Online gaming firms compete for tight supply of office space

The demand for office space by online gaming firms will rise by 50 percent this year, almost on a par with the business process outsourcing (BPO) sector, according to Leechiu Property Consultants (LPC).

"The amount of space we anticipate them to take this year will be anywhere from 50 percent to almost equal that of the BPO sector, that's how big the potential could be," LPC CEO David Leechiu said in a media briefing in Makati City on Tuesday.

"For the last 15 years, the BPO sector had the office market all to itself. Now, they have somebody also chasing space – that's the online gaming market. And they did this practically overnight ... This online gaming market could consume 400,000 square meters to 500,000 sqm of office spaces," Leechiu added.

Of the 477,928 sqm of office space pre-committed and under negotiation this year, almost 40 percent of the demand was from the BPO sector, "but the big surprise for all of us is the online gaming market," Leechiu noted.

The online gaming sector accounted for 17 percent of the pre-committed office space this year. "They went from zero to – now – the second largest demand driver for office space," Leechiu said.

The demand from the online gaming sector was primarily driven by the government's policy shift to offshore gaming, particularly after the Philippine Amusement and Gaming Corp. (PAGCOR) decided not to renew the licensing contract with PhilWeb Corp. on e-games and e-bingo networks.

President Rodrigo Duterte earlier ordered the gaming regulator to stop the proliferation of online gambling that caters to local players.

As of late-December, PAGCOR issued 35 new licenses for Philippine Offshore Gaming Operators (POGO).

In September 2016, PAGCOR introduced POGO to offset foregone revenues from e-bingo and e-games. 

"Each could take-up 10,000 to 20,000 sqm of office space this year," Leechiu noted.

The online gaming sector took up 83,960 sqm of the total office space transactions in the last six months, of which 42 percent were contracted in the Bay Area, west of Roxas Boulevard, he said. — VDS, GMA News