Now that we’re on the brink of a new year with new fiscal opportunities, let’s look back on the year that was. How did commercial real estate perform at the close of 2019?
POGO: An Unexpected Setback
The commercial real estate industry of the Philippines has been heavily reliant on POGO firms, essentially putting a lot of its eggs into one basket. Since the first half of 2019, POGO firms have reliably consumed the vacancies in the commercial market, keeping prices stable — or increasing.
However, on December 8, 2019, Makati Mayor Abby Binay closed down 4 illegal POGO firms. Colliers and Rappler reported that 2 firms were fronts for prostitution rings, while the other 2 were used for unsanitary restaurant and catering companies.
Binay has temporarily placed a ban on issuing licenses and business permits to POGO firms seeking to enter Makati City. This was intended to sustain the city’s safety against crimes.
The Show Goes On
The crimes from illegal POGO firms have caused a backlash to POGO itself, but the firms rally quickly. There are many more cities and provinces around the country that would welcome the steady income and high rental prices of these foreign outfits.
That is why it is an opportunity for companies like Robinson Land, Double Dragon and JEG Development Corporation, as these companies are currently developing high-rise buildings in Quezon City and Cebu, as reported by JLL. JEG’s 22-story building located in One Acacia in Cebu is expected to be turned over by 2020.
India, on the other hand, triumphed this year-end as ANAROCK reported that its economy rocketed to $2.7 trillion considering that over 56% of its office spaces in its cities were occupied by foreign tech companies. It was expected that this economic bloom will remain consistent this coming 2020. Chances are, those foreign tech companies brought in the same economic boost that comes from foreign money — without the illegal crimes going in under the radar.
Will POGO firms continue the momentum in 2020, considering that its reputation has been damaged by the crimes of illegal POGO firms in Makati? Or will we follow the example of India and court foreign money that aren’t riddled with illegal activities?
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