Makati, July 11, 2017 – Colliers International has noted that land values in reclaimed areas have significantly increased due to the growing appetite for office, residential, and retail projects. Coupled with the lack of developable land in established business districts in Metro Manila, this compels developers to look for alternative landbanking options. The popularity of reclaimed developments in the Manila Bay Area such as Aseana City is gaining traction among developers and this reinforces the viability of reclaimed land as a highly feasible landbanking strategy.
Aside from outsourcing firms, traditional companies engaged in logistics, advertising, construction, online shopping, and consultancy have aggressively been expanding on the back of a 6.3% annual economic growth recorded over the past six years. The Philippine economy is projected to grow between 6% and 7% per annum over the medium term and this should help sustain the BPO and traditional firms’ demand for office space within the country’s capital. Currently, office space vacancies in Makati Central Business District (CBD) and Fort Bonifacio hover between 1% and 3%. “The strong demand for office buildings will be complemented by residential and retail projects hence the need to reclaim more developable land,” said Paul Vincent Ramirez, Colliers International Philippines director for Valuation.
“As developable land in Metro Manila’s major business districts becomes scarce and prices continue to surge, it is only practical for developers to look for viable landbanking alternatives such as reclaimed land in the Manila Bay Area,” Ramirez added. Reclaimed land in the Manila Bay Area ranges between P200,000 to P250,000 per sq m, growing by an average of 30% annually over the past five years. Meanwhile, land in Makati CBD and Fort Bonifacio hovers between PHP500,000 to PHP600,000 per sq m, rising by about 15-20% per annum during the same period. While the value of land in the Manila Bay Area is significantly higher than the original cost of reclaiming land (PHP10,000 to PHP20,000 per sq m), acquiring land in the reclaimed area remains financially viable given the 40% difference in cost compared to land in established business hubs across the country’s capital.
The surging demand for office, residential, and retail projects is pushing conglomerates to be more aggressive in reclaiming land in the Manila Bay Area. At present, there are five active reclamation projects in the area and these include the following:
- The 407-hectare New Manila Bay City of Pearl project that will be developed by a consortium led by UAA Kinming Group Development Corp. and its foreign partners. Aside from typical township features such as office, residential, educational, retail, and medical projects the integrated community will also house a driverless monorail, an 8,000-seat multi-purpose stadium and an 18-hole golf course.
- The Manila Solar City Project which will reclaim 148 hectares of the waterfront, stretching from the Cultural Center of the Philippines (CCP) to the United States embassy. The PHP23.6 billion project is envisioned as an entertainment hub that will have the first international cruise ship terminal in the country.
- The 360-hectare Pasay City Reclamation Project covers the foreshore and onshore Manila Bay area within the city’s jurisdiction. It is near the existing Mall of Asia Complex, just across the Libertad Channel. The estimated reclamation cost is around PHP57.5 billion.
- The 650-hectare Navotas City Coastal Bay Development Project, also known as the Navotas North Bay Business Park Project. The PHP103.8-billion project will be developed around the proposed floating expressway that will connect the province of Bataan to Manila.
- The Las Piñas-Parañaque Coastal Bay Reclamation Project involves the reclamation of 635 hectares of shallow coastal area stretching from Asia World Properties to the municipality of Bacoor in the province of Cavite. It is near the Las Piñas-Parañaque Critical Habitat and Ecotourism Area (LPPCHEA). The PHP101-billion project, once completed, will be developed as a mixed use project that will apportion space for commercial, residential, industrial, institutional, and educational zones.
The development of mixed-use communities across Metro Manila is becoming more popular as these projects integrate the live-work-play-shop lifestyle. The reclaimed land in the Manila Bay Area is a feasible option for mixed-use projects as shown by the growing popularity of D.M. Wenceslao’s Aseana City.
The viability of mixed-use projects in the reclaimed Manila Bay Area is strengthened by the mix of completed and proposed public infrastructure projects nearby including the NAIA Expressway, Light Rail Transit (LRT) 1 Cavite Extension, Southwest Integrated Terminal, Sangley Airport, and Metro Manila subway.
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