Colliers Radar

Philippines
22 May 2018

Mequeni:
Inviting National Developers to Pampanga

By Joey Roi Bondoc
Manager| Research
joey.bondoc@colliers.com
The Clark-Angeles-San Fernando
(Metro Clark) corridor in Pampanga
is benefiting from the government's
push to spread economic
opportunities outside of Metro
Manila. This is enticing national
property developers to invest
heavily in Metro Clark, resulting in
a pronounced development of
integrated master-planned
communities. Colliers believes that
national players need to cash in on
the region's improving
infrastructure backbone and
highlight the differentiating features
of their developments to maximize
Metro Clark's potential and stay
ahead in a fiercely competitive and
fast-evolving property market.
2 Mequeni: Inviting National Developers to Pampanga | 22 May 2018 |
Mequeni1:
Inviting National Developers to
Pampanga
The government’s active infrastructure implementation
and decentralisation programme is encouraging
developers to look closely at Pampanga, notably Clark
Freeport and adjacent cities and municipalities. We think
the Clark-Angeles-San Fernando corridor (Metro Clark)
has high potential to become a key property investment
hub outside Metro Manila. We see opportunities not only
for the office, residential, and retail segments, but also
for the leisure and industrial sectors. Given the relatively
cheap developable land in the area, Colliers believes
that the development of integrated communities is a
practical route for many developers. To maximise Metro
Clark’s potential, Colliers encourages both local and
national developers to take the following steps:
> Highlight differentiating features of townships;
> Build three and four-star hotels and meeting,
incentive, conference and exhibition (MICE) facilities;
> Explore transit-oriented, tourist-centric retail projects
> Redevelop brownfield assets and old office and retail
buildings especially in downtown Angeles and San
Fernando;
> Explore opportunities in the fringes of Metro Clark;
> Develop flexible office space to accommodate firms
that require smaller space; and
> Explore operation and maintenance (O&M)
opportunities involving transportation projects in
Northern-Central Luzon area
Colliers also encourages local players with sizeable
landbank but with limited experience in building master-
planned townships to partner with national players in
developing large integrated communities. We see more
aggressive development of office, condominium, and
hotels moving forward.
The enhancement of the country’s infrastructure
backbone should unlock land values in urban areas
outside of the country’s capital including Metro Clark.
This should dictate the strategies of local and national
developers. And with Metro Clark being a major
beneficiary of the government’s “Build, Build, Build”
programme, we see more developers gravitating towards
the region over the medium to long term.
1 Local dialect meaning "come here".
Colliers International
 Military Facility to Next CBD ....................... 4

