With the effects of the coronavirus disease 2019 (COVID-19) pandemic still being felt worldwide, many leaders and policy makers are turning their minds to recovery. The global economy is experiencing the worst economic depression in a century, and novel ideas must be put forward for the world to bounce back.
In order to address a holistic recovery, there is a call for governments to address economic problems like a lack of dynamism and flexibility, citing the importance of decentralizing economic and capital functions to less populated areas. Such a shift may induce a swifter economic recovery, while simplifying crisis management, and bringing new life to regional centers.
In the Philippines, the initiative to decentralize Metro Manila has long been a focus of the national government. Decentralization would serve to accelerate rural development and revitalize essential industries such as farming and fishery, while reducing the population density of the capital.
Many local and multinational investors are looking to expand their businesses to untapped regional areas in the Philippines, according to international real estate services firm KMC Savills.
“They’re actively looking in provincial areas, a lot closer to where their employees live. They want their employees not to sit in transportation, not to take public transportation, to be able to get to the office very quickly,” said KMC Savills, Inc. Managing Director Michael McCullough at a previous webinar.
Particularly, Pampanga is emerging as a hotspot for investors looking to secure real estate. Global real estate services firm Colliers International tagged the area as having a ‘high potential’ to become a key property investment hub outside Metro Manila.
“The government’s active infrastructure implementation and decentralization program is encouraging developers to look closely at Pampanga, notably Clark Freeport and adjacent cities and municipalities,” the company wrote on one of its market intelligence reports.
“We think the Clark-Angeles-San Fernando corridor (Metro Clark) has high potential to become a key property investment hub outside Metro Manila. We see opportunities for office and residential segments.”
Meanwhile, Colliers noted that property developers are starting to line up leisure and retail segments and plan to tap demand once the pandemic wanes and market sentiment recovers.
“Given the relatively cheap developable land in the area, Colliers believes that the development of integrated communities is a practical route for many developers,” the company added.
Furthermore, the new international gateway facility in Clark will likely improve efficiency of logistics operations in northern Luzon. Colliers pointed out that the completion of the Clark International Airport Expansion project might entice other logistics, information and technology, tourism and outsourcing firms to consider Clark for their operations.
“The improved connectivity should also spur more economic activities and eventually drive the demand for offices, residential and industrial spaces and warehouses in the northern Luzon corridor. Colliers sees the completion of other infrastructure projects such as Skyway 3, Clark-Malolos Passenger Railway, NLEx-SLEx connector and the Subic-Clark Railway further boosting the region’s attractiveness for logistics-related investments post-pandemic,” the company wrote.
Outside of Luzon, the local government units of Davao and Iloilo are also attracting the eye of investors. According to a white paper published by online property marketplace Lamudi, several companies, especially business process outsourcing firms, continue to expand and establish their operations in these cities.
“With the ongoing decongestion efforts of Metro Manila through several decentralization measures by the government, such as stimulating industrial activities in the countryside and enticing more enterprises to set up their operations there, more and more property developers are expanding beyond the country’s premier urban hub to meet the growing demands of property seekers for residential condominiums in these so-called emerging cities, notably Davao, Iloilo, and Angeles in Pampanga,” the white paper said.
The current trend for developers in seeking out these areas remains to be master-planned or mixed-use townships, integrated communities wherein tenants can live, work, and play without having to face the hassle of commuting.
Townships have the added benefit of allowing communities to better respond to the current and future crises, with an increasing demand for more work and life balance. With remote work becoming the norm overnight, many more employees are exposed to the advantages of working closer to home, limiting their exposure to the virus and securing their health and well-being.
“Colliers believes that there is sustained demand for condominium projects located within townships. In our opinion, the convenience of being near office and retail establishments partly contributes to strong take-up,” Colliers wrote.
“To take advantage of this demand, Colliers recommends that property firms continue developing integrated communities outside Metro Manila. This should be facilitated by strategic land banking in property investment hubs outside the capital region such as Cebu.” — Bjorn Biel M. Beltran