REAL estate experts are seeing an imminent resurgence of the industrial property sector—particularly, logistics and warehouses—as the trend, they said, started to surface in the second half of 2015.
In its recently released fourth quarter 2015 report, global property advisor Colliers International said prices for manufacturing and warehousing sites—particularly in Cavite, Laguna, and Batangas—continued to increase in the latter part of 2015, as lack of available warehouses in the capital region pumped up demand.
Colliers said monthly land lease rates in these industrial areas went up 7.87 percent from P55 in the first half of 2015 to P59 per square meter by yearend.
Similarly, leasehold rates for warehouses and logistics facilities rose edged up 1.87 percent to P218 per square meter per month, Colliers said.
“Colliers anticipates that industrial land and building leasehold rates will continue to grow in 2016, considering the lack of sites for industrial uses within Metro Manila amid a growing population and increasing consumption,” the report stated. “Average land values are expected to appreciate in the next 12 months, as strong demand for industrial lots will influence developers to adjust their prices upwards.”
Colliers foresees the demand for industrial stock to further increase this year, as the Philippine Economic Zone Authority expects to secure more investments from Asian manufacturers.
“This would be a substantial driver for the resurging manufacturing sector, given that the sector is one of the leading GDP growth contributors in 4Q2015,” the Colliers report said.
Julius Guevara, Colliers’ director for research and advisory, said the lack of warehouses in Metro Manila resulted from the conversion of these properties into other uses, to answer more obvious market demands like for commercial developments.
“A lot of warehousing properties were converted into residential and mixed-use developments in the previous years, especially along SLEX (South Luzon Expressway), Manila, Pasig, Makati, and along C5,” Guevara noted. “They’re slowly being converted into mixed-uses, which is slowly pushing warehousing out of Metro Manila, and it’s now more difficult to serve your consumers.”
Guevara said the increase in income from various industries would drive demand for the retail sector, which, in turn, would result in the need for more warehousing.
Claro Cordero Jr., head of research and consultancy of another global property advisor, Jones Lang Lasalle, echoed such insight, likewise predicting the comeback of the industrial property as a major real estate segment.
“The industrial market, after more than a decade, being in the lagged subsector in real estate, may now have come back to be a major sector,” Cordero told The Manila Times.
Cordero said the rise of the industrial market—specifically, logistics and warehouse facilities—is a “direct result” of consumer spending power and the development of urban centers.
“As you develop more of these communities and urban centers, you need to service all the retail needs for consumer-driven services, and that means we need more of these logistics and warehouse facilities, so that the inventories and the stock are nearer to the market,” Cordero said.