By: Business World
Real estate consultancy services firm Colliers International Philippines said travel restrictions on China due to the novel coronavirus may lead to a shrinking of the Philippine Offshore Gaming Operators (POGOs) sector and a resultant increase in vacancy rates, especially in the Bay Area.
The Philippine government has imposed a temporary travel ban on flights to and from China, Macau, and Hong Kong since Sunday. Local airlines have suspended flights in these territories.
Data from Colliers said POGOS took up 333,000 square meters (sq.m.) of office space in Metro Manila in 2019, translating to a vacancy rate of 4.3%. With the blanket travel ban on flights to and from China, the firm projected that the vacancy rate in the metro this year may shoot up to 5.3%, with POGO take-up at 300,000 sq.m. This will tick higher to 6% if POGO take-up falls to 200,000 sq.m., to 6.8% if take-up is at 100,000 sq.m., and to 7.6% if POGOs take no space at all.
Colliers added the retail segment may also be affected, as most Chinese nationals living in the Philippines are luxury shoppers, saying anecdotal evidence from the high-end ones say it’s mostly a Chinese clientele for them.
Despite these challenges, Colliers believes the real estate sector may still enjoy several growth drivers this year: continuous demand for space from outsourcing and traditional sectors for the office segment; more launches in the fringes for the residential segment; the redevelopment of food courts for the retail segment; a record supply of 2,800 rooms for the hotel segment; and the growth of consumer spending for the industrial segment.
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