Offshore gaming companies in the Philippines continue to contribute to the local property market, and adequate support should be provided to them, a leading real estate consultancy firm said.
In its third-quarter report on the property sector in Metro Manila, Colliers International Philippines revealed that offshore gaming firms occupied 280,000 square meters (3.01 million square feet) for transactions during the first three quarters of the year. According to the company, this constitutes 25% of all office property deals in Metro Manila during the period. Only the business processing outsourcing (BPO) sector at 26% had a greater share.
Two-thirds of these transactions were completed in the Bay Area central business district (CBD) made up of reclaimed land, Alabang in Muntinlupa City, and the Makati City CBD. “We see these locations becoming key hubs for offshore gaming operations over the next 12 months although we project other submarkets such as Quezon City and Ortigas fringe attracting offshore gaming companies in the next one to two years,” Colliers said.
It noted however that offshore gaming companies’ share among office transactions had shrunk from 35% in 2017, when BPO firms constituted 16% of transactions.
Colliers called on developers to “strike while the iron is hot” in providing for “the relentless expansion” of gaming firms. It pointed out that several buildings had to put up with delays in their applications for tax and nontax incentives from the Philippine Economic Zone Authority (PEZA).
“Colliers encourages developers to be more accommodating to these firms looking for additional office space in the country’s capital,” the firm said.
Among things developers could do, according to Colliers, was “provide flexible office floor cuts, implement creative leasing schemes, and offer non-[PEZA] proclaimed buildings to offshore gaming firms.”
Office vacancy in the Metro, it said, was at 4.8%, but this could go higher “as we see demand moving in step with supply.”
Prime and Grade A office space in the Makati CBD and Fort Bonifacio, Taguig areas were from PHP900 ($16.67) to PHP1,750 ($32.40) during the third quarter, 13%-19% higher year on year. Average rents for the Metro were projected to rise 9% a year from 2019 to 2021, “as we project a tight market during the period.”
This past year, Philippine authorities have taken measures to better monitor Philippine Offshore Gaming Operators (POGOs), which are registered with the Philippine Amusement and Gaming Corporation (PAGCOR). Just this week, the Department of Labor and Employment (DoLE) said it was creating a task force for the purpose of ensuring proper documentation of foreigners working in the gaming sector.
Last September, the Bureau of Internal Revenue (BIR) issued a circular directing POGOs to register with the tax agency.
The POGO program had been created in 2016 by PAGCOR, which estimates gaming revenue from these entities to double from last year’s P3.13 billion ($58.1 million) figure, with more firms being awarded the license.