DAVAO CITY — Storage facilities and residential spaces, especially those within mixed-use projects, are the property segments least affected by the coronavirus pandemic in Davao, according to consultancy firm Prime Philippines.
Prime Philippines also expects these segments to remain strong as economic activities adjust to what are now standard health safety protocols.
“Demand for industrial warehouses have been observed to be increasing and areas outside Metro Manila continue to dominate this segment due to limited supply of industrial lots within Metro Manila,” Prime Philippines Regional Director for Davao Ma. Luisa Abaya said in an online presentation during the Davao City Chamber of Commerce and Industry, Inc.’s (DCCCII) general membership meeting on Aug. 28.
Davao registered the second highest year-on-year growth for warehouse rental rates per square meter (sq.m.) in the first half of 2020 at 20%, Ms. Abaya said citing the company’s Research and Advisory 2020 report.
From a range of P120-P230 per sq.m. in 2019, rates now go as high as P300.
There are currently over 26,000 sq.m. of leasable warehouse space in Davao City and another 17,976 sq.m. in the neighboring city of Panabo.
Bulacan ranked first with a 23.81% growth rate, where rates went up from P90-P120 to P110-P150.
Other key locations that saw a growth rate of over 10% are Metro Cebu and Laguna.
“Demand for warehouses are and will be driven by e-commerce…. Growth of e-commerce is likely to continue supporting logistics activities,” Ms. Abaya said.
For the residential sector, she said long-term investors are seen to be taking advantage of more flexible payment terms offered by developers.
“Encouragingly, members of our Davao CREBA (Chamber of Real Estate and Builders’ Associations, Inc.) Chapter have been congratulating each other for their sales…. We look forward to the second half because it remains encouraging for us here in Davao,” she said.
Marlon B. Escalicas, Visayas-Mindanao head of Vista Land and & Lifescapes, Inc.’s Camella Condo Homes (COHO), said there was an initial “wait-and-see” attitude from buyers at the start of the lockdown in mid-March while their sales force was adjusting to the online platform.
“A lot of our sellers are still struggling to learn digital selling and the internet connection is still a challenge. But I think the industry is adapting to this and buyers are also slowly gaining confidence in doing online transactions,” Mr. Escalicas said in an earlier online interview.
COHO is the new medium-rise condominium brand of the Villar-owned Vista Land, which includes amenities such as co-working space in a coffee shop, one-stop home improvement store, and an entertainment room with a cinema, among others.
Ms. Abaya said developers of such mixed-use projects or townships have been “aggressively completing” their projects given the continued demand.
Davao business leaders said this trend may be attributed to sufficient local investors who traditionally see real estate as the best place to park their money.
“Definitely townships… planned unit developments that combine residential, commercial and workspaces, they become like bubbles so the worker do not need to commute anymore to work…. That puts the township at an advantage,” DCCCII President John Carlo B. Tria said.
Arturo M. Milan, regional governor for Mindanao of the Philippine Chamber of Commerce and Industry, said locals who have excess money as well as financial institutions see real estate as the “best investment in these pandemic times” given that depreciation of value, if any, “will not be that much.”
Mr. Milan also explained that unlike in the 1997 Asian financial crisis, the current coronavirus-prompted turmoil has not drained the money market, which means there are available funds that can be put into “hard assets.”
“And when we talk of hard assets, it’s real estate where the value of your money will least likely depreciate.” — Marifi S. Jara and Maya M. Padillo