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Manila Market Intelligence: October 27, 2020

october-27-2020

Rockwell gains foothold in Angeles, Pampanga 

NEWS

Rockwell Land Corp. is partnering with TGN Realty to develop a 3.6-hectare mixed-use community in Angeles, Pampanga. The property developer said that the project will have three residential towers and these will be complemented by a mall – the Power Plant Mall of Angeles. The residential inventory is estimated to be worth P6.7 billion. According to Rockwell Land each residential tower will be 10 to 15 storeys high. The units range from one bedroom to three bedrooms with cuts from 44 square meters to 142 square meters. The mixed-use project is likely to be launched in H2 2021.

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RESEARCH VIEW

In our view, the government’s active infrastructure implementation and decentralisation programme is encouraging developers to look closely at Pampanga, notably Clark Freeport and adjacent cities and municipalities. We think the Clark-Angeles-San Fernando corridor (Metro Clark) has high potential to become a key property investment hub outside Metro Manila. We see opportunities for office and residential segments. Meanwhile, developers are starting to line up leisure and retail segments and plan to tap demand once the pandemic wanes and market sentiment recovers. Given the relatively cheap developable land in the area, Colliers believes that the development of integrated communities is a practical route for many developers. Among our recommendations to national developers are the redevelopment of brownfield assets and old office and retail buildings especially in downtown Angeles and San Fernando; explore opportunities in the fringes of Metro Clark; and firm up partnerships with Pampanga-based landlords for strategic landbanking.

AREIT buys Ayala Malls The 30th, raises funds for more buyouts

NEWS

AREIT has acquired Ayala Malls The 30th for P5.1 billion. The mall is located in a 76,000 sq metre lot along Meralco Avenue in Pasig City. Once the transaction is completed, AREIT’s total floor space would increase to 246,000 sq metres. The company added that the asset will contribute to its net income and dividends in 2021. Aside from Ayala Malls The 30th, AREIT also owns the Teleperformance Cebu building,  Solaris One, Ayala North Exchange and McKinley Exchange office towers.

 

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RESEARCH VIEW

Colliers sees greater interest in the implementation of the REIT law following the signing of the measure’s amended implementing rules and regulations (IRR) and Ayala Land’s Inc.'s (ALI) successful REIT launch. We expect AREIT's move to entice national and provincial players to follow suit. Colliers recommends that developers use REITs to access a cheaper source of capital and renovate and reposition assets such as offices, malls, and warehouses. We also encourage provincial players that meet the capitalization requirement to tap REIT. Colliers believes that the full implementation of REITs places the Philippines at par with other Asian economies that have well developed and integrated capital and real estate markets. In our view,  REIT implementation in the Philippines will likely result in the further differentiation and innovation of domestic property development projects which should eventually benefit Filipino investors and end-users.

FedEx Express allots $30M for Clark gateway facility

NEWS

Fedex Express announced that it is scheduled to open an international gateway facility in Clark in April 2021. The USD30 million (PHP1.5 billion) 17,000 sq metre (182,900 sq feet) facility is projected to raise the company’s sorting capabilities to about 9,000 documents and parcels per hour. FedEx added that the new facility will also likely reduce delivery time to Northern Luzon and allow the extension of the cut-off time for Cebu and Northern Luzon customers. The completion of the Clark International Airport modernization project would also drive the company’s expanding operations and help the firm serve more customers across the country.

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RESEARCH VIEW

In our opinion, the new international gateway facility in Clark will likely improve efficiency of logistics operations in northern Luzon. Colliers believes that that the completion of the Clark International Airport Expansion project should entice other logistics, information and technology, tourism and outsourcing firms to consider Clark for their operations. The improved connectivity should also spur more economic activities and eventually drive the demand for offices, residential and industrial spaces and warehouses in the northern Luzon corridor. Colliers sees the completion of other infrastructure projects such as Skyway 3,Clark-Malolos Passenger Railway, NLEX-SLEX connector and the Subic-Clark Railway further boosting the region’s attractiveness for logistics-related investments post-pandemic.

 

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Related Experts

Joey Bondoc

Associate Director

Research

Manila

Prior to joining Colliers in March 2016, Joey worked as a Research Manager for a research and consutancy firm where he handled business, political, and macroeconomic analysis. He took part in a number of consultancy projects with multilateral agencies and provided research support and policy recommendations to key government officials and top executives of MNCs in the Philippines.

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