12
Colliers Radar Philippines | Research 29 June 2017 Shifting Orbits The Rise of Satellite Communities
Colliers Radar
Philippines | Research 29 June 2017
Shifting Orbits The Rise of Satellite Communities
By Joey Roi Bondoc Manager | Research
The government’s failure to adequately
address issues plaguing Metro Manila
such as worsening traffic, flooding, and
poor mass transportation systems has
compelled private firms to take the lead in
developing master-planned communities
that integrate the live-work-play lifestyle.
The expansion of economic activities in
the country’s capital has also buoyed
demand for integrated communities. To
further unlock opportunities, we
recommend that developers:
Distinguish their projects from others
by allocating land for education,
healthcare, entertainment and
recreational uses;
Intensify efforts in terms of strategic
landbanking;
Explore the option of acquiring
reclaimed land;
Redevelop brownfield properties; and
Build flexible office space to
accommodate non-business process
outsourcing (BPO) occupants.
Colliers expects developers to continue pursuing master-
planned communities as these offer a better value
proposition than standalone projects. We believe that the
emergence of millennial workers, who account for about
40% of the country’s labor force and are primarily
employed in BPOs, will sustain the demand for integrated
live-work-play environment. The concept of building
offices, condominiums, malls, schools and hospitals within
one community satisfies the millennials’ demand for
greater mobility and convenience.
Colliers sees developers pursuing more integrated
communities outside of Metro Manila such as Cavite,
Laguna, Bulacan, and Pampanga over the near- to
medium-term as land values are unlocked by an
aggressive expansion of road networks. We are confident
that this will be sustained by the government’s push to
generate economic opportunities in the countryside
anchored on its commitment to usher in the ‘golden age of
infrastructure.’
Selected Townships across Metro Manila
Source: Colliers International Philippines
3 Colliers Radar | 29 June 2017 | Research | Colliers International
Contents
The problems of Metro Manila ....................... 4
Eastwood City: Clothing to outsourcing ......... 5
Rockwell Center: Mothballed thermal to sprawling residential ...................................... 5
Century City: CBD in Makati periphery .......... 6
Capitol Commons: Capitalizing on Ortigas Fringe ............................................................ 6
Vertis: Northern Metro Manila’s Emerging CBD……………………………………………..7
Arca: Southern gateway to Manila ................. 7
Circuit: Makati’s new entertainment hub ........ 8
Aseana City: Reclaimed BPO and tourism hub .................................................. 8
Bridgetowne and ArcoVia: From industrial property to integrated community .................. 9
Conclusion and Recommendations ............... 9
4 Colliers Radar | 29 June 2017 | Research | Colliers International
The problems of Metro Manila
Several socio-economic issues plaguing Metro Manila
remain unresolved. The lack of economic opportunities
in the countryside is pushing people to migrate to the
country’s capital, exacerbating Metro Manila’s unabated
population growth. Poor public transportation systems
coupled with congested traffic make for a gruelling daily
commute for the workforce.
These issues continue to constrain Metro Manila from
achieving its full growth potential. Developers are
bridging infrastructure gaps and unlocking opportunities
by building master-planned communities that have the
potential to become major catchment areas for business
activities in the country’s capital.
The expansion of business opportunities in Metro Manila
has been fuelled by the influx of multinational
outsourcing companies. The fast-evolving demands of
the capital’s workforce and households play a crucial
role in driving a shift in the mindset and strategies of real
estate developers. Property firms saw the need to add
value to the usual standalone building. Market demands
dictate that they build malls, residential condominiums,
and institutional facilities such as schools and hospitals
alongside offices. Metro Manila residents’ rising
disposable incomes have enhanced their standards of
living and reinforced their demand for “convenience,
accessibility, and exclusivity” – features only a master-
planned community could provide. They now prefer to
live, work, dine, and shop in a single community
surrounded by upscale facilities, spacious open area,
green surroundings and energy-efficient infrastructure –
all done by private developer-led master planning. In
these communities, integration prevails over seclusion
as the middle-class family upgrades to condominiums
from house and lots.
