Manila’s real estate market is feeling the impact of recent headwinds faced by Philippine Offshore Gaming Operators (POGOs) with a significant fall in both residential and commercial tenancies in the three months to 30 September 2020.
According to a report by Bloomberg, brokers are blaming an exodus of Chinese POGO workers as a result of fewer POGO employment opportunities on declining tenancy rates, with Manila office space vacancy having risen from 5.4% at the start of the year to 7.3% in 3Q20. Real estate services firm KMC Savills said in a report that around 47,800 square meters of office space was vacated in the third quarter alone.
But the decline in POGOs is also impacting residential markets, with KMC Managing Director Michael McCullough telling Bloomberg, “We’ve seen entire residential towers emptied out.
“We’ll continue to see a lot more of that continuing to compound in the next six months,” he said.
KMC estimates that rents in Manila could fall by up to 10% by the end of the year and by up to 25% in areas with heightened exposure to POGO bases.
There are currently 33 POGOs, 111 service providers and four Special Class BPOs (business process outsourcing) currently approved to resume operations by PAGCOR from the 60 licensed POGOs and more than 200 service providers nationwide.