Property development for industrial use could become the “next big thing” given the slowdown in the country’s residential property market, real estate consultancy firm Prime Philippines said.
“Over the past three to five years, the residential sector has already reached its maturity,” said Jet Yu, managing director at Prime Philippines, during a real estate forum on Friday.
Growth of the residential property section has been followed by retail and the office sector. But lately, fewer condominiums are being built he said.
Meanwhile, countries such as China, Japan, and Taiwan are showing growing interest in setting up manufacturing operations in the Philippines, Yu noted.
“From what I’m exposed to, we get inquiries from Japan, China, Taiwan,” he said, adding that for the next five years, “we will see a lot in the industrial sector . . . firms from China, Taiwan, and Japan who are very eager to open their industrial facilities in the Philippines.”
These foreign investors, Yu said, have expressed interest in locating their manufacturing facilities in Davao City, the hometown of President Rodrigo Duterte.
“ . . . the hottest right now is Davao. The President has already mentioned that one of his priorities is to set up a manufacturing facility in Davao aside from infrastructure projects,” Yu said.
According to reports late last month, the Duterte administration is open to the idea of leasing land to foreign investors in the manufacturing sector.
Yu also noted that potential areas for industrial or manufacturing hubs would be located away from Metro Manila.
“Aside from Davao, we also have inquiries for Bulacan, Cavite, Laguna, and we also have in CDO. Mostly in those areas,” Yu explained.
Obstacles to investment
Despite the bright outlook for industrial property development, Yu said there are several factors that the government needs to tackle to encourage foreign investors to set up manufacturing operations in the country.
Among the major concerns of industrial companies that are considering investing in the Philippines are the high cost of electricity and water, as well as graft and corruption, Yu said.
If those challenges were addressed, Yu emphasized, the country would see more foreign investors leasing manufacturing facilities in the country in the next five years.
“If the current administration will really push to solve these factors, I don’t see any other reasons why these industrial companies from China, Taiwan, Japan will not venture to the Philippines,” Yu said.