Clark cashes in on infrastructure ................ 4

On to the Next CBD ................................... 4

Top BPO site in the countryside ................. 5

Horizontal outstrips Vertical: Preference for

House and Lots .......................................... 5

Integrated Communities in the New

Metropolis .................................................. 7

Recommendations ..................................... 9

Contents

3 Mequeni: Inviting National Developers to Pampanga | 22 May 2018 | Colliers International


Military Facility to Next CBD
The Philippine government’s economic strategy is
anchored on two main pillars - infrastructure
implementation and decentralisation. The current
administration’s goal of spreading business opportunities
outside of the country’s capital is spilling over to major
urban hubs such as Clark, a former American military
facility transformed into a freeport zone that is located
about 90 kilometres north of Manila.
For more than 20 years, Clark’s take-off as a central
business district (CBD) outside Manila has been
constricted by the lack of supporting infrastructure, chief
among which is a high-speed train that would connect
the country's capital and Clark and its environs.
Among the national developers we see benefiting from
the development of Clark’s infrastructure network are
Filinvest Group with its planned mixed-use project within
the New Clark City and redevelopment of Mimosa leisure
centre; Udenna with its integrated Clark Global City; and
SM Prime with its SM City Clark complex. Ayala Land
should also benefit as it has ramped up the development
of its Alviera township in Porac which is five to ten
minutes way from Clark Freeport. Other nearby
developments by national players that we see benefiting
from Metro Clark’s transformation are Megaworld’s
Capital Town project, Century City’s Azure Residences,
Torre Lorenzo's Tierra Lorenzo San Fernando in San
Fernando; and Ayala’s Marquee mall and residential
developments in Angeles City. The projected surge in
residential demand in Metro Clark should also benefit
other national players such as 8990, NorthPine, Pueblo
de Oro, P.A. Alvarez, Robinsons Land, and Vista Land.
Local developers are also moving to take advantage of
the planned transformation of the Clark-Angeles-San
Fernando corridor. Among the local players that have
been aggressive in developing office towers and
industrial facilities are Nepomuceno & Sons and AC
Beautiful Islands (ACBI) Realty Development Corp, the
operator of Jenra malls.
Clark cashes in on infrastructure
Metro Clark’s potential to become a major business hub
has been constrained by the lack of infrastructure.
Realising the importance of connectivity in stimulating
business activities in the area, the current administration
has lined up a number of projects that Colliers believes
should play a significant role in transforming Metro Clark
into the country’s next major economic corridor. We see
these infrastructure projects boosting office, residential,
retail, hotel, and industrial demand in Metro Clark.
4 Mequeni: Inviting National Developers to Pampanga | 22 May 2018 |
1. Clark Airport Expansion. Projected to raise the
facility’s capacity from four million passengers per
year to 12 million per annum by 2020. The expanded
airport is being positioned as an alternative to the
congested Ninoy Aquino International Airport (NAIA)
in Manila and should drive the occupancy levels of
hotels and sustain consumer traffic of malls in Clark,
Angeles, and San Fernando.
2. Subic-Clark Cargo Railway. Connects Subic Port and
Clark International Airport. It seeks to maximise the
currently underutilised Subic Port and decongest
Manila Port. We see the project boosting Central
Luzon’s feasibility as an industrial hub and stature as
a key alternative to the Cavite-Laguna-Batangas
corridor. The government aims to complete the
railway by 2022.
3. Manila to Clark Passenger Railway (Phases 1 and 2).
The 106-kilometre train line will link Manila to Clark.
The project is expected to be completed between
2021 and 2022. We see the project decongesting
Metro Manila and spurring business activities in
Malolos, Bulacan and Clark which should fuel office
space requirements and end-user demand for
housing in Clark, Angeles, Mabalacat, San
Fernando, and Porac.
4. Skyway Stage 3. The elevated expressway reduces
travel time from Buendia, Makati to Balintawak,
Quezon City from the 2 hours to 20 minutes. This
should hasten travel to San Fernando, Angeles City,
and Clark through North Luzon Expressway (NLEX)
and make the corridor a viable secondary location
for Metro Manila-based BPO operations. Skyway 3 is
due to be completed in 2019.
5. NLEX-SLEX Connector Road. This is projected to
reduce travel time from the South Luzon Expressway
(SLEX) to NLEX from two hours to 20 minutes. It
aims to cut travel time between two major industrial
hubs, Clark and Calamba in Laguna, from three
hours to one hour and 40 minutes and this should
benefit manufacturers with industrial facilities in both
Central and Southern Luzon. The construction of
connector road will start by July and is expected to
be completed in 2021.
On to the Next CBD
The Metro Clark property market is still dominated by
local players. Except for retail where the national players
SM, Ayala, Robinsons, and Vista have overtaken their
local counterparts in terms of leasable space, most of
office and residential projects in the corridor were built by
local players. Moving forward, we see Metro Clark’s
property landscape evolving and this should be enabled
Colliers International
by the aggressive entry of national developers facilitated
by the government’s plan to implement infrastructure and
decentralise.
Top BPO site in the countryside
Clark Freeport Zone remains the major BPO hub in the
Central Luzon region. In 2016, Clark was ranked by
Tholons as the 97th most attractive location for
outsourcing operations in the world. However, in 2017,
the city slipped out of the Top 100 list. Despite the
decline, Clark continues to attract major BPO locators
and remains a key back up site for Metro Manila-based
operations. Clark, together with Angeles and San
Fernando, employs more than 20,000 outsourcing
workers. Among the major locators in the area are
Alorica, Cloudstaff, Convergys, iQor, Sutherland,TaskUs,
TATA Consultancy, Teletech, Stellar, and VXI.
Metro Clark Supply Forecast (sq m of GLA)
LOCATION As of 2018 2019 TOTAL
2017
Clark Freeport 137,000 17,000 - 154,000
Angeles City 116,000 6,000 - 122,000
San Fernando 39,000 - 10,000 49,000
Overall 292,000 23,000 10,000 325,000
Source: Colliers International Philippines Research
The area hosts two of the largest universities in Central
Luzon; about a third of its college graduates are
Business degree holders; while nearly 40% have
relevant Science, Technology, Engineering and Math
