the property sector’s drivers, has still “flatlined” for the period. The business districts of Ortigas, Quezon City, and the Bay Area were impacted with their departure from these locations, noted LPC director Mikko Baranda.

However, LPC projects a return to growth for the industry by the second quarter of 2022.

The consultancy firm cited the passage of a law regulating taxation of POGOs along with the gradual easing of travel restrictions as factors for the firms to start opening their offices again early next year. 

“While the recovery has not been as fast as earlier predicted, the worst appears to be behind us. We also note that government reforms have buoyed the industry,” said LPC chief executive officer David Leechiu, citing the current administration’s tax reform efforts, new infrastructure projects, and amendment of the REIT law as examples.