8 areas, including Bacolod, Davao, to spur realty sector

By Luis Leoncio

The property sector is expected to make a strong comeback this year, with eight areas, led by Metro Manila cities, seen to fuel strong growth through new projects, according to online real-estate market site Lamudi in a report. 

The Philippines’s real-estate sector, despite a somewhat restrained performance in 2015, is far from experiencing a downturn, it said.

“In fact, real-estate developers launched more ambitious projects last year, not just in Metro Manila but in other cities as well, and these players are earmarking record capital expenditures, ensuring that the sector’s momentum is sustained over the next few years,” it added.

With this, many of the country’s cities will surely benefit from all these real-estate investments.

Lamudi said some of the cities that property buyers and investors should watch for this year are not only found in the urban centers of Metro Manila but elsewhere in the country, such as Bacolod and Davao.

Quezon City, which is Metro Manila’s largest city, is projected to have a population of more than 3.5 million by 2020, according to Lamudi calculations.

Many Filipinos are looking into relocating to the city, as shown by search data, Lamudi said.

The reasons behind Quezon City’s appeal include its relative affordability compared to Makati and Taguig, and the many options it offers to homebuyers.

“Plenty of new developments in the pipeline. In 2015, for example, Ayala Land subsidiary Avida Land announced its Cloverleaf mixed-use project situated within the busy intersection of Edsa and North Luzon Expressway,” it added.

Although growth has somewhat moderated over the last couple of years in Makati City, the country’s most important financial and business district is not ready to pass its crown just yet, the report said.

“Although the average rental rate in the Makati central business district (CBD) is expected to decrease 3.39 percent year-on-year to the third quarter of 2016, while vacancies are seen to increase to 10.19 percent across all condominium grades, fringe areas are starting to see an uptick in real-estate activity, particularly Barangay San Antonio, which is a stone’s throw from Ayala Avenue,” it said.

Worsening traffic conditions in Metro Manila are also making these areas attractive to renters and homebuyers, it added.

Taguig City’s population is projected to reach almost 1 million by 2020, which will make it the National Capital Region’s fourth most populous (after Quezon City, Caloocan, and Manila) and the Philippines’s ninth.

The city’s real-estate sector has been on an upswing since Fort Bonifacio was privatized, Lamudi said.

It added that several projects are now under way, most notably Megaworld’s McKinley West and Ayala Land’s Arca South.

“Access to and from the airport (particularly Terminals 1 and 2) and to Coastal Road will also improve when the flyover connecting C.P. Garcia Avenue to the Moonwalk Access Road and West Service Road is finally completed,” it said.

Lamudi also cited Pasay City, which it said is getting more buzzword mainly due to the Bay City, the reclamation area along Manila Bay housing the Mall of Asia Complex, Entertainment City, and Aseana City.

“The SM group, for example, has already incorporated office and residential components in the Mall of Asia Complex, while Federal Land is set to complete its Six Senses Residences in 2016 and its first tower in the Palm Beach project in 2017,” it said.

It added that infrastructure is expected to improve when the Naia Expressway connecting the Metro Manila Skyway to the Manila–Cavite Expressway and Entertainment City, is finally completed.

In mid-2015, Lamudi said its data showed that Bacolod City is one of the most popular cities among online property hunters. It said real-estate giant Ayala Land announced in late 2015 that it is building two integrated townships in the city (the 50-hectare Northill Gateway and the 34-hectare Upper East), while it sealed an agreement with the provincial government of Negros Occidental to build the mixed-use Capitol Central.

It also said Davao City was one of the most searched in the Lamudi website in 2015. It is the sixth and third most searched city by property-hunters based in the US and Saudi Arabia, respectively, according to Lamudi data.

Cebu City is one of international property guide Tholons’s Top 10 outsourcing destinations in the world (and second in the Philippines, behind Metro Manila). According to California-based property firm CBRE, exciting expansions and new developments are coming into Cebu over the next few years.

“In 2015 alone, two new large malls opened in the city, SM Seaside City Cebu and Robinsons Galleria Cebu. SM Seaside alone has an area of 10–15 hectares devoted to commercial development similar to the E-com office towers in the MOA Complex, while Robinsons Galleria will have entire floors dedicated to BPO offices,” it said.

Lamudi also said the south of Metro Manila, specifically Muntinlupa City, is also projected to perform well this year, with the launch of several high-profile projects from the country’s biggest developers.

Among the chief prospects in the area is Avida’s South Park District, a mixed-use development sitting on the former Nestle plant in Alabang, in addition to the established Filinvest and Madrigal business districts.

“Further, in anticipation of infrastructure projects expected to ease travel to the south, property developers, including Rockwell subsidiary Rockwell Primaries and Vista Land, are now eyeing Muntinlupa as their next focus area,” it said.