Demand for industrial space seen to remain strong this yr

MANILA, Philippines - Demand for industrial spaces is seen to continue to rise this year amid the positive investment climate in the country and “government efforts to attract more foreign manufacturing firms, said property consultancy firm Colliers International Philippines.

“It (demand) will continue this year because of the good investment
climate,” Colliers International Philippines research analyst Romeo Arahan said in an interview, noting that rising labor costs in China and  the Philippines’ stellar economic performance are making the country a viable
alternative manufacturing destination.

“The government is promoting the Philippines as an attractive location for manufacturing so we expect more companies,” he added. Demand is seen for light manufacturing, warehousing and logistics facilities.

“Demand is mostly from those in the fast consuming goods and exports
industries,” Arahan said.

Colliers’ Fourth Quarter Market Research and Forecast Report for the Philippine Real Estate Market showed that the average industrial vacancy rates in preferred manufacturing locations such as Batangas, Cavite and Laguna have declined by more than three percent in the second-half of 2013 to 12.8 percent from the previous semester’s 15.9
percent.

Batangas posted the highest decrease in vacancy to 16.9 percent in the
second-half of 2013 compared to the previous semester’s 23.2 percent.

“Batangas has become a prominent manufacturing destination because of its accessibility. It is near the port and close to Manila,” Arahan said.

With demand seen for industrial spaces, he said the supply stock is
seen to increase.

As of the second semester last year, he noted that the total stock in preferred locations such as Batangas, Cavite and Laguna have expanded by 5.9 percent to 6,574 hectares compared to the previous semester.

He added that new and expansion projects are also underway to respond
to demand.

Those with Philippine Economic Zone Authority (PEZA) accreditation currently in progress in terms of land area are the 900-hectare Rancho Montana Ecozone in Batangas, the 177-hectare PEC Industrial Park in Cavite and the 254-hectare Laguna Technopark in Alaminos.

The PEZA, an agency attached to the Department of Trade and Industry,
extends assistance as well as grants incentives to business operations of investors engaged in export-oriented manufacturing in areas declared as PEZA special economic zones.

Aside from export manufacturing, other activities which can qualify
for PEZA registration and perks are information technology service export, tourism, medical tourism, agro-industrial export
manufacturing, agro-industrial bio fuel manufacturing and logistics
and warehousing services.