THE Philippine property sector was definitely not meek in the year of the sheep.
With the economy continuing to grow—about 6 percent in 2015 as per International Monetary Fund estimates—2015 saw property developers intently capitalizing on their gains in the past years and aggressively building projects that catered to more market segments, even widening their reach beyond the capital region.
“Without a doubt, this is a great time for the Philippine property market,” observed the Philippines chief economic planner Arsenio Balisacan, during a real estate summit in July.
The emergence of the township
The country last year witnessed the emergence of a new trend in property development—this thing called township, or master-planned, integrated, self-contained community development.
The concept even spread to various parts of the archipelago, far from the national capital region.
It was borne out of the market’s new needs—especially, with the lack of available land for development and hellish traffic in Metro Manila.
“Given the current infrastructure problems of Metro Manila, homeowners are increasingly inclined to purchase property or even a second home within the vicinity of their work,” explained Yves Luethi, vice president of KMC MAG Group, the Philippine associate of global property services firm Savills.
“The growth of townships—or self-contained districts that fuse together homes, offices, shops, and schools in linked communities—are particularly attractive not only to affluent buyers, but also young professionals who choose to live near their workplaces,” Balisacan noted, alluding to youthful workforce of the booming outsourcing business.
“Township is one of the big stories for real estate in 2015,” remarked Julius Guevara, director for research and advisory of Colliers International. “In Metro Manila, you find Ayala Land, Megaworld, and other developers pursue their own master planned communities.”
Giant developer Megaworld Corporation made use of the township concept the most. It launched five township developments all in 2015—the Sta. Barbara Heights in Iloilo, the Upper East and Northill Gateway both in Bacolod, Westside City in the Bay City in Paranaque, and an unnamed township in San Fernando Pampanga.
The company claims to be the pioneer in township development in the Philippines, as it built Eastwood City, a 17-hectare luxury commercial and residential development in what used to be a quite place in Quezon City, named Bagumbayan, in 1997.
Branded by Megaworld as “a city within a city,” Eastwood City now houses around 25,000 residents and large offices for multinationals IBM, Citigroup, and Accenture—making it a pioneer location for the now booming Business Process Outsourcing industry.
Property giant Ayala Land, Inc. cannot be left behind. Dubbed by Pinnacle Real Estate Consulting Services, Inc. as the leader of the biggies—or the six-pound gorillas of Philippine real estate—it launched two townships in 2015—the Cloverleaf in Balintawak, Quezon City and Capitol Central in Bacolod City.
Still being developed is Ayala Land’s Circuit Makati, a riverfront redevelopment project on the site of the former Santa Ana Race Track in Makati. The 21-hectare site is planned to contain a mixed-use entertainment complex, which would include an outdoor theater, a shopping mall, hotels, and residential and office skyscrapers. Envisioned to become Makati’s lifestyle hub, the planned development would also have a football turf, a skate park, and an outdoor entertainment area.
“Developers are now moving into community mall formats, which may enable them to capture latent demand in other areas of Metro Manila,” noted global property advisor Cushman and Wakefield.
Former Senator Manuel Villar’s listed firm Vista Land Lifescape Corp. also went with the flow, although preferring to call township “communicity”. It launched Vista City in Iloilo, complete with residences, malls, offices, a hospital and even churches.
Listed mass housing builder 8990 Holdings did not shy away from the trend, launching a township project composed of low-cost condominium units in Tondo, Manila.
Guevara noted that the township trend has spread to different parts of the country, where the desire to live in a mixed-use development has grown.
“Furthermore, with the slowdown of the condominium market in Metro Manila, developers have scrambled to look for other areas, and pursuing township developments in areas in Visayas and Mindanao has been a key strategy,” he noted.
In December, Robinsons Land Corp. (RLC) launched its Robinsons Galleria Cebu, the country’s first garden mall that would highlight homegrown products, local architecture, and outsourced jobs for the people of Cebu.
The upcoming mall is part of a 4.7-hectare mixed-use development that aims to “reinvent, revitalize, and increase property values in an area of Cebu that was previously under-utililized,” according to RLC.
Aside from the mall, the development will offer three residential condominiums, additional office buildings, and a hotel.
The rise of green buildings
Another real estate trend that emerged last year was the integration of green or eco-friendly elements into buildings, mostly seen in the office market.
KMC Mag Group managing director Michael McCullough said the green development trend is not only a way to make urban centers healthy and sustainable. He said this could also be a way for developers to command higher rental rates.
“There are a lot of benefits to building or investing in green buildings, such as being able to provide a healthier workplace for employees and increasing savings and cost-efficiency,” said McCullough.
He said green buildings use 25 percent less energy, which cuts down up to 19 percent of operational expenses. He said such buildings have an average increase in return of investment of about 19.2 percent.
“These benefits make these buildings more attractive to multinational companies, which are increasingly looking for spaces that will reflect their sustainability commitments,” said McCullough.
In Metro Manila alone, there are 22 buildings in Makati and Bonifacio Global City that are either applying for the Leadership in Energy & Environmental Design (LEED) or are already pre-certified.
LEED is a certification given by the US Green Building Council (USGBC) and is used worldwide as a comprehensive assessment tool for sustainability in environmental design and performance of buildings.