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Tuesday, March 28, 2023

Industrial vacancy seen to drop to 4.7%

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VACANCY in industrial estates is seen declining to 4.7 percent this year from 5.7 percent in 2022 as investments from manufacturing, e-commerce and logistics industries happen, Colliers Philippines said on Wednesday.

Joey Bondoc, research director at Colliers Philippines, is bullish on the decline in industrial spaces nationwide by one percent during the two periods in review, as he cited in their latest Market Intelligence study a report that the Philippine Economic Zone Authority (PEZA) greenlighted last month a total of P3.8 billion ($69.1 million) investments.

Such amount allocated for 11 projects is 112 percent higher than the P1.79 billion ($32.7 million) worth of invested capital approved by the agency in February of 2022.

Five of the approved projects this year are intended for export manufacturing, three for facilities, and one for information technology, logistics, utilities and for an expansion of a manufacturing economic zone—all located in Taguig, Laguna, Batangas, Tarlac, and Palawan.

PEZA, likewise, has endorsed 21 ecozone projects to the Office of the President for proclamation, which could potentially create P21.2 billion ($385.5 million) in investments.

In the previous edition of their market research, he noted that they also expected a new industrial hub of 132 hectares in the Cavite-Laguna-Batangas or CALABA corridor, seen to  be delivered in 2023, with the completion of three industrial parks in Laguna and Batangas.

According to him, they also project constant warehouse rental rates hike with the likely expansion of semiconductor companies.

Among the locators anticipated to take up space in the next 12 months are chemicals and automotive manufacturers, as well as transport and logistics firms.

“Colliers recommends that developers actively participate in overseas missions organized by Investment Promotion Agencies (IPA), including PEZA to capture demand from foreign investors,” Bondoc said of their suggestion to real estate players given such developments.

On the part of the government, the professional services and investment management company believes that its initiative to build more ecozones will help strengthen the Philippines’s appeal as an industrial and manufacturing hub to international locators.

“The development of new industrial parks and facilities, specifically in Central and Southern Luzon, should provide potential locators with more options and allow them to haggle for more attractive land and warehouse lease rates,” he stressed.

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