The rising demand for these integrated developments as
well as soaring land values in central business districts
(CBDs) have provided the opportunity for developers to
transform idle properties on the outskirts of CBDs into
masterplanned communities. Eastwood City is the
former site of a textile mills; a thermal power plant used
to occupy a portion of Rockwell Center; Century City is
the former site of International School-Manila; while
Capitol Commons is a redevelopment of the former
capitol of Rizal Province.
Rising demand and land prices are also enticing
industrial property owners in strategic locations to
liquidate land holdings in favor of mixed-use township
developments. Examples of these are the upcoming
projects along C-5 Road such as Megaworld’s ArcoVia
City and Robinsons Land’s Bridgetowne. The strategic
location unlocks the potential of these former industrial
properties for more profitable uses.
The national and local governments’ thrust of raising
non-tax revenues has compelled a number of agencies
to put large land parcels out to tender to major property
developers. These properties are now being transformed
into satellite communities that offer specific value
propositions: Vertis North is being positioned as the new
Status of Metro Manila townships
Township (Land Area)
Office (sq m) Residential (unit) Retail (sq m) Hotel (unit)
Institutional (sq m)
Entertainment (sq m) Total
Planned GLA
Completed GLA
Total Planned
Units
Completed Units
Total Planned
GLA
Completed GLA
Total Planned
Units
Completed Units
Eastwood City (18.5 ha) 352,500 320,100 9,700 7,600 25,000 25,000 90 90 1,300 -
Rockwell Center (15.5 ha) 62,000 62,000 5,900 4,200 51,000 45,000 400 114 3,600 -
Century City (3.4 ha)
93,800 - 3,800 3,500 17,000 17,000 - - 1,400 -
Capitol Commons (10 ha) 32,900 19,200 2,000 - 55,000 30,000 - - - -
Vertis North (29 ha)
120,200 - 4,200 - 47,000 9,000 440 300 11,100 -
Arca South (74 ha)
200,000 - 2,400 - 103,000 - 270 - 1,500 -
Circuit Makati (21 ha)
72,100 - 1,300 - 69,000 11,000 250 - - 31,300
Aseana City (107 ha)
131,800 42,300 1,700 - 257,000 25,000 3,850 1,620 160,400 33,400
Bridgetowne (8 ha)
127,800 22,700 - - 17,000 - - - - -
Source: Colliers International Philippines Research Figures are rounded off
5 Colliers Radar | 29 June 2017 | Research | Colliers International
CBD of Northern Metro Manila; Makati Circuit is being
groomed as the next entertainment hub while Arca South
is poised to serve as the Southern gateway to the
country’s capital.
Developers are also building townships outside of Metro
Manila. We attribute this to the construction of railways
and roads in key areas outside of the country’s capital
which unlock values for properties that could be
developed into mixed-use communities. We believe that
the sprawl into urban areas such as Cavite, Laguna,
Bulacan, and Pampanga was also necessary in
capturing a large fraction of the available labor pool that
BPO and industrial tenants could tap. The surge in
residents’ purchasing power encouraged developers to
build malls and recreational facilities alongside office and
residential condominium buildings. The entertainment
facilities also make these townships an attractive
weekend destination for Metro Manila residents. These
developments should be sustained by institutional
facilities such as schools and hospitals. Colliers believes
that the Duterte administration’s decentralization thrust
anchored on the implementation of major public
infrastructure projects should entice developers to
aggressively pursue master-planned communities
outside of Metro Manila.
Eastwood City: Clothing to outsourcing
Source: Megaworld
Established in 1999, Eastwood City is Megaworld’s first master-planned community in Metro Manila. A former textile mill, it has expanded to 18.5 hectares from its original scope of 12 hectares. It currently houses 20 condominium projects featuring about 7,500 units and 11 office buildings with a combined gross leasable area (GLA) of about 320,000 sq m (3.44 million sq ft). From 2017 to 2021 we expect about 1,700 units being added to Eastwood’s residential stock while its office stock is expected to increase by nearly 30,000 sq m (322,800 sq ft). At present, Eastwood City houses more than a
hundred companies. Its occupants include some of the biggest BPO and KPO firms in the country such as Accenture, Citibank, and IBM.
