Technoparks to Drive Commercial Property Growth
Property seekers turn to spaces within the periphery of the metro as the country develops more information technology parks and centers outside highly urbanized cities, and accessibility to these areas improves.
In its latest trend report titled What’s Next? A Forecast on PH’s Residential and Commercial Real Estate in 2021, Lamudi expects provincial cities near metropolitan areas to continue attracting demand given its consistent growth in 2020.
Data showed that growth in leads for cities with technoparks–Biñan, Santa Rosa, and Silang–went up by 16.7%, 41.50%, and 57.29% respectively in the second half of 2020 from the first half of the year. Biñan and Santa Rosa are located near the Laguna Technopark, an economic zone (ecozone) with 241-locator companies, whereas Silang is home to the Sterling Technopark, an industrial park with 21 operating establishments. The uptick signaled an increase in potential property buyers and renewed demand following the onset of the pandemic.
The growth, as reported by Lamudi, may also be in part due to an expanding logistics sector and the new developments improving mobility between these cities and the metro.
E-commerce driving the need for more industrial spaces
The coronavirus 2019 (COVID-19) pandemic spurred the urgency for businesses to adapt to providing online services, and accelerated consumer trust in making online transactions. As consumer shopping preferences shifted and lockdown restrictions kept people safe at home, more companies have innovated and adapted to emerging necessities.
The popularity of e-commerce businesses soared in 2020 as consumers turned to home-delivery and virtual service options for their food, retail, wellness, banking, and real estate needs. In an article published by ABS-CBN in January 2021, fintech firm GCash reported a 354% year-on-year growth in transactions. Online shopping platform Lazada Philippines reported to ABS-CBN that their daily sales doubled in 2020. During the pandemic, Lazada also launched new services such as Lazada Fresh and Lazada Med to provide consumers fresh food items and health products.
As consumers continue to adopt a “from-home” lifestyle, more retailers and other enterprises are seen to collaborate with logistics service providers. The impact of logistics, cold-chain storage, and warehousing services grew in significance as e-commerce activities surged.
The Cavite, Laguna, and Batangas (CALABA) corridor continues to be a popular investment destination for companies involved in logistics and warehousing, being home to over 35 manufacturing ecozones and with the Philippine Economic Zone Authority promoting the creation of more. Cavite alone has over 805 operating industrial establishments and is expected to attract more business owners to the city in 2021. Silang, Cavite is projected to experience a 40.17% hike in pageviews for commercial properties between the first and second half of 2021, Lamudi reported.
Infrastructure projects to further unlock land values
While seekers of commercial properties in these provincial cities enjoy a more favorable price per square meter compared to central business districts, the growing popularity of real estate in CALABA and other parts of Southern Luzon may lead to increased residential and commercial values.
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There are several ongoing infrastructure projects aimed at easing congestion from the metro and facilitating more access and investment in the countryside. The Cavite-Laguna Expressway (CALAX) is expected to cut travel time from the Manila-Cavite Expressway and Southern Luzon Expressway by 1.75 hours and is scheduled to open early this year. Another exciting project is the Light Rail Transit (LRT) 1 Cavite Extension, which is foreseen to ease travel between provincial cities in Southern Luzon and Metro Manila.
As the CALABA region is further opened up, industrial parks in the area are expected to lure in more locators. In the Philippine Statistics Authority’s status report for 3Q 2020, the CALABARZON region received the third-highest share of approved foreign investments at PHP5.20-billion. Around half of all foreign investment pledges in the country were dedicated to the manufacturing industry.
As more investment is poured into the region’s infrastructure and projects near completion, Lamudi sees property owners holding on to their real estate and seekers considering a “buy-and-hold” approach as values appreciate.
References: ABS-CBN, Philippine Economic Zone Authority, Philippine Statistics Authority