GOVERNMENT-LED infrastructure projects, Philippine offshore gaming operators (POGOs), and emerging urban centers outside Metro Manila, among other factors, are poised to drive further growth in the real estate industry this year.
This is according to property brokerage and consultancy firm PRIME Philippines in its Philippine Real Estate Outlook for 2019, which saw “upbeat and positive growth potential” in the property sector.
PRIME noted infrastructure development, led by the Duterte administration’s “Build, Build, Build” program, is one of the key contributors towards this positive outlook, with connectivity projects like the Manila-Clark railway pushing major developers towards certain hotspots around Metro Manila.
“With the recently opened and upcoming infrastructure projects of the government in place, developers are now on track to getting and developing the most strategic locations in and out of Metro Manila,” the report said.
“Similarly, general connectivity from Metro Manila to nearby provinces of Bulacan, Cavite, Laguna, and Pampanga, among others, is also expected to drive developments outside, decongest the metro and develop the regional urban centers, particularly in Central Luzon,” it added.
Among such regional hotspots, the Clark area in Pampanga has attracted the most interest from major developers owing to key infrastructure projects throughout the province, such as the Subic-Clark railway, Manila-Clark railway, and the PNR North railway. Developers like SM Prime, Century Properties, Ayala Land, and Megaworld have all begun to set up shop, and more are sure to follow.
“Normally if there are big players already in the area, the secondary developers also come in to play,” PRIME Philippines Founder and CEO Jettson Yu said during a panel discussion of the company’s report.
“[It won’t be] any time soon, but if you wait 10 years, definitely Clark, Pampanga will be a bustling city up north,” Mr. Yu said.
Moreover, according to the report, Pampanga is the primary choice of POGOs looking to expand outside Metro Manila due to the large workforce available in the area.
POGOs, which are largely responsible for the Bay Area’s transformation into a bustling commercial district and its primary driver of growth, are looking for available bulk office spaces to support their growing businesses.
“Pampanga has been a primary choice considering the large workforce available in the area. Aside from that, other urban centers with large employable population such as Cavite are also options for online gaming operators to expand their businesses due to its proximity to key access points in the metro,” the report said.
Players in the commercial retail sector are also setting their sights on locations outside Metro Manila for growth. PRIME Philippines noted that SM Prime Holdings, Inc.’s last 10 mall ventures are in the provinces, with SM Center Ormoc being the latest addition from 2018, and the first SM mall in Eastern Visayas.
Other developers like Megaworld Corp., Vista Land & Lifescapes, Inc., and Robinsons Land Corp. are expanding their footprint in areas like Cebu, Davao, Iloilo, Laguna, and La Union.
“For 2019 alone, large retail developers, except Ayala Land, have already tapped targeted underserved yet developing cities outside Metro Manila. Davao is one of the common denominators with these developers signaling the growing confidence on the market and spending capacity in the region,” the report added.