THE INDUSTRIAL property market “was slow-moving for quite some time and now it has been picking up pace.”
Leading real estate advisory and services firm CB Richard Ellis Philippines (CBRE) disclosed this current scenario for the country’s industrial and manufacturing sector in its 3rd quarter market review.
The rise in manufacturing activity has led to increasing demand in leasing industrial real estate properties.
In 2013, warehouse transactions showed a typical area range of 3,000 square meters to 10,000 square meters with lease terms from 1 to 5 years while manufacturing leasing transactions showed a typical area of 5 to 10 hectares with lease terms ranging from 15 to 25 years.
“The manufacturing sector of the country is generating renewed interest globally and is proving to be a re-emerging growth industry. CBRE added.
Manufacturing is a capital intensive industry requiring massive tracts of land which is the primary reason for the long lease terms. Industrial property transactions at these scales are expected to translate into future expansions and fuel overall manufacturing growth.
During the second quarter of 2013, manufacturing yielded the second highest growth of all economic sectors with a 10.3% year-on-year growth rate and 9.7% on the third quarter.
This positive growth has been a result of expansion of firms to the country and increased production volume from heightened global demand.
“Multiple agencies of the government have recognized the importance of the industry for long-term economic growth and are collaborating with the private sector to increase the expansion of manufacturing and industrial firms to the country”. CBRE said.
Volume of production index in September grew by 16% year-on-year with chemical products and furniture & fixtures topping the list.
Freeport zones Clark and Subic and the CALABARZON region are the major manufacturing hubs of the Philippines. These are strategically located in the fringes of Metro Manila with nearby seaports and airports for easier access to transport goods domestically and globally.
One of the main concerns of firms expansion are costs, indeed the Philippines posts relatively higher electricity costs compared to our neighboring countries. However, as per any country, each has its own strengths and handicaps.
Although the country lags behind power costs, it is globally competitive in industrial land values and has a definitive advantage in quality labor pool. The Philippines has the lowest median age in the region of 23.4 with labor productivity on the uptrend. Specifically for manufacturing, labor productivity grew by 3.84% and 4.46% in 2011 and 2012, respectively
Japanese and Korean Firms have shown recent interest on investing in the country’s manufacturing and infrastructure sectors.
Companies such as Canon, Brother, Murata, Bandai, Fujifilm and Cemedine have alreadyannounced their manufacturing-related investments in the country.
The Philippines is a globally competitive manufacturing hub for its strategic location, strong macroeconomic fundamentals, favorable demographics and cost effectiveness.
Other highlights of the latest Metro Manila Market review of CBRE includes:
• Expanding Office Market Show Strong Performance
Nearly 500,000 sqm of office space is expected to enter the market in 2013, of which 45% have come online in the third quarter.
• Residential Developers Continue To Tap Bond Markets
As domestic liquidity presents growth prospects for the economy, capital markets have been tapped in developing residential projects.
• Investments Unfold in the Third Quarter
In recent years, however, the economy is rerouting towards becoming more investment-led and industrialized.
• Upcoming Holidays Spike Up Global- Local Retail Partnerships
Joint agreements between local businesses and global brands continue to expand in the retail market as the holiday season draws near.
source: Manila Standard
Leading real estate advisory and services firm CB Richard Ellis Philippines (CBRE) disclosed this current scenario for the country’s industrial and manufacturing sector in its 3rd quarter market review.
The rise in manufacturing activity has led to increasing demand in leasing industrial real estate properties.
In 2013, warehouse transactions showed a typical area range of 3,000 square meters to 10,000 square meters with lease terms from 1 to 5 years while manufacturing leasing transactions showed a typical area of 5 to 10 hectares with lease terms ranging from 15 to 25 years.
“The manufacturing sector of the country is generating renewed interest globally and is proving to be a re-emerging growth industry. CBRE added.
Manufacturing is a capital intensive industry requiring massive tracts of land which is the primary reason for the long lease terms. Industrial property transactions at these scales are expected to translate into future expansions and fuel overall manufacturing growth.
During the second quarter of 2013, manufacturing yielded the second highest growth of all economic sectors with a 10.3% year-on-year growth rate and 9.7% on the third quarter.
This positive growth has been a result of expansion of firms to the country and increased production volume from heightened global demand.
“Multiple agencies of the government have recognized the importance of the industry for long-term economic growth and are collaborating with the private sector to increase the expansion of manufacturing and industrial firms to the country”. CBRE said.
Volume of production index in September grew by 16% year-on-year with chemical products and furniture & fixtures topping the list.
Freeport zones Clark and Subic and the CALABARZON region are the major manufacturing hubs of the Philippines. These are strategically located in the fringes of Metro Manila with nearby seaports and airports for easier access to transport goods domestically and globally.
One of the main concerns of firms expansion are costs, indeed the Philippines posts relatively higher electricity costs compared to our neighboring countries. However, as per any country, each has its own strengths and handicaps.
Although the country lags behind power costs, it is globally competitive in industrial land values and has a definitive advantage in quality labor pool. The Philippines has the lowest median age in the region of 23.4 with labor productivity on the uptrend. Specifically for manufacturing, labor productivity grew by 3.84% and 4.46% in 2011 and 2012, respectively
Japanese and Korean Firms have shown recent interest on investing in the country’s manufacturing and infrastructure sectors.
Companies such as Canon, Brother, Murata, Bandai, Fujifilm and Cemedine have alreadyannounced their manufacturing-related investments in the country.
The Philippines is a globally competitive manufacturing hub for its strategic location, strong macroeconomic fundamentals, favorable demographics and cost effectiveness.
Other highlights of the latest Metro Manila Market review of CBRE includes:
• Expanding Office Market Show Strong Performance
Nearly 500,000 sqm of office space is expected to enter the market in 2013, of which 45% have come online in the third quarter.
• Residential Developers Continue To Tap Bond Markets
As domestic liquidity presents growth prospects for the economy, capital markets have been tapped in developing residential projects.
• Investments Unfold in the Third Quarter
In recent years, however, the economy is rerouting towards becoming more investment-led and industrialized.
• Upcoming Holidays Spike Up Global- Local Retail Partnerships
Joint agreements between local businesses and global brands continue to expand in the retail market as the holiday season draws near.
source: Manila Standard
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