P68.2-B MRT7 now 61% complete
The Department of Transportation (DOTr) announced that the PHP68.2 billion (USD1.4 billion) Metro Rail Transit Line 7 (MRT-7) is now 61% complete and is scheduled to begin partial operations by April 2022. The 22-kilometer railway project runs from North Avenue, Quezon City, to San Jose Del Monte, Bulacan. Once completed, the mass transport system is expected to reduce travel time between Quezon City and Bulacan from 2–3 hours to 35 minutes. It will also accommodate about 300,000 to 850,000 passengers daily. The MRT-7 is projected to be fully operational by Q4 2022.
The MRT Line 7 is one of the government’s initiatives to help ease traffic congestion. It should help unlock land values, raise property prices, and spur economic activities especially in Bulacan. Other infrastructure projects likely to be completed in the next 12 to 36 months are the Metro Manila Subway, MRT-3 Rehabilitation, LRT-1 Cavite Extension, and the Clark Railway project. This infrastructure push should encourage a more aggressive land-banking strategy from property firms. In our view, this infrastructure push is also likely to support the development of more integrated communities in urban areas outside Metro Manila.
Filinvest Land plans expansion in Cebu
Filinvest Land Inc. (FLI) said that they are planning to expand their presence in Cebu through office and integrated communities as it sees opportunities in the growing outsourcing sector. FLI is hopeful that the completion of infrastructure projects such as the Cebu–Cordova Link Expressway should spur more economic activity in the area. FLI added that its office and township projects in Cebu could potentially be added to their Real Estate Investment Trust (REIT) portfolio.
In H1 2021, office transactions in Cebu reached 19,700 square meters (212,000 square feet), up 140% from the 8,200 square meters (88,200 square feet) recorded in H1 2020. In our view, the successful roll-out of the COVID-19 vaccine will likely play a pivotal role in the recovery of office leasing in Cebu. Colliers encourages tenants to take advantage of concessions such as locking in lower rents in exchange for longer lease terms and the availability of new office spaces. Meanwhile, landlords should highlight the availability of PEZA spaces and Cebu’s competitiveness as an outsourcing site. In our view, developers continue to expand in Cebu to take advantage of infrastructure projects and pent-up demand for office spaces and residential projects. At present, Cebu is one of the most attractive locations for outsourcing activities in the country and is the largest residential hub outside of Metro Manila.
Novel Residential Concepts Inc. has introduced an investment package for Ridgewood Premier Hotel, which is likely to open by 2023. The 168-room hotel along C5 Road in Fort Bonifacio will likely offer a 6% annual return on investment as well as a 6% performance bonus based on hotel occupancy for investors. The hotel offers units from a standard suite to a two-bedroom suite with sizes ranging from 24.8 to 55.7 square meters and is priced between PHP3.6 million and PHP7 million.
Data from the Department of Tourism (DOT) showed that foreign arrivals as of 4M 2021 reached 35,419, down 97% from the 1.4 million arrivals recorded in 4M 2020 due to the travel restrictions imposed by the government. This has resulted in hotel occupancies only reaching 24% in H1 2021 from 20% in H2 2020. These are much lower compared to pre-pandemic occupancy levels of between 60% and 70%. To maximize the sector’s recovery beyond 2021, Colliers recommends that hotel operators implement trainings and refresher programs to prepare staff for the new normal, provide flexibility in guests’ bookings, and adopt a multiple-use model to cater to both leisure and quarantine guests.