Lemcon PHL moves to ALogis warehouse
Asset management solutions company Lemcon Philippines has signed a deal with Ayala Land Logistics Holdings Corp. (ALLHC) to occupy 17,000 sq metres (182,900 sq ft) of warehouse space in ALogis Biñan, Laguna Technopark. The company will occupy 10 units of ready-built facilities for exclusive storage of infrastructure equipment for a telecommunications company. Acccording to ALLHC, Lemcon is scheduled to start operations in April for the initial 11,000 sq metres (118,400 sq feet) while the remaining 6,000 sq metres (64,600 sq feet) is projected to be turned over by July 2021.
Data from the Philippine Statistics Authority (PSA) show that the share of transport and storage to total Gross Value Added (GVA) reached 31% in 2020, a record-high from the 24% posted in 2019. Approved foreign investments from the sector also increased to PHP37.5 billion (USD772 million) in 2020 from PHP3.9 billion (USD80.3 million) in 2019. In our opinion, the healthy demand for the warehousing sector should be supported by the growth of the e-commerce industry and an economy that is primarily household-spending driven. Colliers encourages developers to modernize their facilities by adopting technological innovations such as automation, robotics and conveyor systems to offer better services and differentiate from their competitors. In the next 12 to 24 months, we project more retailers to firm up partnerships with warehouse developers and logistics firms. We expect developers maximizing opportunities brought by the growth of e-commerce through flexible warehousing, conversion of vacant mall spaces into micro-warehouses and construction of more cold storage facilities.
BGC-Ortigas link bridge component open by May
The Department of Public Works and Highways (DPWH) is set to start partial operations of the Bonifacio Global City (BGC)-Ortigas Link bridge by May 2021. The 1.4-kilometre (0.9-mi) project is expected to cut travel time between the two business districts to 12 minutes from 1 hour previously. According to DPWH, the project will improve accessibility between key cities in Metro Manila such as Pasig, Taguig, Makati and Mandaluyong as well as reduce traffic congestion in EDSA and C-5 once fully completed by September 2021.
The completion of the BGC-Ortigas link bridge will likely decongest the capital region, improve connectivity and spur economic activities between Ortigas CBD and Fort Bonifacio post-pandemic. Colliers believes that this project is also likely to raise land and property values across the two business districts. Based on the government’s infrastructure pipeline, other road projects scheduled for completion from 2021 to 2022 include the NLEX-SLEX Connector, Skyway SLEX Extension, Estrella-Pantaleon Bridge, Cavite-Laguna Expressway (CALAX), and the Binondo-Intramuros Bridge. In our view, these projects are likely to stoke the demand in the property sector and influence developers’ expansion strategies beyond 2021.
IT-BPM sector books $26-billion revenue in 2020
The information technology and the business process management (IT-BPM) sector did not post a growth in 2020, but only a measly decline despite the pandemic. According to SPi Global Senior Vice President Celeste Ilagan, industry revenues slightly dropped to USD26.2 billion (PHP1.2 trillion) in 2020 from USD26.3 billion in 2019 (PHP1.3 trillion), yet those employed remained at 1.3 million. In the first two months of the lockdown, productivity level of the sector was only at 50 percent. This gradually improved to 95% by the end of 2020 as outsourcing firms were able to implement a mix of work-from-home and on-site arrangements.
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In 2020, Colliers recorded 115,000 sq metres (1.2 million sq feet) of office deals from the outsourcing sector, down 74% from the 446,000 sq metres (4.8 million sq feet) posted in 2019. The pandemic has resulted in an uncertain office leasing environment in Metro Manila and has compelled outsourcing firms to rationalize office footprint as they implement alternative schemes such as remote working. Colliers believes that while most leasing activities are momentarily paused, some firms in the essential segment (e.g. healthcare and e-commerce) are still looking for office space. Colliers encourages landlords to expand tenants’ options by offering office space in non-core locations where rates are about 30% to 50% cheaper compared to major business districts. This is important for firms considering implementing a hub-and -spoke model for a more dispersed occupancy strategy during the pandemic.
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