Yamaha allots nearly P3 billion for manufacturing expansion
Yamaha Motors Philippines Inc. said that they will likely spend PHP2.7 billion (USD56.7 million) for their factory expansion at the Lima Technology Center in Batangas to increase production of their motorcycle units. Yamaha has observed an increase in the demand for its automatic models as public transportation was limited during the lockdown. Yamaha Philippines President Hiroshi Koike added that the new factory will result in the generation of about 1,300 jobs. Data from the Motorcycle Development Program Participants Association (MDPPA) show that product sales dropped by 33% to 941,260 units in 10M 2020 compared to 10M 2019 due to the pandemic.
Data from the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) and Truck Manufacturers Association (TMA) show that vehicles sales in the country declined by 39.5% to 223,790 units in 2020 from 369,940 units in 2019. The decline was indicative of the significant impact of COVID-19 on the automotive industry. In H2 2020, we have observed automotive manufacturers that opted to sell their property or move out of Cavite which partially contributed to the 6.0% vacancy in the province, from 5.6% in H1 2020. Despite the impact of COVID-19, certain manufacturers remain optimistic about the recovery of the automotive industry. Data from the Bangko Sentral ng Pilipinas (BSP) or central bank show that IHS Markit’s Manufacturing Purchasing Managers' Index (PMI) rose to 52.5 in February 2021, from 49.2 in December 2020. The above 50 rating indicates an improvement in factory activity and expansion of the manufacturing sector. This should further support the expansion plans of manufacturers and benefit the industrial sector of the country.
MetroPac Movers Inc begins construction of its Sta. Rosa logistics hub
MetroPac Movers Inc. (MMI) started the construction of its 52,000 sq metre (559,700 sq feet) dry goods and cold storage facility in Laguna along the Sta. Rosa-Tagaytay Road. Once completed in Q4 2021, the facility will likely offer 41,000 pallets for warehousing and 17,500 pallets for cold storage. It also features 65 truck docks, biometrics, and Closed-circuit Television (CCTV) cameras for security. MMI is constructing the logistics hub following a sustainable design to ensure business continuity of locators. Blue Yonder Warehouse Management System, a management platform, will run the facility once it opens. MMI expects the facility to generate 550 jobs in Laguna which should help support the province.
Data from the Philippine Statistics Authority (PSA) show that the manufacturing, transportation and storage sectors accounted for 67% of total approved investments in 9M 2020, an increase from only 16.9% in 2019. In our opinion, the Cavite-Laguna-Batangas (CALABA) industrial zone will likely to benefit from these investments. Colliers has also observed that there is a growing demand for logistics and warehousing. This will likely be supported by the growth of e-commerce and an economy that is primarily household-spending driven. In Metro Manila, we see about 179,800 sq metres (1.9 million sq feet) of warehouse space will likely be offered starting Q4 2020. Despite the higher rental rates near business districts, firms continue to locate due to its convenience and accessibility of high-density commercial areas. Average monthly rental rates for warehouses in the capital region range from PHP220 to PHP570 (USD5 to USD12) per sq metre, higher than the PHP120 to PHP400 (USD3 to USD8) for CALABA. Colliers recommends that developers construct more cold storage and warehouse facilities as demand in areas such as Metro Manila, Pampanga and CALABA remains underserved. We expect that the demand will likely be driven by the growth of deliveries of perishable food items, groceries and the government’s anti-COVID-19 vaccination program.
DMCI launches 2nd tower of Pasig City condo
DMCI Homes has launched the second tower of its Allegra Garden Place condominium in Pasig City as they anticipate and improvement in residential demand. DMCI Homes Vice President Dennis Yap said that the project is likely to benefit from the upcoming BGC-Ortigas Link Bridge that will connect Pasig, Taguig, Mandaluyong and Makati which will likely be completed this year. He added that the Metro Manila Subway project will also be close to the project with patrial operations targeted by the end of 2021. Allegra Garden Place offers studio to 3-bedroom units with prices starting from PHP4.31 million (USD88,500). The project will also include a multi-purpose court, roof garden and a gym. Scheduled turnover of the first tower is in July 2024, while the second tower in July 2025.
In 2020, launches in the Metro Manila pre-selling condominium market reached 21,000 units, down 56% from 49,000 units in 2019. Take-up during the period also declined by 34% to 31,000 units. Despite the lower take-up, mid-income to luxury projects (PHP3.2 million or USD66,700 and above) contributed 86% to total take-up in 2020, up from 72% in 2019. In Pasig City, projects under this segment made up 77% of take-up annually from 2016 to 2020, up from the 63% average from 2011 to 2015. We believe that developers should monitor these attractive price segments as demand will likely be driven by mid-income to luxury projects starting 2021. Aside from Pasig City, attractive locations for this segment include Parañaque, Mandaluyong, Alabang-Las Piñas, and the Bay Area.
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