Aggressive infrastructure roll out to drive opportunities for developers

The Philippine government’s push for infrastructure development is seen to create opportunities for the property market which could aid its recovery.

In a flash report, property services firm Colliers Philippines said the implementation of major infrastructure projects is expected to play an important role in reviving the Philippine property market.

“The completion of toll roads, cargo railways, subways, and airports will play a major role in paving the proverbial road to recovery,”Colliers said.

“In our view, office and condominium developers should maximize their projects’ proximity to these infrastructure projects which are scheduled to be completed in 12 to 36 months,” it added.

While the country’s infrastructure spending dropped 23 percent to P681 billion in 2020 as funds were realigned as part of the pandemic response, the government is planning to ramp this up by spending at least P1.17 trillion or 5.9 percent of the GDP this year.

The government has allocated a portion of the national budget to support infrastructure projects this year, particularly P87.9 billion for the Department of Transportation (DOTr) and about P695.7 billion for the Department of Public Works and Highways (DPWH).

“In our view, the construction of public infrastructure projects will likely further stoke demand in the property sector,” Colliers said.

Among the projects scheduled to be completed within 2021 include the MRT-LRT Common Station in Quezon City, the MRT-3 rehabilitation, LRT-2 East Extension, Bonifacio Global City (BGC)-Ortigas Link Bridge, and the Skyway SLEX extension.

Colliers is urging property developers to capitalize on the government’s push for infrastructure development by pursuing strategic land banking in areas outside of Metro Manila as infrastructure spending should enable decentralization from the urban core to the provinces around Metro Manila.

It also recommended developers to highlight the proximity of office, residential, and industrial properties to public infrastructure projects.

Moreover, the expansion of industrial hubs given the resurgence of the manufacturing sector and the rising demand for warehouses and similar facilities is also seen as an opportunity for developers.