Unraveling Bacolod’s potential
Bacolod remains one of the most competitive cities in the Philippines. It is part of Western Visayas, which is also one of the fastest growing regions in the country.
More than just a major source of Filipinos being deployed abroad, the City of Smiles is also an attractive location for IT and business process management (IT-BPM) firms due to the availability of skilled manpower and the quality of its infrastructure network. The local government has also been supportive in spurring the growth of the city’s IT-BPM sector.
This has been compelling national developers to expand their footprint in the city by putting up more expansive office and residential towers.
Colliers believes that rising purchasing power will further lift residential demand in Bacolod and this should entice more national and homegrown property firms to develop even more integrated communities in the city. With postpandemic recovery on the horizon, Colliers is optimistic that more projects have been lined up to capture interest from both investors and end-users.
Viability of mid-income to upscale projects
Colliers encourages developers to carefully monitor attractive price segments in the pre-selling market. In our view, developers should be proactive in assessing the viability of launching more mid-income (P3.2 million to P6 million) to upscale condominium projects (P6 million to P8 million), especially with the entry of national players.
In our view, developers are likely to further test higher-income segments over the next 12 to 24 months. Colliers projects a bigger share of upscale, luxury and ultra luxury projects to total condominium launches and take up over the near to medium term.
Alternative options for house-and-lot developments
While Bacolod City remains the primary site for residential development, Colliers encourages developers to explore alternative sites around the fringes of Bacolod including Talisay and Silay. In H1 2022, these areas accounted for 35 percent of total take-up of horizontal units (house-and-lot, and lot-only) in Negros Occidental.
Demand holds firm
For Bacolod’s horizontal market, we recorded about 506 house-and-lot (H&L) units sold in H1 2022. Affordable to mid-income projects (P1.7 million to P6 million) accounted for 47 percent of total take-up during the period.
Colliers believes that demand for these developments should be sustained by the inflow of more remittances from overseas Filipino workers. In 2020, about 93,000 or 5 percent of the total deployed OFWs came from Central Visayas. In our view, end-use demand for horizontal units will partly be driven by the OFWs’ families residing in Bacolod.
Colliers further believes that residential demand will also be supported by the development of integrated communities in the city.
As my colleague from Advisory Services, Karla Domingo, stressed, “dominance over the Bacolod City residential market is up for grabs. Local and national developers alike should look at pump-priming their respective developments to generate activity and interest in their masterplanned communities. The developer which establishes its location as the new city center will have a great advantage moving forward.”
With increasing presence in Bacolod, developers should explore how they can further differentiate projects. This is very important especially in capturing demand from a discerning market with constantly evolving preferences.
My colleague from Office Services-Tenant Representation, Kevin Jara, noted that “home to several of the country’s top call centers and outsourcing locators, Bacolod features the second largest city population in the Visayas and diversified economic growth drivers. The vibrant economy of this highly urbanized and competitive city will continue to generate more investments from real estate developers and occupiers alike, creating more opportunities for livelihood for its constituents.”
Our office leasing team is also optimistic about the potential growth of Bacolod’s IT-BPM sector. With its improving competitiveness, it is no longer startling to see Bacolod being on the radar of large, multinational BPO firms.
Bacolod definitely has tremendous potential in terms of property development. More discerning investors and end-users are now putting a premium on convenience and connectivity, features that masterplanned communities provide.
Colliers Philippines has seen national developers aggressively acquiring parcels of developable land in the city and we see this persisting over the near to medium term. Exciting times ahead for Bacolod property, with developers actively unlocking its potential.
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