Region IV-A (Calabarzon) has seen its economy expanding by an average of 9 percent yearly over the past two years, faster than the Philippines’ average growth. Aside from industrial and commercial activities, the corridor is also a major recipient of remittances from overseas Filipino workers (OFWs). These continue to keep the region’s economy afloat, fueling the demand for property segments such as office, residential, leisure and industrial.

The access from the capital region to the Cavite-Laguna-Batangas corridor ensured the seamless transport of goods from the region’s industrial parks to Manila Port.

This enabled Calabarzon to solidify its stature as the country’s major industrial hub, enticing national property firms to develop industrial parks and the complementing residential projects.

Due to the connectivity, the region saw the influx of large multinational exporters and manufacturers which further propped up Southern Luzon’s viability as a major industrial and manufacturing corridor.

But the expansion of manufacturing activities and the number of enterprises in the region require better infrastructure. We are optimistic that the major rail and expressway projects in the pipeline would support Southern Luzon’s expansion.

Hence, it is no longer surprising to see major developers acquiring large parcels of land in the region as they cash in on the economic corridor’s potential.

Evolution in PH property

Over the past few years, Southern Luzon has become the center of property developments, ranging from office, regional malls to condominiums.

The continued evolution of residents’ and investors’ preferences has resulted in further innovation and differentiation of property projects, with major townships that integrate the live-work-play-shop lifestyle now proliferating across the region.

What we are seeing in the Southern Luzon corridor is a microcosm of innovation and evolution in the Philippine property sector.

The demand for more office space resulted in the development of towers within integrated communities, indicative of the demand shifting from mere standalone office buildings. Take up from both outsourcing and traditional firms sustained office space absorption over the past few years with demand from non-outsourcing tenants growing on the back of an expanding regional economy.

We also see the office segment getting a push from offshore gaming demand.

Offshore gaming

With limited space available in Metro Manila, offshore gaming firms from China started to occupy space in Laguna and Cavite and this has had a positive impact on office and residential leasing in the region.

We see the offshore gaming demand being sustained at least for the next three years and this should continue driving the property market, including those of Cavite and Laguna.

Rising disposable incomes of families in Southern Luzon also compelled national developers to build larger malls and residential projects, both condominium and house and lots. We attribute this to the sustained flow of remittances from OFWs and the generation of more jobs from local businesses.

We, at Colliers International, have observed that over the past years, Cavite was merely a suburban support area to Metro Manila. Given its relatively cheaper housing costs, Cavite has attracted employees to settle within its boundaries but still commute daily to their jobs within Metro Manila.

The improvement of road networks enabled Cavite to come to its own as an urban center and rise from its previous image as a mere suburban support area to the capital region.

We see Cavite’s further development as a major property investment destination given the expected completion of key infrastructure projects such as LRT 1 extension, LRT 6, and Cavite-Laguna Expressway (Calax). These projects should provide necessary access to growth areas in Cavite and further raise Southern Luzon’s viability for township development.

Over the near to medium term, we see the development of more condominium projects here especially within integrated communities surrounded by vital infrastructure projects.

Sustaining growth

What works for Southern Luzon is the Duterte administration’s aggressive infrastructure program, complemented by its decentralization push.

The infrastructure projects implemented by previous administrations have dictated developer strategies. The implementation of key infrastructure projects nationwide has provided access to properties that could be redeveloped into mixed commercial, residential, hotel/leisure and industrial estates. These projects also helped the government bring economic opportunities in areas outside the country’s capital.

The heavy infrastructure spending committed by the government should also benefit the property sector. The annual infrastructure allocation of 5 to 7 percent of GDP should support the completion of Cavite-Laguna Expressway, LRT 6, Sangley airport, and the Cavite-C5 Southlink projects in the south. These should provide access to the integrated communities in the south.

Demand for integrated communities that house office, residential, leisure and institutional (schools and hospitals) developments have helped raise land values in the Southern Luzon region. Primarily an industrial hub, developers have started to take a second look at the region due to its viability for township projects that integrate the live-work-play-shop lifestyle.

Colliers further believes that developers should take advantage of the government’s thrust to intensify infrastructure development within and outside of the country’s capital.

The completion of public infrastructure projects should result in a more aggressive construction of townships. And Colliers sees a more pronounced development in Southern Luzon due to improving connectivity between these provinces and Metro Manila.

To cash in on the opportunities, developers must intensify efforts in terms of strategic landbanking and constantly look for developable land in the Cavite-Laguna-Batangas area.

Differentiation

In the increasingly competitive environment, developers need to distinguish their projects from others. Apart from the typical land uses such as office, residential, retail and hotel, developers in Southern Luzon should incorporate institutional uses such as education and healthcare as well as entertainment and recreational facilities for outdoor sports such as football and wakeboarding.

Overall, Colliers believes that the developers’ differentiation strategies are anchored on placemaking or the “multifaceted approach to the planning, design and management of public spaces.”

Under this method, developers assess each community’s distinct assets and potential and eventually build facilities that will maximize those features.

A well-thought-out placemaking strategy should keep people interested to stay in an integrated community.

Overall, placemaking should help transform places into destinations where people can synergistically converge. We expect to see this feature in South Luzon townships moving forward.

This article first appeared on The Philippine Daily Inquirer last October 19, 2019.