From Manila Bay to Makati to Alabang: Office rent to collapse by as much as 80% from total POGO pull-out – Leechiu

A leading real estate expert warned that a total pullout of Philippine Offshore Gaming Operators (POGOs) could trigger a collapse in rental rates.

Leechiu Property Consultants said office rental rates could drop from 55 percent to 80 percent if the Marcos administration decides to kick out the remaining legitimate POGOs in the country.

In a recent report, Leechiu said the Bay Area office towers would bear the brunt of the POGO full exit with rentals expected to plunge to as low as P300 per square meter from its peak of P1,500 per square meter in 2019.

Leechiu projected gloomy lease figures for other POGO centers in a post-POGO exit scenario:

* Makati rental down to P700 per sqm from P1,500 per sqm;

* Alabang down to P300 per sqm from P1,000 per sqm;

* Ortigas and Mandaluyong down to P300 per sqm from P900 per sqm.; and

* Cavite down to P250 per sqm from P700 per sqm.

POGOs have occupied a combined 1.7 million sqm of office space in 2019 but tightening regulations from China and Philippine authorities, plus the pandemic, have shrunk the industry footprint by nearly 40 percent to 1.05 sqm.

Some government officials, lawmakers and public interest groups have lobbied the government to kick out all POGOs in the country due to a wave of crimes perpetrated by a few rogue industry players.

The Department of Finance and Philippine Amusement and Gaming Corp. (Pagcor) have addressed the main public concerns on the rise of POGOs and influx of Chinese staff such as income tax payments, workers permit registration, higher franchise fees, and self-policing in the industry.

Pagcor has already cancelled the franchises of lawbreaking POGOs while the police have cracked down on the crimes these few bad apples have perpetrated.