POGOs leave 274,000 sqm of office space in 2024, says consulting firm

Philippine Offshore Gaming Operators (POGOs) left 274,000 square meters of office space this year, with the majority of the exits done in the last two months, following the ban ordered by President Ferdinand “Bongbong” Marcos Jr. in July.

Data released by Leechiu Property Consultants (LPC) on Tuesday showed there were a total of 690,000 square meters (sqm) of vacated office spaces so far this year, reflecting a 65% increase from the spaces.

“Prior to 2024, we weren’t expecting that much contraction to happen,” LPC commercial leasing director Mikko Baranda said in a press briefing in Makati City.

Marcos in his State of the Nation Address (SONA) in July, ordered the ban on all POGOs by the end of the year, citing the sector’s “grave abuse” and “disrespect” to the country’s system and laws.

The POGO sector accounted for 274,000 sqm of vacancies so far this year, after canceling 50,000 sqm and terminating 224,000 sqm of office space. This compares to the 35,000 sqm of office space vacated by the industry in 2023.

Most of the POGO’s vacated spaces are located in the Bay Area in Pasay City, which recorded a 23% vacancy rate. Barranda said this was being partly offset by the takeup from government agencies that are relocating and expanding their presence in the area.

The information technology-business process management (IT-BPM) sector also vacated 200,000 sqm of office space in 2024, mostly due to relocation and downsizing — 92,000 sqm due to relocation, 64,000 sqm due to downsizing, and 44,000 sqm due to consolidation.

The traditional office sector vacated 216,000 sqm of office space — 171,000 sqm due to relocation, 27,000 sqm due to downsizing, and 18,000 sqm due to consolidation.

This brought the country’s overall vacancy to 3.3 million sqm, which compares with demand of 1.1 million sqm, with the vacancy rate estimated at 18%. Demand from the government accounted for 122,000 sqm, the IT-BPM at 422,000 sqm, the traditional sector at 492,000, and POGOs at 76,000 sqm.

Moving forward, the LPC estimates live demand at 494,000 sqm. More than half or 51% of this is coming from the IT-BPM, and 49% from the traditional market.

“In 2025, we do believe that given all these contractions, we will need time to be able to fill this all up, so vacancy levels next year will continue to flutter in the same level and we will see that really take a turn in 2027,” Barrera said.

The majority of 63% of the live demand is coming from Metro Manila, with the remaining 37% in the provinces.

“Since 2021, demand has been steadily increasing, and vacancy rates have consistently declined. This trend suggests that the market is moving toward equilibrium, with a potential stabilization anticipated by 2027,” LPC said in a report. —NB, GMA Integrated News