Alternative industrial hubs a trend to watch in 2017

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ALTERNATIVE industrial hubs are a trend to watch out for in 2017 as a result of better infrastructure that translates to more investment in the country, property analysts interviewed by The Manila Times said.

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The manufacturing sector is going to attract more investment, said Joey Roi Bondoc, Colliers International Philippines research manager.

“The resurgence of the country’s manufacturing sector, coupled with the improved infrastructure connectivity brought about by railways and expanded highways, should enable the country to attract more investments,” Bondoc noted.

The P10-billion rail cargo project by MRail is one of the projects that would help expand industrial activities in Luzon. MRail is a unit of the Manila Electric Company (Meralco).

“The project will initially connect the Manila port and an inland container facility in Laguna,” Bondoc said.

“The Meralco subsidiary is planning to extend the rail cargo line to Subic and Clark in the north and to Batangas in the south,” he added.

Developers are looking for other viable locations to put up industrial and manufacturing hubs in the country aside from Cavite, Laguna and Batangas in South Luzon.

“Alternative locations would Bataan, Bulacan, Tarlac, Pangasinan and La Union in Luzon; Cebu in the Visayas; and Davao in Mindanao,” Bondoc noted.

Meanwhile, KMC Savills Managing Director Michael McCullough sees more developers going into the industrial space arena as they diversify their portfolios.

“Well, we’re starting to see some of the traditional office developers start dabbling into industrial, because that’s kind of the next phases: they want to diversify,” McCullough said.

The drive comes mainly from the long-term transaction stream offered by the industrial sector, as more investment comes in from Chinese investors in the coming years, he said.

“If you’re a developer and you can lock in cash flow for the next fifteen to thirty years with a high quality tenant. You can take that to the bank and they’ll give you a loan for your next project,” McCullough said.

As the Philippines gains more competitive edge as an investment destination, Colliers’ Bondoc expects the demand in the manufacturing sector to rise.

“The Philippines’ improving competitiveness as a manufacturing destination should enable the country to attract more investments, and this should result in higher demand for industrial space,” he said.

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