Business process outsourcing companies are purchasing an increasing number of office spaces in the provinces, in line with the industry’s move to the countryside.

Online gaming firms, however, are growing in Metro Manila and are on course to match demand from the outsourcing sector and, according to David Leechiu, CEO of Leechiu Property Consultants.

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The online gaming industry now ranks second in Metro Manila when it comes to occupying office space. The BPO sector remains first – for now.

The online gaming industry accounts for 19% of the over 600,000 sq meters that either had been negotiated or leased as of August this year. Leased office space in the industry increased by 100% to 125,000 sq meters in this year’s third quarter, approximately 50% of the space that BPOs demanded.

The BPO sector has seen the opposite trend. Last year, it made up 65% of leased office space, at 409,500 sq meters. That figure fell to 41% of the leased office space for 2017, at 268,000 sq meters.

The consultants believe that the fall in investments in BPO was a result of domestic uncertainties.

Leechiu said that BPO had expressed concerns over terrorist attacks that have taken place in Palawan, as well as Mindanao Martial Law, and a number of incidents that have been seen in Nasugbu.

Leechiu wasn’t the first consultancy firm to acknowledge the significance of the online gaming sector’s office space demand in Manila.

In May of this year, Pronove Tai, the global property firm, observed that office space demand saw a dramatic increase after the Philippine Amusement and Gaming Corporation (PAGCOR) opted to issue licenses for Philippine Offshore Gambling Operators (POGO).

The consulting firm said that, due to the popularity of online gaming, every country, by and large, allows its citizens to enjoy gaming and betting activities online at home. However, the Philippines has taken this a step further and decided to legalize and license offshore gaming.

This new law, along with the increased take up of office space, is an indicator of the strong growth being shown in the sector. In recent years, we have seen such online gaming websites as become increasingly popular, with sign-up bonuses, including 1,000 free spins, and popular games, such as Legends of Africa and Pistoleras.

Leechiu said that the constant seeking to improve the bottom line through controlling capital expenditure is changing the shape of the office sector.

He said that it’s forcing BPOs to find alternative space away from Metro Manila, which only encourages online gaming companies to try the area. In turn, this pushes corporates looking for less restrictive lease terms towards flexible working space.

It has been predicted that annual take up for office space will increase by 19%, with online gaming compensating for the decreased BPO demand, added Leechiu.

Office space increased by 3.6% overall to 653,589 sq meters in August this year, compared to the 630,000 sq meters reported in 2016.

Looking to the future, Leechiu said that the country’s retail sector paints a very different picture to what is occurring in the U.S., where supply has seen a shortfall in demand and has resulted in falling numbers in shopping malls in the world’s largest economy.