Developers keen on intensifying projects in rural-urban fringes

In its 2016 forecast, property portal Lamudi Philippines explained that as a direct effect of tight supply of land in Metro Manila, rural-urban fringe areas (more known as the “outskirts”) are being explored by more developers for mixed-use projects.

Property experts have also predicted more townships sprouting across the country. Colliers International Philippines said that despite a slowdown in the residential condominium market in Metro Manila, developers will continue to pursue township developments in and outside of the capital. It added, however, that township developments would remain as “glorified office parks with condos for the upper classes,” unless they provide affordable housing options.

According to Colliers, development progress here would be slow, unless decent jobs are created. Exploring affordable housing and apartment leasing business models would be essential, as it will attract highly skilled labor from established metropolitan areas to move to their developments and sustain their office projects.

Popular

One popular urban-rural fringe area is Calabarzon —comprising the provinces of Cavite, Laguna, Batangas, Rizal and Quezon. It boasts the country’s second largest gross regional product at P1.644 trillion and a buoyant real estate market. Lamudi Philippines’ report indicated that Calabarzon is the Philippines’ second most economically important region after Metro Manila.

Enrique M. Soriano III, Ateneo program director for real estate and senior adviser for Wong+Bernstein Business, said about Calabarzon: “There is so much optimism as major property developers like Ayala and Megaworld have been investing heavily and creating portfolio growth forecasts well beyond a 20-year cycle. Last year, a joint venture was entered into by and among leading conglomerates Ayala Land Inc. (ALI), SM Prime Holdings Inc., Megaworld Corp. and Aboitiz Equity Ventures Inc. They have joined forces to develop the P123.8-billion Laguna Lakeshore Expressway Dike.”

Soriano revealed that ALI is also investing P170 billion to develop a 700-hectare mixed-use estate in Cavite similar to other Ayala projects in Makati, Bonifacio Global City and Nuvali.

Soriano said, “Accounting for 20 percent of ALI’s revenues since 2009 and 15 percent of the parent firm’s net asset value, Nuvali is building up its leasing assets, focusing primarily on office spaces worth P12.5 billion, doubling its size from 31,000 to 60,000 sqm as part of its five-year plan.”

Biggest horizontal project

He added that Megaworld is also steadily drumbeating its biggest horizontal project to date, the 1,000-plus-hectare mixed use Twin Peaks project in the Tagaytay-Batangas corridor with the first-of-its-kind vineyard concept.

“While it is inevitable that inventories will soften in the traditional CBDs in Makati, BGC and Ortigas, the southern corridor will dramatically be the next crown jewel in the next 10 to 20 years,” Soriano said.

The Lamudi report said: “The provinces of Laguna, Cavite and Rizal are close to Metro Manila and for this reason, they are popular areas to buy a home for the capital’s millions of workers. For instance, the cities of Bacoor and Dasmariñas in Cavite, San Pedro and Santa Rosa in Laguna, and Taytay, Cainta and Antipolo in Rizal are home to numerous residential subdivisions that offer houses from as low as P1 million in Cainta to as high as P35 million at Ayala Southvale in Bacoor.”

It added: “However, the region also boasts a buoyant leisure real estate market, especially Tagaytay City in Cavite and the towns of Nasugbu and Calatagan in Batangas. Vacation homes, condos and beachfront houses within master-planned communities are quite common in these areas, such as Playa Calatagan, Pico de Loro, Twin Lakes and Tagaytay Highlands.”

Colliers International’s Philippines Research and Forecast Report in the fourth quarter of 2015 indicated that new manufacturing zones registered with the Philippine Economic Zone Authority barely changed during the second half of 2015, growing only by

0.43 percent in stock, with only two new ecozones registered in Cavite and Batangas. The increase in stock resulted in a slight increase in vacancy to 10.9 percent in the areas of Laguna, Batangas and Cavite. Nevertheless, the revival of the industrial sector continues with land leasehold rates increasing by almost 8 percent during the quarter.