The Philippines’ manufacturing sector is now experiencing a resurgence, as seen by the demand for industrial facilities during the last quarter of 2012 driven mostly by the relocation of multinational companies to the country.
Lease rates and land values in industrial sites are, however, likely to keep steady throughout the current year as landlords are inclined to keep their competitive edge through lower rents despite the anticipated increase in industrial locators.
These are among the insights contained in the 2012 year-end Market View report by CBRE Philippines. According to the real estate consulting firm, the country’s industrial property sector is experiencing a recovery since last year, fueled by the relocation of a number of Japanese, Korean, and Taiwanese manufacturing and industrial companies from China to the Philippines. The tension caused by territorial disputes between China and Japan and escalating labor costs in China’s industrial regions have pushed the companies to look for alternative sites for its operations.
Expecting an influx of manufacturing companies, the country’s four PEZA parks — the First Philippine Industrial Park, LiMA Technology Center, Laguna Technopark, and Light Industry and Science Park — are expanding their properties to accommodate the incoming firms. Subic and Clark are also undertaking the expansion and development of its industrial properties to support the growth.
In addition, developments of airports, seaports, and highways between the Clark and Subic Freeport Zones have opened up new areas of investment for the manufacturing industry. For example, property giant Ayala Land is currently developing a mixed-use development in Porac, Pampanga, that will feature sites for industrial facilities.
CBRE Philippines chairman Rick Santos added, “The resurgence of the manufacturing sector is an indication of renewed investor confidence. This is the best real estate market the Philippines has experienced in the past 20 years.”