Rockwell Center: Mothballed thermal to sprawling residential
Source: Rockwell Land
Rockwell Land was established in 1995 to develop the
15.5-hectare area occupied by a decommissioned
thermal power facility. The property was transformed into
one of the premium locations for residential development
in Metro Manila. The community’s high-end residential
condominium buildings include Hidalgo Place, Rizal
Tower, Amorsolo Square and Luna Gardens. At present,
these properties’ occupancies hover between 90% and
95% despite being offered to the market in the early
2000’s. Nine residential buildings have been completed
since 1999 offering some 4,100 units. The Carlos Ott-
designed The Proscenium features five residential
towers that will offer an additional 1,600 units. The
towers are due to be completed from 2018 to 2021 but
are already 86% sold as of 1Q 2017.
The 40,000 sq m (430,000 sq ft) Power Plant mall was
completed in 2000. The mall has gone through a number
of renovations to keep pace with the fast-evolving
preferences of consumers. Its 6,000 sq m (64,560 sq ft)
expansion will be completed by September 2017.
Rockwell is also building a 280-room hotel under the
Aruga brand due to be completed in 2019. This will
complement the existing 114-unit Aruga serviced
apartment.
The recently-completed 8 Rockwell attracted some of the
most prominent pharmaceutical and advertising firms
such as Pfizer, Takeda, IMS Health, and Ogilvy &
Mather. The 32,000 sq m (344,320 sq ft) facility also
houses the ABS-CBN News Channel’s new studio. Other
office buildings in Rockwell Center include the 12,700 sq
m (136,650 sq ft) Phinma Plaza which houses Phinma
6 Colliers Radar | 29 June 2017 | Research | Colliers International
Corporation and Trans-Asia Petroleum and the 16,800
sq m (180,770 sq ft) building occupied by Nestle
Philippines.
Century City: CBD in Makati periphery
Source: Century Properties
Century City is a 3.4-hectare development by Century
Properties located in the fringes of Makati CBD. The
township sits on a property previously occupied by the
International School of Manila. Century City’s residential
projects are marketed to be in the upscale segment by
partnering with prominent personalities and brands such
as Daniel Liebskind, Trump, Armani and Versace. Of the
five residential buildings, four have already been
completed featuring some 3,400 units. Century Spire,
the last of the five residential skyscrapers to rise in
Century City, features 335 units and is 92% sold as of
1Q 2017.
Century City Mall was completed in 2014. The 17,000 sq
m (182,920 sq ft) retail outlet is anchored by Rustans
Supermarket.
The integrated community also features the country’s
first medical mall, the 28-story Centuria Medical Makati.
The medical mall should benefit from the country’s
emergence as a viable medical tourism hub in Asia
Pacific.
Capitol Commons: Capitalizing on Ortigas fringe
Source: Ortigas & Company
A redevelopment of the former Rizal Provincial Capitol
complex, Capitol Commons is a 10-hectare mixed use
development by Ortigas & Co. situated in Pasig City. It is
bannered by Estancia, which offers 30,000 sq m
(322,800 sq ft) of retail space and more than 19,000 sq
m (204,400 sq ft) by GLA of office space, half of which is
occupied by the shared service center of Maersk Group.
The township will also house a 10,000 sq m (107,600 sq
ft) Unimart to cater to grocery shopping needs of
residents in the Eastern part of Metro Manila.
From 2018 to 2020, three residential towers featuring
more than 1,900 units are due to be completed. The
residential condominiums are more than 60% sold as of
1Q 2017.
Capital Commons augments the existing office, retail,
and residential developments in the eastern part of the
metropolis. Its strategic location in the fringe of Ortigas
Center shields the satellite community from traffic
congestion within the business district. These features
enable Capitol Commons’ residential units to command
a price per square meter about 30% higher than
comparable units in Ortigas Center.
7 Colliers Radar | 29 June 2017 | Research | Colliers International
Vertis: Northern Metro Manila’s emerging CBD
Source: Ayala Land
Ayala’s 29-ha Vertis North is being positioned as the
CBD of northern Metro Manila. The satellite community
should capture the growing demand for office, retail,
residential, and institutional space in Quezon City and
the Caloocan-Malabon-Navotas-Valenzuela
(CAMANAVA) corridor area as well as parts of Bulacan
in Central Luzon.
Vertis North’s six residential towers offer a combined
4,121 units. Take-up is at 89% as of 1Q 2017.
