This week, Colliers Research provides insights on Sta. Lucia Land’s plan to acquire more assets for the company’s future developments; CentralHub completing its 6.2-hectare industrial warehouse in Tarlac; and W Group aiming to ramp up expansion this year as it seeks to attract more e-commerce firms.
Sta. Lucia to acquire more land, forge joint ventures
SUMMARY
Sta. Lucia Land is eyeing to acquire 78.5 hectares of land located in key growth areas in Davao, Rizal, Laguna, Batangas, and Pangasinan. Its board also approved the company’s formation of joint ventures, which will develop a 59.3-hectare land spanning across Batangas, Cavite, Laguna, and Rizal. The board has given a green light to the company’s plan to tap credit facilities up to PHP1.5 billion (USD29.4 million) from banks and financial institutions to finance its land acquisition and future project developments. To date, the developer has already built more than 250 projects across the country.
RESEARCH VIEW
Developers should look at the viability of launching more horizontal projects in key provinces, such as Pampanga, Bulacan, Tarlac, Cavite, Laguna, and Batangas. Despite the impact of the pandemic, we have observed take-up rates of between 89% to 95% for horizontal units in these locations as of H1 2021. We recommend that developers continue highlighting projects outside of Metro Manila. Developers that plan on expanding their projects should implement strategic landbanking near upcoming infrastructure projects such as the SLEX Toll Road 4 and the Cavite–Laguna Expressway (CALAX), which will likely be operational in the next 12 to 24 months. Once completed, these projects should reduce travel time to key provinces making them more accessible to buyers.
CentralHub completes 6.2-hectare industrial warehouse in Tarlac
SUMMARY
CentralHub Industrial Centers Inc., the joint venture between DoubleDragon Corp. and Jollibee Foods Corp., has completed its 6.2-hectare industrial warehouse complex in Tarlac. The joint venture is aimed to be the country’s first industrial real estate investment trust (REIT). CentralHub’s industrial warehouse complexes are fit for use as a warehouse, commissary, cold storage facility, and logistics distribution center. To date, CentralHub has a total of 43.8 hectares of industrial assets. These are located in Capiz, Tarlac, Pasig, and Laguna while three more hubs are expected to rise in Iloilo, Davao, and Cebu.
RESEARCH VIEW
Data from the Philippine Statistics Authority (PSA) show that approved foreign direct investments (FDI) in 9M 2021 amounted to PHP58.9 billion (USD1.2 billion), down 22% from PHP75 billion (USD1.5 billion) approved in the same period last year. Colliers believes these investments will likely support growth in the industrial sector. Colliers sees the industrial sector thriving further as we see recovery in both local and global demand supported by the growth of domestic manufacturing, e-commerce, and ramped-up vaccination efforts across the country. We recommend that developers take advantage of REITs and use proceeds to refurbish their warehouses in order to meet the demands of tenants.
W Group aims to ramp up expansion this year
SUMMARY
W Group plans to double its warehousing and industrial leasable area in five years as it seeks to attract more e-commerce firms. The developer is consulting its multinational clients for their preferred logistics locations around the country. W Group is also planning to further expand its office portfolio in major business districts across Metro Manila, such as Bonifacio Global City, Makati, and Ortigas Center. It is also seeking to expand its landbank in Pampanga, Tarlac, and Batangas.
RESEARCH VIEW
The Department of Trade and Industry (DTI) projects domestic online businesses to reach about 1 million in 2022. Colliers believes that e-commerce will continue to thrive in 2022 due to Filipinos’ growing propensity to shop online. We see this sector partly sustaining the demand for warehousing and cold chain storage in the country. Colliers recommends that developers continue modernizing their warehouses and invest in the cold-chain sector to capture the growing demand for perishable food items, online groceries and COVID-19 vaccines. We also recommend that industrial park developers consider parcels of land in alternative locations in North and South Luzon as the upcoming infrastructure projects should raise the attractiveness of these locations for manufacturing, warehousing, and logistics investments.
