The first half of 2016 saw the continued dominance of Metro Manila areas among places in the Philippines most searched for by online property-hunters. Sixteen of the top 20 neighborhoods viewed by users of the property portal Lamudi were in Metro Manila, with interest shifting slightly among the areas as the year progressed.
No surprise there, since business and investment is centered in Metro Manila. Being the location of the nation’s capital, the country’s leading financial districts, and many of its major commercial facilities and media outlets, Metro Manila is arguably the region most synonymous to the Philippines. With its high level of urbanization and its consolidated location, many seek to live and invest in the metro.
But the siren call to leave the big city beckons more stridently each day, what with the worsening vehicle gridlocks, and soaring real estate prices.
Metro Manila has understandably been the focus of property development in the past few decades due to its status as an economic hub. But the metropolis’ saturation level in terms of population and vehicle volume has reached a critical stage, and looking elsewhere for areas that can be developed has become an imperative for property players today.
In its 2016 forecast, Lamudi Philippines projected that rural-urban fringe areas (“outskirts”) will be explored by more developers for mixed-use projects due to the tightening supply of land in the city.
Property experts predict more townships sprouting across the country. Colliers International Philippines said that despite a slowdown in the residential condominium market in Metro Manila, developers will continue to pursue these developments in and outside of the capital.
Who's afraid of big, bad MM?
One popular urban-rural fringe area is Calabarzon —comprising the provinces of Cavite, Laguna, Batangas, Rizal and Quezon. It boasts the country’s second largest gross regional product at P1.644 trillion and a buoyant real estate market. Lamudi’s report indicated that Calabarzon is the Philippines’ second most economically important region after Metro Manila.
Enrique M. Soriano III, Ateneo program director for real estate and senior adviser for Wong+Bernstein Business, said about Calabarzon: “There is so much optimism as major property developers like Ayala and Megaworld have been investing heavily and creating portfolio growth forecasts well beyond a 20-year cycle.
Last year, leading conglomerates Ayala Land Inc. (ALI), SM Prime Holdings Inc., Megaworld Corp. and Aboitiz Equity Ventures Inc. They have joined forces to develop the P123.8-billion Laguna Lakeshore Expressway Dike.”
Soriano revealed that ALI is also investing P170 billion to develop a 700-hectare mixed-use estate in Cavite similar to other Ayala projects in Makati, Bonifacio Global City and Nuvali.
Soriano said, “Accounting for 20 percent of ALI’s revenues since 2009 and 15 percent of the parent firm’s net asset value, Nuvali is building up its leasing assets, focusing primarily on office spaces worth P12.5 billion, doubling its size from 31,000 to 60,000 sqm as part of its five-year plan.”
Growing demand, fast infrastructure
He added that Megaworld is also steadily drumbeating its biggest horizontal project to date, the 1,000-plus-hectare mixed use Twin Peaks project in the Tagaytay-Batangas corridor with the first-of-its-kind vineyard concept.
“While it is inevitable that inventories will soften in the traditional CBDs in Makati, BGC and Ortigas, the southern corridor will dramatically be the next crown jewel in the next 10 to 20 years,” Soriano said.
The Lamudi report elaborated: “The provinces of Laguna, Cavite and Rizal are close to Metro Manila and for this reason, they are popular areas to buy a home for the capital’s millions of workers. The cities of Bacoor and Dasmariñas in Cavite, San Pedro and Santa Rosa in Laguna, and Taytay, Cainta and Antipolo in Rizal are home to numerous residential subdivisions that offer houses from as low as P1 million in Cainta to as high as P35 million at Ayala Southvale in Bacoor.”
The increase in demand for property in these locales can be attributed to its close proximity to Metro Manila, as well as the continued improvement of the infrastructure around it. Projects like the forthcoming rail connectivity project between the port of Manila to an inland container terminal facility in Laguna; Cavite–Laguna Expressway (CALAX); and the Laguna Lakeshore Project, among others, are seen to make commuting and doing business between Metro Manila, Cavite, and Laguna much easier. Under the government of President Rodrigo Duterte, more such PPP (Pubic Private Partnership) projects seem to be on the batter’s deck.
Industrial estates on the move
Occupancy rates for industrial estates are also evidence of the increasing interest in areas outside Metro Manila. According to CBRE’s Metro Manila Marketview for the fourth quarter of 2015, a souring relation between Japan and China has prompted investors in the former to look into other parts of Asia, such as the Philippines, for relocating their operations.
The report went on to detail that PEZA zones surveyed by CBRE within Clark, Subic, Cavite, Laguna, and Batangas exhibit high occupancy rates, with the average occupancy rate for the said industrial parks in the said provinces to approximately be at 86 percent. As industrial facilities rise in these areas, employment will subsequently increase, with those making a living in the area likely to also increase the demand for residential property.
CBRE reported that a total of 1.13 million square meters will be added to the country’s industrial park in 2016. These are from private developers like Suntrust Ecotown (338,328 square meters), Cavite Technopark (359,664 square meters), Vista Land (243,840 square meters), and Global Gateway Logistics City (188,976 square meters).
More townships
Last year was the year of townships, with several mixed-use developments being embarked on, or completed outside of Metro Manila to meet the increase in different property needs.
According to KMC MAG Group, a local associate of UK-based real estate consulting firm Savills, local developers continue to aggressively purchase significant property and increase their land banks as the market shows no sign of slowing down and townships, which are best described as secondary cities, are in themselves becoming centers of tourism, services, trade, and industry.
Major developers with significant township projects that are all but guaranteed to drive up investment potential and land values in their respective areas include Megaworld Corporation, Iloilo Business Park, and Santa Barbara Heights projects in Iloilo, Mactan New Town in Lapu-Lapu City, and The Upper East in Bacolod, among others. Ayala Land, on the other hand, has Alvierra in Pampanga, Vermosa in Cavite, and Altaraza in Bulacan, to name just a few.
Quality of life
One other thing that makes places such as the Calabarzon region an interesting option to live in is that it is rich in local history. Historical monuments and landmarks, old churches and shrines dot the region’s landscape. Aside from these, the region was home to countless historical events, which makes it easy for visitors and residents to explore the place.
With major property developers, as well as smaller but equally passionate real-estate companies, working to shape the region into a residential haven and an economic powerhouse, moving out of Metro Manila seems no longer such a difficult proposition to consider.