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POGO exit’s impact on office vacancy ‘not sizable’

KATE SADE-UNSPLASH

THE exit of Philippine offshore gaming operators (POGOs) will contribute to the rise of vacancy rates, especially in offices outside economic zones, but not in a sizable amount, Jones Lang Lasalle (JLL) said.

“We might see some further elevation of vacancy in the market… Definitely the non-PEZA (Philippine Economic Zone Authority) vacancy will continue to rise, but I don’t think it’s going to be significant as much as what others are saying,” JLL Philippines Head of Research and Consultancy Janlo de los Reyes told reporters after a briefing on Wednesday.

“I think the impact will be there, but not as sizable. The reason being is that we have already seen the exit of different POGOs over the past two to three years,” he said.

According to Mr. De los Reyes, what remains of the POGOs are around 34 operators as of Oct. 6.

“So definitely there might be some impact still but not as sizable as I would like to think,” he added.

Mr. De los Reyes said POGOs could contribute to the property market if they remain, but this carries some risks for developers.

“There is merit in terms of them staying. I believe that they are there to support the office market,” he said. “And definitely there are risks attached to it also.”

“We’ve seen that risk in terms of property developers now or buildings that have been fully vacated but I think that is the risk some developers are willing to face again or willing to take again,” Mr. De los Reyes said.

In the third quarter, office vacancies were still at an elevated level of 17.3% but lower than the 17.5% vacancy in the same period last year.

Meanwhile, quarter on quarter, office vacancy also went down by 45.9 basis points from 17.8% by the end of June.

Mr. De los Reyes said that if POGOs will be allowed to remain in the country, the move “will pull down vacancy levels in the future.” — Justine Irish D. Tabile

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