The industrial market has been the most stable real estate asset class since the pandemic started and is seen to even grow further, driven by the demand for cold storage, a property services firm said.
“Cold storage is set to become one of the next popular investment sectors in Philippine property as demand for vaccines, foods, and import goods drive activity in cold chain logistics,” Santos Knight Frank (SKF) said in a statement.
In a recent webinar, Cold Chain Association of the Philippines president Anthony Dizon said that the Philippine cold storage industry’s capacity is set to grow by 10 percent this year.
He added that around 50,000 new pallets are to be commissioned this year that will add to the existing 500,000 pallets across the country.
Dizon said 60 percent of the additional capacity will be in Luzon while 40 percent will be in Mindanao.
“The need for cold chain capacity should continue to grow as a function of population growth, economic recovery and consumption preferences, with special attention to the continuing development of e-commerce platforms,” Dizon said.
He added that cold storage is one of the most resilient industries as there will always be a need for food.
SKF emphasized that the growth of the cold storage industry goes hand-in-hand with the overall expansion of industrial and logistics real estate.
“The property landscape has experienced a tremendous shift since the pandemic, yet the industrial and logistics real estate sector, including cold storage, remains to be the most stable asset globally. In the Philippines, more investors are looking to place significant capital into the industrial sector, including cold chain logistics,” said SKF Head of Investment & Capital Markets Kash Salvador.
To further unlock real estate opportunities for industrial and logistics, Salvador recommends property owners and landlords to explore converting their existing non-core assets near Metro Manila for industrial and logistics use.
“In Metro Manila, the former industrial areas have been converted into commercial properties, limiting the options for locators in the city.While there are opportunities outside Metro Manila, locators are balancing the costs between staying within the city and exploring provincial areas, considering aspects such as connectivity, infrastructure, and power,”Salvador said.
He added that this presents property owners with a huge opportunity to cater to these occupiers.
“Overall, the strong demand for industrial and logistics is key to recovery. It not only helps the real estate sector but also increases the economic activity across the country,”Salvador said.