POGOs account for 31% of vacated office spaces in the Philippines, contributing to Metro Manila's 19.9% vacancy rate.
A recent study by CBRE reveals that Philippine Offshore Gaming Operators (POGOs) account for 31% of vacated office spaces in the Philippines, contributing to Metro Manila's rising office vacancy rate. According to CBRE's Real Estate Market Monitor, the overall vacancy rate has reached 19.9% in 2024, representing nearly 1.8 million square meters of available office space.
While POGOs represent a significant portion of vacated spaces, they are not the sole contributor. The study indicates that the IT-BPM sector accounts for an even larger share, at 32%. This suggests that downsizing and relocation within the IT-BPM industry are also key factors driving the increased vacancy.
CBRE Philippines Country Head Jie Espinosa clarified that the IT-BPM sector's contribution is primarily due to companies downsizing or relocating to meet client preferences or secure smaller spaces, rather than leaving the country altogether.
Despite the high vacancy rate, rental fees have not significantly decreased. Instead, building management companies are offering incentives like rent-free periods and other benefits to attract tenants.
CBRE remains optimistic that the vacancy rate will decrease by the end of the year. The firm attributes part of last year's slowdown to the US elections, which caused delays in decision-making for many US companies with operations in the Philippines. With the elections concluded, CBRE has observed increased inquiries and demand, particularly from the US healthcare sector, as well as banking, financial services, and insurance companies.
While CBRE previously forecasted a single-digit vacancy rate by 2027, Espinosa acknowledged that current external factors make this more difficult to predict. The firm is also monitoring how US policy changes might affect American businesses operating in the Philippines.
Read related article: Landlords Warned Over Rentals To Now-Illegal POGOs
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