The Seda Vertis North, Ayala’s largest hotel under the
Seda brand, had a soft launch in April this year. The
438-room hotel was well-received given the lack of
quality accommodation in the northern part of Metro
Manila. Bloomberry Resorts, the operator of Solaire, will
also build a casino in the area that aims to capture the
mass-gaming market in northern Metro Manila and
northern and central Luzon.
Vertis North mall, a 47,000 sq m (505,720 sq ft) retail
outlet primarily targeting millennial mallgoers, partially
opened in June. It will be 85% operational by the end of
the year.
The three-tower Vertis North Corporate Center will have
a combined gross leasable area (GLA) of about 140,000
sq m (1.51 million sq ft) and will mainly house BPO and
KPO companies. The 39,000 sq m (419,600 sq ft) Tower
1 is due to be completed this year.
Vertis North’s viability as northern Manila’s new business
district will be buoyed by the completion of the Metro Rail
Transit (MRT) Line 7 which links North EDSA to San
Jose del Monte in Bulacan. The government expects the
project to become operational by 2021. The master-
planned community is also linked to two existing railways
- Light Rail Transit Line 1 and Metro Rail Transit (MRT)
Line 3 – that pass through Metro Manila’s main
thoroughfare.
Arca: Southern gateway to Manila
Source: Ayala Land
74-hectare Arca South is being positioned as the next
major CBD in southern Metro Manila.The former site of
government-owned Food Terminal Inc. (FTI) will directly
benefit from the construction of infrastructure projects
that link the capital to the thriving provinces of Cavite
and Laguna.
Nine BPO buildings with a combined GLA of 200,000 sq
m (2.15 million sq ft) are in the pipeline. Arca South
Retail will offer some 103,000 sq m (1.1 million sq ft) of
leasable space and will open this year. The township’s
facilities will be complemented by a 265-room Seda
Hotel and a 250-bed QualiMed Hospital.
Some 2,300 residential units have been launched with
about 91% already sold.
The upcoming South Integrated Transport System (ITS)
will be built right beside the Arca South. About 4,000
buses and 160,000 passengers are expected to pass
through the terminal daily and this should directly benefit
Arca South’s retail components. Furthermore, the
community’s proximity to key locations such as Makati
CBD, Ninoy Aquino International Airport (NAIA), and Fort
Bonifacio should help facilitate the community’s
development into a full-blown CBD.
8 Colliers Radar | 29 June 2017 | Research | Colliers International
Circuit: Makati’s new entertainment district
Source: Ayala Land
The former Sta. Ana Racetrack is envisioned as the new
lifestyle and entertainment hub of Makati City. It features
an indoor theatre, multipurpose entertainment spaces,
skate park, and open grounds.
The 21-hectare Circuit will feature residential buildings
from Alveo Land and Ayala Land Premier. Three
residential towers featuring more than 1,200 units have
been launched so far. Take up is strong with about 83%
of units already sold.
Its Seda hotel, due for completion in 2018, will add 255
rooms to Makati CBD’s hotel stock.
Its office buildings will offer about 72,000 square meters
(774,700 sq ft) of leasable space. Colliers expects these
office buildings to attract a mix of BPO and traditional
tenants, especially those looking for available space in
Makati’s peripheries.
Aseana City: Reclaimed BPO and tourism hub
Source: Aseana City
The presence of large casino-resort operators should
sustain demand for office, retail, and residential
developments in this 107-hectare integrated community.
It features the 170-unit Pixel Residences condominium
that is recording strong take-up among the segment of
the population that wants to live within the Manila Bay
Area and the city centers surrounding it.
Demand for Makati CBD and Fort Bonifacio office space
should spill over into Aseana City. It will offer a total of
290,000 sq m (3.12 million sq ft) of leasable office space
that will mainly target BPOs. Of the total, some 125,000
sq m (1.35 million sq ft) has been completed with BPO
firm One Trilogy Systems and London-headquartered
maritime service provider V Ships among the tenants.
Aseana City also houses a Blue Leaf events pavilion, a
popular venue for weddings and large gatherings with a
capacity of 1,000 guests.
