No slowdown in sight for POGOs as PH’s real estate market seen to expand in 2020
2019 was a successful year for the Real Estate Industry, and by all indications, 2020 should be another banner year as well.
According to The Lobien Realty Group (LRG), they expect the Philippine Real Estate Market to remain strong and continue its growth trajectory this year despite prevailing global issues. LRG has studied and analyzed the different Real Estate markets in the country and possesses a definite knowledge of the current states of these markets and a clear and significant understanding of the prevailing factors, dynamics, and issues that shape and influence these markets.
FROM L-R: Jianne Nicolasora, Marketing & Research Specialist, Jolly Villanueva, Marketing & Research Specialist, Jocelyn Sacro, Senior Manager, Finance and Admin Head, Issobelle Antonio, Asst. Manager, Jericho Linao, Chief Operating Officer, Sheila Lobien, Chief Executive Officer, Steph Ng, Associate Director, Enrico Isla, Manager, JM Figurasin, Manager, Dave Marfega, Marketing & Research Specialist
The Philippines’ Demography
The Philippines has a population of around 107 million highly literate and industrious people with an average age of 25 years. 61.4% of the Philippine population comprise the labor force and 95% of this young, energetic, tech-savvy, group of workers are currently employed. This demographic combined with government policies, programs, and projects that improve infrastructure, promote the ease of doing business, spur innovation, and encourage investment is largely responsible for the flourishing Philippine economy which features a GDP amounting to USD350B growing at a healthy rate of 6.0%.
POGOs and BPOs Account for Majority of the Office Property Market
Demand in The Office Market continues to be largely driven by POGOs and BPOs. Online Gaming/POGO companies occupy 36% while BPOs occupy 30% of the total office take-up in Metro Manila last year. LRG projects that office space demand by these companies will continue to increase in 2020. The Philippines’ IT-BPM industry is projected to have a potential for a 6% – 7% growth in the number of headcount from 2019 – 2022 because of sustained and improved privately initiated upskilling programs combined with government support through PEZA and infrastructure building. Flexible/serviced office spaces are getting popular and are expected to reach 10% growth year on year. The regional heavyweights outside NCR such as Cebu and Davao will continue to prosper and increase their economic activities and the Build Build Build program is expected to help regions outside Metro Manila to develop. As economic development increases throughout the country so does the need for office space. In 2019, 71% of the total office space supply of 1,034,825 sqm in Metro Manila was leased at an average cost of PHP 1160/sqm and only 4.05% vacancy was recorded for office spaces located within Metro Manila’s central business districts.