Commercial, housing projects bump off warehousing facilities

CEBU, Philippines — The robust developments of commercial and residential properties in Cebu have put the warehousing and distribution facilities on the backseat causing a shortage of such facilities here.

“We have not been able to address the need for warehousing in Cebu. Most warehousing facilities in Mandaue for instance are now converted into residential, commercial developments,” said Eppie Acusar, the managing director of Cebu-based property consultancy firm, iBuild Management Services Inc.,

Acusar, whose business is into helping developers position their projects and create concepts based on market pulse and trends, discovered that with focus given too much in taking advantage of vibrant residential and commercial developments, building warehouses supposedly to support the growing trade and commerce in Cebu has been overlooked by developers, causing the warehouse rent price to surge.

Because of this, she said the next big thing in Cebu is in the business of warehousing and logistics where need is high, and supply is thinning.

Compared to commercial and residential developments however, warehousing developments give less profitability especially if they are located in the urban districts like Cebu City or Mandaue City.

Possible locations are much feasible in farther near-port locations like Consolacion and far north, and from Naga in the south.

Report indicated that the Philippines logistics and warehousing market augmented positively from 2012 to 2017 at a positive CAGR (compound annual growth rate) during the review period 2012-2017.

Additionally, the country has witnessed increasing container freight traffic volume during the same period.

The Philippines has been considered as one of the most strategic locations in the Indo-Pacific Ocean. Industrial / Retail sector is the largest contributor to the warehousing sector, followed by container freight, cold storage, agriculture and others in terms of revenues in 2017. Increasing prominence of online shopping will increase the size of E-commerce industry in the country.

The companies the from retail sector, FMCG (Fast-Moving Consumer Goods or Consumer Packaged Goods) sector, pharmaceutical sector, apparels and other accessories are anticipated to witness robust growth.

E-commerce companies require warehousing facilities to store the products which will trigger the demand for warehousing space in coming future.

The express delivery companies, meanwhile, have created a door to door linkage across domestic and international markets and have developed advanced shipment tracking facilities to cater to time-sensitive needs of the logistics sector.