DM Wenceslao’s partnerships with major national (Ayala
land) and regional (Hongkong Land) developers as well
as the presence of major infrastructure projects (NAIA
Expressway, LRT 1 Extension, and Southwest
Integrated Terminal) affirm Aseana City’s potential as a
key business district.
9 Colliers Radar | 29 June 2017 | Research | Colliers International
Bridgetowne and ArcoVia: From industrial property to integrated community
Source: Robinsons Land
Bridgetowne Business Park is a 8-hectare property
acquired from Republic Glass Holdings Corporation. It
features four office buildings with a combined GLA of
about 127,000 sq m (1.37 million sq ft). The 23,000 sq m
(247,500 sq ft) Tera Tower was completed in 2015.
Among its major occupants is the BPO firm Concentrix.
The firm will also occupy additional space in Zeta and
Exxa Towers which are expected to be completed over
the next 18 to 24 months. Details of Bridgetowne’s retail
and residential components have yet to be released. The
integrated community also features a Blue Leaf events
pavilion.
ArcoVia is Megaworld’s newest township and dubbed as
the country’s first ‘green’ community. It spans 12.3
hectares. Three LEED-registered office buildings, due for
completion late this year and in 2018, will be designed
by the firm behind Burj Khalifa in Dubai, currently the
world’s tallest building. The office towers will offer a
combined 87,000 sq m (936,100 sq ft) of leasable space
and are expected to be completed between 2018 and
2019.
ArcoVia will also have retail and residential components.
The Filipino concept membership supermarket Landers
will open a branch within the township. ArcoVia will be
supported by a rainwater catchment facility and a
transportation hub.
Both Bridgetowne and Arco Via are attractive locations
for outsourcing companies given their proximity to Pasig
and Antipolo, Cainta, and Taytay in Rizal Province, a
corridor considered a rich source of BPO talent.
Conclusion and Recommendations
Colliers expects developers to continue pursuing satellite
communities in and outside of Metro Manila. Townships
offer a better value proposition than standalone projects
since they offer mixed-use developments. We believe
that this feature makes integrated townships a more
attractive option for investors.
More BPO tenants will also gravitate toward integrated
communities as they offer a better living and working
environment.
Colliers sees the emergence of millennial workers, who
account for about 40% of the country’s labor force,
sustaining the demand for township projects. The
concept of building offices, condominiums, malls,
schools and hospitals within one community satisfies
millennials’ demand for greater mobility and
convenience. By 2030, millennials and the next
generation will comprise about 70% of the country’s
workforce based on data from the Philippine Statistics
Authority (PSA). A 2015 Urban Land Institute (ULI)
report noted that about 60% of millennials would like to
live where they do not need a car often and that
millennials will continue to be a strong driver of demand
for compact and mixed-use communities.
Eventually, we see private developers taking the lead in
building crucial infrastructure to boost growth within their
integrated communities. A key example is the planned
construction of a bridge over Marikina River that will
connect two parcels of land in Pasig and Quezon City
owned by Ayala Land and Eton Properties, respectively.
The properties cover the planned 35-hectare mixed-use
estate along the C-5 corridor that will be developed by
two of the largest property developers in the Philippines.
We believe that the current administration’s thrust to
spread economic opportunities outside Metro Manila and
intensify infrastructure development should provide
impetus for developers to be more aggressive in
pursuing mixed-use projects outside of the country’s
capital.
To the south, we see Cavite benefiting from the
implementation of rail and road expansion projects which
should provide access to properties that could be
redeveloped into mixed-use communities. These
infrastructure projects include the recently-completed
Muntinlupa-Cavite Expressway (MCX) as well as Light
Rail Transit (LRT) 1 Cavite extension, Cavite-Laguna
Expressway (CALAx), and North Luzon Expressway
(NLEX) and South Luzon Expressway (SLEX) connector
road which are under construction.With several
infrastructure and township investments in the pipeline,
10 Colliers Radar | 29 June 2017 | Research | Colliers International
we expect Cavite to come to its own as an urban center
and rise from its previous image as a mere suburban
support area to Metro Manila. Among the major
townships located South of Metro Manila are
Megaworld’s Southwoods, Vista Land’s Vista City, and
Ayala Land’s Nuvali and Vermosa. While these
townships offer a significant portion for lifestyle and
recreational facilities, they are also envisioned as major
retail and academic hubs of Southern Luzon. The
establishment of the first University of the Philippines
(UP) Technopreneurship campus in Vista City should
support local technological start-ups as well as the
expansion of the existing manufacturing base in the
Cavite-Laguna-Batangas corridor
To the north, we see Pampanga cornering the bulk of
township-related investments in the region given the
government’s commitment to develop the North Luzon
segment of North-South Railway project and expand the
existing Clark International Airport. Townships such as
Ayala’s Alviera and the Megaworld’s Capital Town are
allotting a significant space for industrial parks. These
industrial spaces, coupled with major infrastructure
projects, should further enhance Pampanga’s appeal to
existing and prospective industrial locators. Developers
are also building a substantial amount of office space to
take advantage of Pampanga’s viability as a key
outsourcing hub.
