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For years, the biggest demand of the Philippine office market comes from the Business Process Outsourcing sector. However, at the onset of 2017, the offshore gaming sector has recovered and shown potential to become a significant driver of office demand. All thanks to the Philippine Amusement and Gaming Corporation (PAGCOR) for allowing the resumption of licensing for online/offshore gaming firms in the country.
In hopes of keeping the momentum, offshore gaming is continually cementing their path in becoming one of the major market drivers in the Philippines. In the first half alone, PAGCOR registered 3 billion in tax revenue from said offshore gaming firms. Despite the Philippine Economic Zoning Authority's refusal to accredit, offshore gaming remains to be a lucrative industry due to its ability to cover multiple business fronts. It can cater to almost any game in a casino or sporting events, fantasy sports and even reality shows. Data shows that casinos that employed online gaming services logged a 110 percent increase in revenue.
As more and more people venture into the industry, the off-shore gaming firms eventually became the occupants of various office submarkets specifically in the Bay area - a viable location to take considering its proximity to the biggest casinos in the Philippines. The offshore gaming industry just took over a substantial amount of pre-committed office spaces in the country.
Regardless of the new 700,000 office space completion by the end of 2017, the office space supply in Metro Manila continues to dwindle down. In the past year alone, Filinvest Cyberzone Tower 2 & 3 in the Bay area were leased out by these online gaming firms. These firms are also quickly expanding at locations in the Visayas. Cebu is benefitting the most by receiving some of the spillover demand. One example is Mactan's Tower One Plaza Magellan that is now fully pre-leased by the same sector.
This astounding feat made it the second largest demand in the office markets. The huge potential of these gaming firms to drive rental rates are now recognized. However, for the second quarter, reports said that Metro Manila rents remain affordable. In the Bay area where most online gaming firms are housed, the average net rental rate is at 712.8 pesos per square meter monthly. This is lower compared to Makati and BGC rate of 1,038.1 and 912.3 pesos, respectively.
It is a consensus among experts that PH is one of the best places to invest in now. PAGCOR Chief Andrea Bautista also thinks that the changes introduced by the new administration and the Filipino hospitality also plays a big role in this remarkable market take-off.