Despite POGO Exodus, Office Space Demand Is on the Rise as Provincial BPOs Become Key Property Players

POGO demand has “all but disappeared” in 2020.

After a rough year for the entire real estate industry in 2020, it looks like commercial properties are bouncing back in the first quarter of 2021, according to the latest market report from Leechiu Property Consultants. Total office space demand is now at 109,000 square meters, which is up 22.5 percent from the fourth quarter of 2020 thanks to the recovering IT-BPM (Information Technology and Business Process Management) sector.

According to Leechiu, demand for POGOs (or Philippine Offshore Gaming Operators) has “all but disappeared” in 2020 as the pandemic, China’s clampdown, and high local taxes pushed POGOs to begin their mass exodus. Despite this, the IT-BPM sector made up for the loss, remaining a reliable player in local office space.

The Loss of POGOs and Rise of Provincial BPOs

The IT-BPM sector made up for 30 percent of total demand in the first quarter of 2021 and is now the single largest driver of office space in the country after POGO activity “flatlined,” as per Leechiu. Shortly after COVID-19 lockdown began in March, 2020, POGO demand for office space fell to zero, costing landlords heavily. POGOs made up the brunt of vacated office spaces in 2020, accounting for 47 percent of newly emptied office space and vacating a whopping total of 396,000 square meters of office space.

However, BPOs have proven reliable as it now accounts for 30 percent or 33,000 square meters of new office space in the first quarter of 2021. Demand from BPOs is increasing, and despite the pandemic, BPOs continue to grow their presence in the province. Provincial BPO spaces are now at their highest, taking up 43 percent of IT-BPM transactions in 2020. Office space demand is still highest in Makati, Ortigas, BGC, and the like, but Leechiu reports notable growth in Cebu, Clark, Davao, Rizal, and Bicol, with Iloilo currently being the biggest IT-BPM take-up at the moment.


Meanwhile, e-commerce has emerged as what Leechiu describes as a “sunshine industry,” becoming the second largest demand driver in the country, accounting for 19,000 square meters or 17 percent of demand in the first quarter of 2021. Other important players in commercial properties are banking and finance, services, FMCG, logistics, and even co-working. 

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Anri Ichimura
Section Editor, Esquire Philippines
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