Over the near to medium term, Colliers sees more
industrial-related developments as part of townships
being pursued by developers nationwide, especially in
areas where adequate infrastructure support is available.
Given the growing appetite for township development,
we recommend that developers implement the following:
Differentiation of townships
Developers are aggressively acquiring large parcels of
land that could be developed into master-planned
communities. In the increasingly competitive
environment, developers need to distinguish their
projects from others. Apart from the typical land uses
such as office, residential, retail, and hotel, developers
should also incorporate institutional uses such as
education and healthcare. Other developers have been
more aggressive in “differentiating” their communities by
integrating entertainment and recreational facilities for
outdoor sports such as football and wakeboarding.
These townships include Circuit Makati with its skate
park; Nuvali with its wakeboarding facility; and Alviera
bannered by Sandbox, which features the country’s first
roller coaster zipline. The developers’ differentiation
strategies are anchored on placemaking or the ‘multi-
faceted approach to the planning, design and
management of public spaces.’ Under this method,
developers assess each community’s distinct assets and
potential and eventually build facilities that will maximize
those features. A well thought-out placemaking strategy
should keep people interested to stay in an integrated
township. Overall, placemaking should help transform
places into destinations where people can synergistically
converge.
Strategic landbanking
Colliers believes that developers should take advantage
of the government’s thrust to intensify infrastructure
development in and outside of the country’s capital. The
completion of public infrastructure projects should result
in a more aggressive construction of townships. To cash
in on the opportunities, developers must intensify efforts
in terms of strategic landbanking. Within Metro Manila,
opportunities for township developments are in Quezon
City North (Fairview, San Jose del Monte, Novaliches
and Commonwealth), Marikina and Pasig. Meanwhile,
other provinces that are viable locations for township
developments include La Union, Pangasinan, Tarlac,
Batangas, Naga, Iloilo, Bacolod, Cebu, Davao, and
Cagayan de Oro.
As an example, Ayala Land is able to launch major
townships in and outside of Metro Manila due to strategic
landbanking. After the launch of Vertis and Arca in the
northern and southern portions of Manila, the property
firm said it has concluded a deal with the Lucio Tan
group’s Eton Properties to develop a 35-hectare property
spanning Quezon and Pasig cities. Recently it launched
its 250-hectare Evo City project in Cavite and the 25-
hectare Azuela Cove in Davao City.
Development of flexible office space to
accommodate firms that require smaller space
The robust economic growth in the country’s capital
reflects not just the sustained dynamism of the BPO-led
services sector but also the expansion of other key
economic sub-sectors such as construction,
telecommunications, banking and finance, warehousing
and logistics, and manufacturing. We expect companies
engaged in these businesses to expand and thus occupy
additional office space. We encourage developers to
make their office buildings in their respective townships
more flexible to accommodate demand from non-
BPO/traditional companies that require smaller cuts.
This recommendation also applies to office buildings in
townships outside of Manila since the current
administration’s decentralization push is encouraging
national government agencies and their attached
bureaus, which occupy less office space than BPOs, to
transfer to nearby provinces such as Pampanga. We
11 Colliers Radar | 29 June 2017 | Research | Colliers International
also see firms which conduct businesses with these
government agencies opening shops outside Metro
Manila. Some of the recently completed office buildings
within Metro Manila townships that house a mix of BPO
and traditional tenants are Aseana Two in Aseana City,
Estancia in Capitol Commons, and Tera Tower in
Bridgetowne Business Park.
