Manila, February 26, 2019 - Metro Manila’s potential for economic expansion has been constricted by a poor infrastructure network brought about by decades of neglect and underspending. The current administration is addressing this by identifying major infrastructure projects that will be built in Metro Manila over the next three to seven years. Among the infrastructure projects that the government intends to develop is the Manila Subway system. The ground-breaking for the subway’s first three stations is scheduled on February 27, and we see this benefiting Quezon City property over the near to medium term.
The implementation of the PHP350 billion (USD6.5 million) subway should help provide access to properties that could be redeveloped into mixed commercial, residential, hotel, and institutional projects. Colliers sees the project raising the prices of land and properties within a kilometer from the subway’s stations. Colliers recommends that private developers take advantage of the government’s infrastructure thrust by implementing the following:
> Strategic land banking around the subway’s stations
> Complementing the subway project’s stations by building own infrastructure
> Tying up with other property firms for a unique development mix
> Redeveloping brownfield assets
> Partnering with the government that own developable parcels of land or buying back properties previously donated to the government
> Assessing the type of projects to pursue per station
Colliers believes that working with the national government for the development of commercial and residential buildings around the stations of the Manila Subway is a practical route for property developers given the lack of developable land in the country’s capital. In our opinion, this option is something that the government should seriously consider given its goal of raising additional revenues to fund its massive social and infrastructure programs, especially now that the remaining tax reform measures have yet to be passed in Congress. This way, the government gets additional revenues crucial for its “Build, Build, Build” (BBB) program and spurs more business activities in the newly-established business districts, which should eventually generate more jobs and tax revenues.
Quezon City poised to benefit from Subway construction
The proposed Manila Subway will cover 14 stations from Quirino Avenue in Quezon City to Ninoy Aquino International Airport in Pasay City. In our opinion, the subway should play an important role in dictating private developer strategies in Metro Manila.
Colliers sees Quezon City benefitting from the planned subway as seven of the 14 stations will be developed within the city. With improving connectivity given the construction of Manila Subway, MRT-7 and the common LRT-MRT station, we see Quezon City becoming more attractive for mixed-use projects that feature office, residential, and retail projects. Among the stations well suited for townships is North Avenue given its interconnection with other mass transportation systems. We see Quirino and Tandang Sora stations providing residential support to offices in the North Avenue station. The latter is also a practical choice for hotel projects as we see it capturing demand from Northern Metro Manila and nearby provinces such as Bulacan.
We see gentrification in the area around Anonas station as the improved access should encourage developers to build more low- to mid-rise residential condominiums and shophouse retail projects and entice middle- to upper-middle class families in the area to upgrade to condominium living. The East Avenue station would be a feasible location for more institutional projects such as schools and hospitals while the Quezon Avenue station should serve as an extension of commercial activities along North Avenue. Meanwhile, we see the Katipunan area as having the least potential for redevelopment due to limited developable land.