Emerging manufacturing hub

CentralHub is a fully planned industrial warehouse complex that creates the perfect environment for industrial operators.

Industrial parks in Central Luzon are well positioned to become the country’s next manufacturing hubs.

Key to this, however, is the completion of new industrial spaces, public works and infrastructure projects that will make it more attractive for manufacturing companies to locate to this part of the country, according to the latest report from Colliers International Philippines.

Data from Colliers showed that currently, manufacturing facilities are concentrated mostly within Cavite, Laguna and Batangas. Industrial stock in this corridor is seen to grow to 148 ha from 2019 to 2021. Bulk of the supply will be in Batangas, which has cornered a huge chunk of the new manufacturing commitments over the next three years.

“We do not expect a significant increase in industrial space in the CALABA (Cavite-Laguna-Batangas) area over the next two to three years,” Colliers explained.

“Colliers believes that much of the new industrial supply will probably be developed in Northern and Central Luzon. The bulk of the space is planned to cater to light to medium industries such as consumer goods and packaging materials. Among the developers that are positioned to capture the thriving industrial opportunities in Pampanga and Tarlac are Ayala Land, Filinvest and Double Dragon which will likely deliver a combined 165 ha of new industrial space from 2019 to 2021,” it further explained.

Today, Central Luzon is attracting a number of light manufacturing firms, including food and beverage companies.

Colliers Philippines cited as an example Universal Robina Corp., one of the Philippines’ largest manufacturers of consumer goods, which is investing P1 billion for a new manufacturing plant in Pampanga. The facility will be used to manufacture soy beverages.

Gardenia Bakeries meanwhile is reportedly building a P2-billion bread plant also in Pampanga. Once completed, the facility would be the company’s second largest in the country, next to their plant in Laguna.

“Colliers encourages developers to maintain industrial space within their township projects in Pampanga and Tarlac to speed up the completion of necessary public works such as roads to capture the interest of manufacturers that are scouting for space outside the Cavite-Laguna-Batangas region,” Colliers explained.

“With more property developers heading North and Central Luzon, Colliers believes that firms with significant public infrastructure completed will likely have the first-mover advantage over other companies,” it said.

Colliers Philippines identified three projects that are expected to boost the feasibility and attractiveness of Central Luzon as a manufacturing hub.

One is the Clark Airport Expansion, which aims to raise capacity to 12 million passengers per year by 2020, from the current 4 million.

Another project is the Subic-Clark Cargo Railway, which seeks to connect the Subic Port and Clark International Airport, thus helping decongest the overstretched Manila Port once completed by 2022. This project is expected to boost Central Luzon’s stature as a key alternative to Southern Luzon.

The NLEX-SLEX Connector Road meanwhile aims to cut travel time between two major industrial hubs, Clark in Pampanga and Calamba in Laguna, from three hours to one hour and 40 minutes. This should benefit manufacturers with industrial facilities in both Central and Southern Luzon.

“Given the continuously increasing demand and lack of new industrial space, we encourage developers to explore partnering with local governments for the acquisition and eventual development of industrial space subject to the local governments’ land use plans and ordinances,” it added.