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Davao to remain an attractive property investment hub beyond Duterte

Colliers believes that Davao will remain an attractive property investment destination due to the economic impact of increased infrastructure spending and renewed investor interest.

Manila, 30 October 2019 – The Philippine government’s ambitious infrastructure plan is being anchored by its decentralization push. The traffic congestion in Metro Manila has compelled the national government to improve infrastructure connectivity and establish more business hubs outside of the capital region. Colliers believes that the Duterte administration’s ambitious infrastructure implementation and decentralization thrust should offset the potential impact of the moratorium on ecozone approvals in Metro Manila. Colliers believes that Davao will remain an attractive property investment destination in light of the infrastructure and property development projects lined up by the government and private developers. 

Based on the government’s infrastructure plan, Colliers expects Metro Clark, Metro Cebu, Iloilo, Bacolod, and Bulacan to also benefit from the Duterte administration’s infrastructure push. This should result in a more buoyant property market in these areas.

Colliers expects Davao to remain an attractive location for tourists and business travelers even after the current president’s term, due to the economic impact of increased infrastructure spending and renewed investor interest.

Davao is one of only three Philippine cities that are in Tholons Services Globalization Index (TSGI) list of Top 100 outsourcing hubs in the world. The city has long been a key business hub in the Mindanao group of islands in the southern Philippines, but this was boosted by the election of President Duterte, who served as Davao City’s mayor for 22 years.

The office projects are being complemented by new condominium units within integrated communities being developed by both national and Davao based property firms. Among the major developers expanding property projects in Davao are Ayala Land, Megaworld, and Cebu Landmasters. Colliers projects more township developments in Davao City with the completion of Davao Coastal and Bypass roads; the Mindanao Passenger Railway; and expansion and modernization of Davao International Airport.

These projects should further enhance Davao City’s competitiveness as a property investment hub and ensure its attractiveness even beyond the term of President Duterte. Udenna Corporation president Dennis Uy has expressed his plan to modernize Davao International Airport. In our opinion, it’s only a matter of time before Uy’s Udenna Corporation maximizes its operation of the Davao Airport. We see the firm aggressively expanding its footprint in the city and its environs similar to its strategic acquisition of land
in Metro Clark. 

Aside from the Davao Airport expansion, other infrastructure projects likely to sustain the demand for township projects in Davao City are the Davao coastal and bypass roads and the Mindanao Railway. 

These public projects are due to be completed between 2021 and 2025 and are likely to contribute to higher land and property prices in Davao in the next few years. These projects should also complement national and Davao-based developers’ plans for township development.

The completion of infrastructure projects such as airports, seaports, expressways, and railways should bode well for both developers and occupiers. We recommend that developers take advantage of the increased infrastructure spending by:

Strategic acquisition of land outside Metro Manila such as Cebu, Pampanga, Bulacan, and Davao;

Differentiating projects as the market becomes increasingly competitive. Aside from the typical office and residential projects, developers should consider featuring other projects such as malls, hospitals, and schools within their townships; and

Partnering with national players. Homegrown developers with massive land in the provinces should tie up with national players that have extensive experience in developing integrated communities.