Acquisition of reclaimed land
Developers should be on the lookout for ongoing
reclamation projects in the Manila Bay Area as a
potential supply of developable land. At present, there
are four active reclamation projects around the Manila
Bay Area where commercial, residential, industrial, and
educational zones can be developed. Land in reclaimed
areas is much cheaper than in established business
hubs. Townships developed on reclaimed land in the
Manila Bay Area, such as DM Wenceslao’s Aseana City,
should also benefit from public infrastructure projects
nearby such as the Southwest Integrated Terminal, NAIA
Expressway, Sangley Airport, and Metro Manila subway.
According to the Philippine Reclamation Authority (PRA),
the major reclamation projects in the Manila Bay Area
include the 148-hectare Manila Solar City stretching from
the Cultural Center of the Philippines to the United
States embassy and the 635-hectare Las Piñas-
Parañaque Coastal Bay Reclamation Project which is
near the existing Mall of Asia Complex and across the
Libertad channel.
Redevelopment of brownfield assets
Developers must aggressively scout for idle private
properties or government assets that they can acquire
and redevelop into master-planned communities. This
strategy is similar to Rockwell Land’s redevelopment of a
mothballed power facility into a thriving Rockwell Center
and Megaworld’s transformation of an idle textile mills
into a fully-developed Eastwood City. We expect the
government to be more active in putting land parcels out
to tender to private developers as it intends to raise
additional revenues for its massive infrastructure
development program. Given the lack of developable
land in Metro Manila, we think that some developers
should revisit the option of buying back properties that
were previously donated to government agencies.
Implementation of a unique development mix
with other developers
We recommend that developers that own large parcels
of land for their mixed-use communities consider selling
individual lots while retaining the greater part of the land
holdings. These developers with massive landbank
should also allow other firms to pursue their own pockets
of developments as long as the projects are aligned with
the entire township’s design guidelines. This should
result in a more interesting development mix and
landscape for the entire integrated community. The
Aseana City, for instance, should become a more
attractive master-planned community once the mixed-
use projects of Ayala Land and Hong Kong Land are
completed.
As for end-users and investors, we recommend the
following:
Emphasis on the lifestyle
For end-users, we recommend opting for developments
in mixed-use satellite communities as these enhance
working and living conditions. In fact, smaller-sized retail
and office developments are being created in line with
the live-work-play philosophy.
Possible enhancement of yields
We recommend that investors choose projects in
townships due to possible yield enhancement. Given that
capital values in established CBDs have significantly
escalated in recent years resulting in yield compression,
lower entry price for strata-titled office and residential
developments could offer some enhancement in yields.
Copyright © 2017 Colliers International.
The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report.
About Colliers International Group
Colliers International Group Inc. (NASDAQ and TSX: CIGI) is an industry-leading global real estate services company with 15,000 skilled professionals operating in 68 countries. With an enterprising culture and significant employee ownership, Colliers professionals provide a full range of services to real estate occupiers, owners and investors worldwide. Services include strategic advice and execution for property sales, leasing and finance; global corporate solutions; property, facility and project management; workplace solutions; appraisal, valuation and tax consulting; customised research; and thought leadership consulting.
Colliers professionals think differently, share great ideas and offer thoughtful and innovative advice that help clients accelerate their success. Colliers has been ranked among the top 100 global outsourcing firms by the International Association of Outsourcing Professionals for 12 consecutive years, more than any other real estate services firm.
For the latest news from Colliers, visit Colliers.com/Asia or follow us on Twitter: @Colliers and LinkedIn.
396 offices in
68 countries on
6 continents United States: 153
Canada: 29
Latin America: 24
Asia Pacific: 79
EMEA: 111
$2.6 billion in annual revenue
2 billion square feet under management
15,000 professionals and staff
Primary Authors:
Joey Roi Bondoc
Manager | Research
+632 858 9057
joey.bondoc @colliers.com
Contributors:
Richard Raymundo
Deputy Managing Director | Philippines
Colliers International | Philippines 11/F Frabelle Business Center
111 Rada St., Legaspi Village
Makati City 1229 | Philippines
+ 632 888 9988
