Over the past 24 months, Colliers has observed strong take-up in peripheral areas of major central business districts (CBDs), including Makati.
The dearth of developable land in major business districts in Metro Manila has resulted in more aggressive residential development in peripheral areas. The development of masterplanned communities, complemented by the completion of road projects, raised the attractiveness of condominium projects in fringe areas.
Over the past 24 months, Colliers has observed strong take-up in peripheral areas of major central business districts (CBDs), including Makati, indicative of the growing appetite for condominium units in alternative locations.
Colliers recommends that developers continue acquiring developable parcels of land in the peripheries of central business hubs. We recommend property firms to tailor their landbanking and development strategies to take advantage of the completion of new railways, subways and expressways over the next 12 to 36 months.
Colliers Philippines believes that these features should raise land and capital values in Metro Manila fringes beyond 2022. Colliers is also optimistic that this should entice more investors and end-users to choose these peripheral areas.
Highlight features of projects in the fringes
The lack of developable land and soaring prices in central business districts (CBD) are driving more investors and end-users to consider condominium units on the CBD fringe. To capture demand, we encourage developers to highlight the overall viability of the living experience in their projects. Developers should highlight their projects’ quality of life, landscape features, retail options and accessibility.
Explore fringe areas for new residential projects
Over the past few years, the need to develop additional projects has compelled developers to consider land in fringe areas.
Colliers encourages developers to continually look for fringe areas ripe for new construction due to the availability of land or redevelopable facilities, including those previously used for industrial purposes.
Residential demand compelled developers to look for land in non-core locations, and, as a result, other business hubs in the country’s capital region emerged. Fringe areas such as the one in Makati have become the newest battlefields for residential projects over the past few years.
Colliers believes that the viability of Metro Manila fringe areas for residential investments will partly hinge on the implementation of big-ticket infrastructure projects, which are crucial in driving demand for and raising the viability of thriving communities.
Infrastructure projects to support demand
At Colliers, we have been highlighting the importance of public projects such as roads, subways and railways in raising land and property values across the country.
Among the public projects likely to support demand is the Metro Manila subway due to be completed in 2026. In Makati, the proposed subway should spur interest for properties not just in CBDs but also in emerging, fringe locations within the city. The Makati subway is one of the most interesting projects in Metro Manila and should provide impetus for developers to line up more projects outside of the established Makati CBD.
Colliers Philippines is optimistic that the completion of infrastructure projects over the next three to six years will be crucial in reviving condominium demand post-COVID-19. In our view, these projects will be particularly important in raising residential take up outside of core locations. This should result in further diversification of residential projects within Metro Manila which should eventually redound to the investing public.
Colliers Philippines believes that Makati and its fringes will remain an attractive location for residential investments. Several condominium developers are gravitating towards the fringes as alternative locations for condominium developments.
In our view, the resilience of the office market is likely to support the area’s attractiveness for residential developments. We see fringe areas playing a crucial role in the rebound of the property market beyond 2022.
Overall, Colliers recommends that developers be on the look out for parcels of developable land in key peripheral areas in Metro Manila, including Makati. Investors and end-users should also keep an eye on these interesting projects which should further stoke residential demand over the near to medium term. Exciting times for the fringes, indeed.