CUSTODIO
Central Luzon (Region 3), Southern Tagalog (Region 4) and Central Visayas (Region 7) are seen to be the top three growth areas to watch out for in industrial developments.
CB Richard Ellis Philippines, during a Jan. 23 press briefing in Shangri-La Hotel in Makati, named the three regions as having the potential to accommodate heightened industrial development. In its industrial sector report, CBRE cited the three regions as the “top locations of upcoming industrial economic zones.”
Infrastructure such as road improvements are credited for driving the developments in these areas.
“In the long term, you can expect these areas to be more or less the key growth areas to watch out for,” said Jan Paul D. Custodio, CBRE senior director for research and consultancy.
Custodio explained, “Improved accessibility in Regions 3 and 4 is one of the keys of development, not only in terms of residential or commercial, but industrial as well.” For instance, he said, GGLC (Global Gateway Logistics City) is scheduled to start a major property project in the Clark Special Economic Zone in Pampanga. Ayala Land, he disclosed, had also acquired “substantial space” in Porac, Pampanga, near Clark. Laguna, for its part, has Nuvali and its industrial parks. He added the potential for growth have been highest for those in close proximity to Metro Manila.
Road network
Aside from the development of an international airport (Diosdado Macapagal International Airport) and the improvement of its seaports, Region 3’s road network has substantially improved, with the modernization of the North Luzon Expressway (NLEx), the addition of the Subic-Clark-Tarlac Expressway and the continuing expansion of the Tarlac-Pangasinan-La Union Expressway.
On Jan. 23, work on NLEx-SLEx (South Luzon Expressway) connector road commenced. This connector road will eventually bridge Regions 3 and 4, with the NCR right at the center.
Custodiuo said: “The infrastructure developments have been concentrated in Luzon. There’s also the CaraEx (Cavite-Laguna Expressway), connecting SLEx with Daang Hari in Cavite province.” The proposed expansion of the Light Railway Transit (LRT), if it pushes through, would also add to Region 4’s growth potential.
He said: “The big players are in strategic mode trying to take up space in areas where future developments will eventually lead to. (They’re) planning ahead, actually.”
Custodio stressed that commercial and industrial developments usually follow large residential populations. He cited as an example San Jose del Monte in Bulacan, which has a large residential population. “Now you see big players moving in: Ayala, SM and Robinsons are moving in in that area.”
Custodio observed: “Industrial centers are in Cebu mainly because it’s a natural port. In fact, Cebu is reclaiming additional land just to expand the land area within the city itself, probably in Mandaue or Cebu.”
He named Cebu as the next most “bustling” area outside of Metro Manila. Region 7, in general, has been hosting numerous commercial, residential, retail and industrial developments.
Coming up in Cebu
“A lot of buildings are coming up in Cebu, and you also see the expansion of malls. SM is opening a new mall in the reclaimed area. It’s basically like what is happening in Metro Manila,” he said.
CBRE reported to the media that “apart from (Manila) offering one of the lowest land values for industrial properties, the international investment community has shown renewed interest in the country following the investment grade ratings achieved during the year.”
The manufacturing sector will continue to gain renewed interest from Northeast Asian firms, as the country has had the most cost-effective land value for industrial properties at $8.66/square meters compared to traditional hubs Bangkok ($13.38/sq m) and Beijing ($29.12/sq m). Moreover, long-standing territorial disputes in Northeast Asia, flooding and political instability in Thailand, and multiple credit rating upgrades for the Philippines has provided more opportunities for the country’s manufacturing sector to expand.
“The logistics and manufacturing sector will continue to pick up the pace in 2014, as more Northeast Asian countries such as Japan and South Korea consider to relocate due to long-standing territorial disputes with neighboring countries,” said Rick Santos, CBRE chair and founder.