BPOs, POGOs drive office demand up 34% in Jan-May despite quarantines

Demand for office space continued to grow in the first five months of the year despite the quarantines imposed to curb the spread of COVID-19, mainly driven by the business process outsourcing (BPO) and the Philippine Offshore Gaming Operators (POGO) sectors.

According to data released by Leechiu Property Consultants (LPC) on Tuesday, demand for office space grew 34% in January to May this year to 211,000 square meters. This is 54,000 square meters higher than the 157,000 square meters recorded before the quarantines were imposed.

The BPO sector accounted for the biggest share of demand with 37%, followed by POGOs with 13%, while the remaining 50% was shared by traditional offices, corporate tenants, and flexible workspaces.

"We expected zero demand in the second quarter of 2020 but despite the ECQ/MECQ, we've seen transactions concluded," said LPC chief executive officer David Leechiu.

Metro Manila, along with several high-risk areas, was under the enhanced community quarantine (ECQ) from March 17 to May 15, followed by the more relaxed modified enhanced community quarantine (MECQ) until May 31.

A general community quarantine (GCQ) has since been put in place from June 1 to 15, which has since been extended until June 30.

"Philippines is most likely the only office market in the world that is still growing in demand today," said Leechiu.

"We also expect IT-BPM demand to surge once more by year-end when both the Philippines, US, and other countries would have adopted to a new normal," he added.

For POGOs, Leechiu said expansion plans are likely to be seen once lockdowns are eased and travel is allowed, with Chinese firms likely to shift their customer service operations to the Philippines.

"As soon as travel restrictions are lifted, we are optimistic that POGOs will be back to full capacity, and will start revisiting their expansion plans," he said.

"They will do that by importing talent from China to operate from the Philippines following the POGO operating model," added Leechiu.

The government allowed POGOs to resume operations earlier than other businesses, even amid the strict quarantine protocols implemented due to the pandemic, provided that only 30% of the total workforce will be allowed to report to  work. --KBK, GMA News