Colliers Philippines believes that the development of other property hubs outside of Metro Manila is crucial in achieving inclusive growth.
In our view, this should be facilitated by an aggressive push to build infrastructure and decentralize, resulting in the spread of economic gains outside of the capital region. Attracting foreign investments plays an important role in ensuring that employment opportunities are generated in the countryside. But this can only be achieved if we have competitive cities and municipalities that will welcome more investments and ensure that local governments are open to business.
Over the past few years we have seen steady economic growth in key urban areas in Visayas and Mindanao including Cebu and Davao. In Luzon, we have seen the expansion of local businesses and influx of foreign investments in Pampanga and Bulacan. In Western Visayas, among the most competitive cities in terms of economic dynamism, infrastructure connectivity, manpower and governance are Bacolod and Iloilo.
As a result, national developers continue to acquire parcels of developable land in these key areas.
Rise of the North: Bulacan and Pampanga
Previously, I stressed that residential developers and investors are starting to notice the potential of Bulacan as the next major property investment destination.
This can be partly attributed to its proximity to Metro Manila (just 20 kilometers north of the capital region) and to the big-ticket infrastructure projects, such as MRT-7 and the New Manila International Airport, that are likely to redefine the Bulacan residential landscape.
Major property developers are now looking at parcels of land to acquire in Bulacan where they can develop massive integrated communities that will host offices, residential projects, malls and even institutional facilities including schools and hospitals.
Pampanga meanwhile has long been an ideal property investment destination outside of Metro Manila.
National and local developers are seen to continue capturing demand in Pampanga, whose attractiveness is being bolstered further by massive infrastructure projects, including Skyway 3 and the newly modernized Clark International Airport.
A tale of two cities: Bacolod and Iloilo
In Western Visayas, Bacolod and Iloilo are among the most competitive cities.
Last month, Colliers Philippines’ Research team visited Bacolod and Iloilo where we went around to check the progress of various township projects and occupancies of malls.
We also had the opportunity to speak with local investment and Information and Communications Technology (ICT) councils. We are currently drafting our reports and copies will be available in our website and social media platforms soon.
National property players have invested and developed major projects, including offices, condominiums and hotels, in Bacolod. Some of these developments are premium, to say the least, indicating national developers’ confidence in the city’s investors and end-users.
The condominium segment of the city is still in its early stages but we see both demand and supply expanding once various township projects by national players are completed. Demand for house and lot units (H&L) remains strong as it is buoyed by overseas Filipino workers (OFWs) as well as local and foreign investors.
Iloilo is an interesting case. It is one of the most competitive outsourcing destinations in the country.
Major BPO firms locate in the city due to its infrastructure and skilled manpower. In fact, the city is targeting higher-value knowledge process outsourcing (KPO) companies. Developers are building more offices to capture demand from expanding firms, including Metro Manila-based companies that plan to open offices in this city.
Davao: Key investment hub in Mindanao
Over the past few years, Davao has become the most attractive property investment hub in Mindanao.
Colliers Philippines believes that Davao City has become a preferred residential hub in Mindanao due to its competitiveness. In the 2019 Cities and Municipalities Competitiveness Index, Davao ranked as the third most competitive highly urbanized city.
Davao also remains as a viable outsourcing hub outside of Metro Manila due to its skilled manpower. This should be sustained by BPO firms’ commitments to expand operations in the city. National players have already established footprint in Davao and are likely to expand beyond 2022 as the country recovers from COVID-19.
Looking forward, we are likely to see the emergence of new property investment hubs across the Philippines. This should support the expansion plans of developers as well as the improving sentiment and appetite of investors and end-users.