Bright prospects seen for industrial property
Opportunities brought about by the pandemic in the areas of e-commerce, food and groceries, and other essentials are driving the growth prospects in the industrial property segment, according to a real estate consultancy firm.
“The COVID-19 crisis presents positive development to the country’s industrial segment. Notwithstanding the effects of the global supply chain disruptions and constrained business operations as the pandemic further progresses, the segment establishes resilience with the upsurge in demand from e-commerce and essential industries,” Cushman and Wakefield Philippines said in its Philippine Industrial Market Spotlight report.
Apart from manufacturing and export-oriented companies, other industries seen to boost future demand for industrial properties, include e-commerce, food and beverage (F&B) pharmaceuticals, and other household essentials.
It also said that industrial players are seen benefiting from investing in high-quality, investment-grade facilities, and automated warehouse systems that would enhance efficiency in supply chain management.
“Bolstered by increased requirements for warehouse facilities to cater to essential industries and e-commerce companies, the industrial segment withstands the disturbances in the manufacturing and exports sectors particularly in the semiconductors and electronics industry,” Cushman and Wakefield said.
“While the aforementioned disturbances kept vacancy rates at healthy levels, the continued disruptions to the global supply chain hold off sharp increases in rental rates of standard built facilities (SFBs),” it said.
Cushman and Wakefield said asking rents in the industrial property sector are expected to buck the trend and grow at an annual average rate of five percent despite moderate increase in vacancy rates estimated over the mid-term due to the continued global supply chain disruptions and shutdown of several manufacturing facilities.
“Nonetheless, the renewed opportunities brought about by the pandemic in the areas of e-commerce, food and groceries, and other essentials are seen to maintain bright prospects in the industrial segment,” the report said.
It said the completion of new infrastructure developments in the areas of Laguna, Batangas and Central Luzon would further spur new developments outside of Metro Manila.
“Among the contributing factors that fuel the rise of both regions as the country’s major industrial hubs are their accessibility to the major airports and seaports to serve industrial locators,” Cushman and Wakefield said.
CALABARZON hosts the Cavite Gateway Terminal and the Port of Batangas, major gateways of international trade in the region, while it is also accessible to the Ninoy Aquino International Airport.
On the other hand, Central Luzon hosts the Clark International Airport, which is Luzon’s second main airway and the Subic Seaport, which is among the largest importation ports in the country.
Moreover, the real estate consultancy firm said the anticipated passage of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) into law is seen to generate positive sentiment among investors, particularly in the electronics export industry.