Land values in reclaimed areas in Metro Manila have risen sharply due to the growing appetite for office, residential, and retail projects, global real estate firm Colliers International said in a recent report.
Coupled with the lack of developable land in established business districts in Metro Manila, this compels developers to look for alternative landbanking options, Colliers added.
“The popularity of reclaimed developments in the Manila Bay Area such as Aseana City is gaining traction among developers and this reinforces the viability of reclaimed land as a highly feasible landbanking strategy,” the firm said.
“The strong demand for office buildings will be complemented by residential and retail projects hence the need to reclaim more developable land,” said Paul Vincent Ramirez, Colliers International Philippines director for valuation.
The leading Central Business Districts like Makati and Fort Bonifacio, Ramirez said, is only hovering between 1 percent and 3 percent vacancies, which made the Aseana City areas in demand for the business process outsourcing industry to sustain the country’s 6 percent to 7 percent annual economic growth.
“As developable land in Metro Manila’s major business districts becomes scarce and prices continue to surge, it is only practical for developers to look for viable landbanking alternatives such as reclaimed land in the Manila Bay Area,” Ramirez added.
The Manila Bay area ranges between P200,000 to P250,000 per square meter, growing by an average of 30 percent annually over the past five years.
Meanwhile, land in Makati CBD and Fort Bonifacio hovers between P500,000 to P600,000 per square meter, rising about 15 to 20 percent per annum during the same period. The cost of the reclaimed area is more viable compared to the land established in CBDs, Colliers said.
At present, Manila Bay has five active reclamation projects—the New Manila Bay City of Pearl project; The Manila Solar City Project; Pasay City Reclamation Project; Navotas City Coastal Bay Development Project; and the Las Piñas-Parañaque Coastal Bay Reclamation Project.
The “live-work-play-shop” lifestyle popularized by Aseana City added to the eagerness of the developers to reclaim the land.
Additional to the viability of mixed-use projects is the proposed public infrastructure projects nearby, including the Naia Expressway, Light Rail Transit (LRT) 1 Cavite Extension, Southwest Integrated Terminal, Sangley Airport, and Metro Manila subway.