This week, Colliers Research provides insights on a recently sealed transaction between Eton Properties and a POGO firm, prompting the former to state that the office market is starting to normalize with the increase demand from occupiers, particularly from offshore gaming companies. In addition, Japanese electronic equipment manufacturer Yokowo Co. Ltd has recently opened a 3.7-hectare factory in Hermosa Ecozone Industrial Park in Bataan, which is expected to hire around 800 employees.
Tan-led firm expects leasing recovery on re-emerging POGO
Lucio Tan’s Eton Properties reported a recovery in office leasing activities with the re-emergence of Philippine Offshore Gaming Operators (POGOs). It recently sealed a deal with a top POGO company to occupy two floors covering 6,000 square meters (64,600 square feet) of office space in Eton WestEnd Square in the Makati Fringe. In August, a triple A construction firm also occupied space for a three-year lease in Blakes Tower.
As of the end of Q2 2022, POGO occupied space in Metro Manila reached 677,000 square meters (7.3 million square feet), down from the record-high of about 1.3 million square meters (14 million square feet) in Q1 2020. In 2021, Colliers only recorded 4,900 square meters (52,700 square feet) of office space deals from POGOs, far from the annual average of 400,000 square meters (4.3 million square feet) from 2017 to 2019. Meanwhile, in H1 2022, we have observed increasing inquiries from offshore gaming companies as we recorded 25,000 square meters (269,000 square feet) of office deals. However, we have yet to see substantial deals from POGOs that dominated the market pre-Covid-19.
Philippine unit of Japan’s Yokowo invests in Bataan factory
The local unit of Japan-based electronic equipment manufacturing firm Yokowo Co. Ltd has expanded in the 162-hectare (400-acre) Hermosa Ecozone Industrial Park in Bataan. Yokowo’s 3.7-hectare (9.1-acre) factory is expected to hire around 800 employees. Hermosa Ecozone is operated by Science Park of the Philippines Inc. (SPPI), which also manages industrial parks in Laguna, Batangas, and Cebu. In April, SPPI disclosed that YCO Global Cloud Centers will be building a 10,000-square-meter (107,600 square feet) data center facility in its Light Industry and Science Park 4 in Malvar, Batangas. SPPI currently hosts locators from Japan, Taiwan, South Korea, United States, Australia, and Europe.
Central Luzon is gradually becoming a preferred industrial hub in the country given its fast regional growth making it a viable consumer base for manufactured goods. Colliers sees opportunities in provinces including Bataan with its existing industrial parks such as Hermosa Ecozone, Bataan Freeport Area, and the upcoming Bataan Harbor City. Colliers recommends that industrial park developers strengthen their footprint in Central Luzon with the potential expansion of more industrial locators in the country. According to the Department of Trade and Industry, the Philippines can expect about PHP500 billion (USD9.1 billion) worth of investment pledges in the next 12 to 18 months from the manufacturing, logistics, and data center industries.