More developers flocking to ‘new wave cities’ – CBRE

MANILA, Philippines - Amid demand for real estate, a tightening supply of land in the metro is pushing developers to explore other locations known as “new wave cities,” property consultancy services firm CBRE Philippines said.

Fringes of Metro Manila such as Sta.Rosa, Clark, Cebu, Iloilo and Davao are becoming potential growth areas where various mixed-use projects are being created, the firm said.

According to CBRE, among the factors that help influence the rise of different developments include convenience, accessibility, cost competitiveness, availability of labor and government support.

“Actualizing the potential of new wave cities through strategic utilization of resources in these areas can increase the chances of these areas as the next home of local and foreign companies,” CBRE chairman and chief executive Rick Santos said.

On top of these emerging cities is Clark in Pampanga which is strategically located in Northern Luzon and is being underscored by CBRE as a vital new wave city and a potential business process outsourcing (BPO) hub.

“CBRE underscores Clark’s potential as a BPO hub because of its accessibility through air, land, and sea, available developable land, government incentives, and a skilled English-speaking labor pool,” Santos added.

BPO revenues grew 18 percent in 2014 and is seen to overtake remittances from overseas, Filipino workers while top BPO companies, including Accenture and Convergys, are already expanding into the provinces.

Total BPO office occupancy rate for the five business districts (Makati, Fort Bonifacio, Alabang, Quezon City and Ortigas) is pegged at 97.10 percent for the second quarter of 2015.

Meanwhile, office lease rates in Clark still are lower compared to that of other cities within Metro Manila.

The company is expecting that real estate developments in Clark will draw business investors in the area especially when commercial space becomes available in Global Gateway Logistics City (GGLC) and expansion of SM City Clark is completed with a total of 144,120 square meters available new office space next year.

Furthemore, anticipated takeup from BPOs is also expected to increase demands in residential and retail sectors, as well as to push infrastructure improvement efforts of the government and other private companies.

“From North to South, the emergence of these cities can simultaneously help boost the attractiveness of the Philippines as an investment destination,” Santos said.

CBRE also remains bullish in Philippine real estate market for the second half of 2015 on the back of strong macroeconomic fundamentals and continued growth and demand across all real estate sectors.

CBRE said demand for office, retail, residential, industrial and most especially in the BPO sector continue to rise alongside infrastructure project implementations and government programs in and out of the metro.

The company added that top developers in the country such as Ayala Land and Megaworld among others experienced double-digit growth for the first semester of the year, signifying higher demand for properties.