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Growing logistics sector provides opportunities for property firms

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CentralHub Tarlac
CentralHub Industrial Centers Inc. completed the CentralHub prototype in Tarlac last year.

By Vincent Mariel P. Galang

PHILIPPINE PROPERTY developers should advantage of the continued growth of the logistics sector this year.

During a panel discussion for the 2019 report of the Emerging Trends in Real Estate for Asia Pacific on January 16, Raoul A. Villegas, executive director for deals and corporate finance of PricewaterhouseCoopers (PwC), said the logistics sector is projected to grow by 20% to 25% this year.

“I am also very bullish about logistics, particularly how it relates to warehousing, but more specifically is cold storage warehousing. The reason why cold storage warehousing is very significant it’s because our country lacks a viable cold chain… and that’s one of the reasons why the food that comes to the market is more expensive than… in other cities,” he noted during the discussion.

DoubleDragon Properties Corp. Chief Investment Officer Hannah Yulo noted there is no major player in the industrial warehouse sector, which is why DoubleDragon is planning to build a chain of industrial complexes around the country.

“Cold storage facilities… those are one of our ideal locators for CentralHubs. So, our CentralHub warehouses, these are actually meant for… cold storage, light manufacturing, e-commerce facilities, and other logistics centers… There is no really major player… in the industrial warehouse space. A lot of these warehouses you see today are very segmented, so… you’ll have to talk to so many landlords… for their warehouse facilities,” she said during the panel discussion.




“That’s really what we are trying to consolidate this type of businesses,” she added.

DoubleDragon entered the industrial leasing business when it set up CentralHub Industrial Centers, Inc. It currently has two CentralHubs in Tarlac and Iloilo City. DoubleDragon aims to have eight CentralHub sites by 2020, with two each in North Luzon, South Luzon, Visayas, and Mindanao.

“I am very, very bullish particularly in the industrial warehouse sector… we want to get to about 100,000 square meters (sq.m.)… in particular, if you noticed in the Philippines, it is actually an emerging trend. Everywhere else in Asia, it’s an established sector, but in the Philippines, it seems to have been forgotten,” Ms. Yulo said.

“We in DoubleDragon are very bullish about this sector. We want to be the largest in the Philippines to provide this kind of facility especially with the emerging e-commerce sector,” she added.

OTHER GROWTH AREAS
Developers should also consider expanding into dormitories catering to students and workers.

“Great thing about this population (Philippine population), not only is it… a consuming population there is also a working population, so that is going to be contributing to our economic output… our population is replenishing itself unlike other countries, for example Japan… where populations are shrinking,” Mr. Villegas noted. “Because of the traffic, the demand is going to increase.”

Philippines Urban Living Solutions, Inc. (PULS) operates a chain of dormitories under the brand name MyTown. Property giant Ayala Land, Inc. (ALI) also opened The Flats Amorsolo, which features co-living spaces catering to young professionals, in Makati City.

Tourism projects are also being pursued by many property firms.

Augusto Cesar D. Bengzon, chief financial officer of Ayala Land, Inc. (ALI), said the company is expanding its footprint in the tourism sector to take advantage of the boom in domestic travel.

“We’re quite bullish on the tourism sector. When we put up our own hotel brand eight years ago, we were originally thinking about Seda, which is the brand that would cater to the foreign tourists… but I think the bigger number that the people do not see is the number of domestic tourists… 95 million domestic tourists. We’re seeing that in our hotels during the weekdays… we all know about ‘staycation’ phenomenon and that’s being driven by local tourists… and we expect domestic tourists to continue to rise,” Mr. Bengzon said.

Seda is a hotel brand under Ayala Land Hotel and Resorts Corp, (AHRC), subsidiary of Ayala Land, Inc. (ALI). It is currently present in Bonifacio Global City, Cagayan de Oro, Davao City, Nuvali in Laguna, Iloilo, Quezon City, Bacolod, Cebu, and Palawan.

Mr. Bengzon also shared ALI’s vision for sustainable tourism. The property giant is undertaking an aggressive carbon-neutral program that will offset the projected 490,000 tons of carbon emissions from its commercial properties by 2022.