POGOs began to downsize after the President’s State of the Nation Address last July, showing no signs of contraction in the previous quarter, said Mikko Barranda, director for corporate leasing at Leechiu Property Consultants.
“In Q3, about 50,000 sqm were vacated by the POGO industry,” Barranda said during LPC’s third quarter briefing on Tuesday.
During his State of the Nation Address last July, the President ordered the winding down of all POGO operations by the end of 2024.
This contributed to an increase in office leasing contractions to 378,000 square meters during the third quarter, up from 311,000 in the same period last year.
POGOs exposure down from 2019
Barranda estimates the legal POGO sector now takes up about 500,000 sqm of space.
This is down from its peak of about 1.7 million sqm before the COVID-19 pandemic.
Newer buildings, business expansion
But LPC noted that the bulk of the contraction was driven by tenants relocating to newer buildings or taking up larger spaces in other locations.
This differs from the same period in 2023, where contractions were driven mainly by tenants downsizing or terminating their leases.
Net demand increased
Overall net demand increased by 5 percent from the first quarter to the third quarter compared to last year. Cumulative demand now stands at 3.88 million square meters, while total contractions have reached 2.36 million square meters.
According to Barranda, Makati and Bonifacio Global City command higher rents compared to other districts. Rental rates overall have remained flat due to vacancy rates.
Miguel R. Camus has been a reporter covering various domestic business topics since 2009.
