POGOs to boost office space rentals in 2020 despite Makati ban

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Offshore gaming firms will continue to drive demand for office space despite a ban on new players in Makati City, Colliers International Philippines says, as they now look to do business in other locations.

Metro Manila (CNN Philippines, December 13) — Philippine offshore gaming (POGO) firms would drive up the demand for office space, despite a ban on new players in Makati City, Colliers International Philippines said.

Colliers Senior Research Manager Joey Roi Bondoc said online gaming firms catering to foreign gamblers will continue to drive leases even in other cities, as they look to do business in other locations.

"We're optimistic for the next 12 months because Makati is not the only city in Metro Manila that's accommodating POGOs," Bondoc told CNN Philippines' Business Roundup, noting alternatives like Quezon City and the Ortigas business district bordering Pasig and Mandaluyong.

"You have these cities which are willing to accommodate and welcome these POGOs because they really take up a lot of office space. Not just office space, they need complementing residential condominiums. It's really driving the demand for both office and residential condos in Metro Manila," he added.

POGOs have edged out business process outsourcing (BPO) companies as the top takers of commercial space this year. Another real estate firm Leechiu Property Consultants said POGOs have granted bigger salaries than call centers.

READ: POGOs now occupy a tenth of office spaces in Metro Manila

On Sunday, Makati Mayor Abigail Binay announced that her city will stop granting business permits to new POGO players looking to set up shop there, citing rising crimes among foreign employees as well as higher leasing fees.

The Bureau of Internal Revenue (BIR) has shuttered three POGO service providers in recent weeks, following the order of Finance Secretary Carlos Dominguez III to crack down on companies who have not paid taxes. These offices got to return to business after proposing a tax settlement with authorities.

As for property prices, Bondoc said there's still "tremendous potential" for costs to rise, especially near the Bay area which has become the casino hub in Metro Manila.

Bondoc said the real estate sector would keep growing next year, given a "wide range of demand drivers" such as POGOs, BPOs, government offices, and even flexible co-working spaces.