(STEM) degrees. At present, Metro Clark’s BPO firms
mainly provide voice and back-office services but the
potential shift to higher value KPO services such as
animation, finance and accounting, and health
information management (HIM) should be supported by
a large number of STEM graduates. This should help the
city attract more outsourcing locators in the near term
At present, Clark Freeport accounts for more than 40%
of the more than 290,000 sq m (3.1 million sq ft) of office
GLA in the Clark-Angeles-San Fernando corridor.
Among the major business hubs within Clark are
Berthaphil and Philexcel Business Centres built by local
developers. Within the SM City Clark corridor are SM
Clark Tech Hubs by the national developer SM. The
buildings are complemented by retail and hotel
developments as well as a public transportation terminal.
Other office towers developed by national players
include One and Two West Aeropark buildings by
Udenna as well as Clark Mimosa 1 by the Filinvest
Group.
In the nearby Angeles City, local players dominate.
Nepomuceno & Sons covers almost 60% of the more
5 Mequeni: Inviting National Developers to Pampanga | 22 May 2018 |
than 40,000 sq m (430,000 sq ft) of BPO-ready office
supply in the city with its Entec 1 and 2 buildings while
the national developers Ayala Land and Robinsons Land
cover the remaining 40%, with office space offered
inside their respective malls – Marquee and Robinsons
Angeles. The remaining 70,000 sq m (753,000 sq ft) is
mainly developed by smaller local players and occupied
by traditional and non-outsourcing occupants.
San Fernando accounts for about 13% of Metro Clark’s
office stock or about 39,000 sq m (420,000 sq ft). Most
of the office buildings are located along the busy Jose
Abad Santos Avenue or Olongapo-Gapan road. The SM
Group’s SM Pampanga accounts for close to 10% of the
sub-location’s office supply. It houses Teletech, one of
the largest outsourcing firms in Pampanga. Other office
buildings in San Fernando are the CGIC building which
houses the head office of a multi-brand auto dealership
firm and Freluz Building which currently houses tile and
beauty product distribution companies, among other
non-outsourcing businesses. Both buildings were
developed by local players.
Office vacancy across the Clark-Angeles-San Fernando
corridor stood at 26% as of end-2017 due to the recent
completion of office towers in Clark Freeport. Colliers
sees overall vacancy easing to 13% over the next 12 to
24 months as more BPO firms occupy space in the
newer office space in Marquee mall, Entec, West
Aeropark, and Workplus Clark Mimosa buildings and
despite the projected completion of about 30,000 sq m
(323,000 sq ft) of new office space by 2019.
Comparative Office Rental Rates (PHP/sq m/
month)
LOCATION RENTS
Clark Freeport PHP450-700
Angeles City PHP450-550
San Fernando PHP250-500
Source: Colliers International Philippines Research
Conversion: USD1 = PHP50
Horizontal outstrips Vertical:
Preference for House and Lots
Horizontal
The residential landscape in Clark, Angeles, and San
Fernando is primarily horizontal (house and lot). The
vertical or condominium market is still in its infancy but
we see a more aggressive construction of vertical
projects over the next three to six years especially within
integrated communities that will be developed by
national players. Over the near to medium term, we see
Metro Clark becoming the hotbed for condominium
development in the entire Central Luzon region as these
Colliers International
residential towers complement the office projects in the
pipeline.
At present, San Fernando offers some 6,000 H&L units,
accounting for 36% of Clark-Angeles-San Fernando
area’s total H&L stock. About 75% of these units have
been taken up.
Meanwhile, Angeles covers the remaining 64% or almost
11,000 units. The city features some of the largest and
most expensive units in the corridor (e.g. Marquee Place
by the national developer Alveo, and Castellina at
Heritage Place by the local player Ideal & Dwell Realty).
Some 81% of H&L units in the city are classified as
economic and affordable while 9% are mid-Income and
the remaining 10% are considered as luxury projects.
Angeles City is the only sub-market in the entire
Pampanga province that offers luxury units as it is the
home of old-rich Filipino and Filipino-Chinese clans in
Pampanga. The average price of H&L units declined
from PHP4.7 million (USD90,600) in 2013 to PHP3.6
million (USD69,400) last year due to a more aggressive
launch of economic and affordable projects which mainly
cater to families of overseas Filipino workers (OFW).
Metro Clark House & Lot Market (Total Contract
Price in PHP)
LOCATION Minimum Maximum Average
TCP TCP TCP
Angeles City 912,000 10,944,642 3,616,374
San
Fernando 450,000 4,455,960 2,028,282
Source: Colliers International Philippines Research
Conversion: USD1 = PHP50
Vertical
The condominium market in Metro Clark is still at its
early stage. Major projects in key locations in San
Fernando and Angeles were developed by national
players while a number of residential towers in the
fringes were primarily built by local developers.
At present, there are only around 2,200 condominium
units in Metro Clark. For comparison, this represents
only 2.4% of Metro Manila’s condominium stock and
about 6.5% of Cebu’s. More than 80% of the units are in
Azure North in San Fernando and Marquee Residences
in Angeles City developed by Century Properties and
Ayala Land, respectively. The remaining 20% are
scattered across Balibago, Hensonville, and Malabanias
streets in Angeles City.
The 222-unit Ayala Land’s Marquee Residences has
been sold out as the project benefited from Ayala’s
6 Mequeni: Inviting National Developers to Pampanga | 22 May 2018 |
brand and proximity to Ayala’s retail complement
(Marquee Mall) and the Angeles exit of the North Luzon
Expressway (NLEX), the major toll road connecting
Metro Manila and Northern Luzon provinces.
Meanwhile, Azure North’s more than 1,600 units were
about 90% sold as of end-2017. Colliers attributes the
take-up to aggressive marketing abroad as the company
targeted Pampanga’s overseas workers looking for
viable investment options.
Among the vertical projects in the pipeline is the 23-
storey Tierra Lorenzo San Fernando tower developed by
national player Torre Lorenzo. Located along the Jose
Abad Santos Avenue, the project will be a condotel
(condominium operated as a hotel) with 381 units
ranging from studios to two-bedroom units. The project
was launched in 2017 and is due to be completed in
2021. We believe that condotel development in Metro
Clark will be more popular in the near to medium term as
companies cash in on the increased foreign tourist
arrivals.
Positioned as Clark’s first premium residential town is
Sharp Clark Hills which will be composed of five 21-
storey condominiums offering a total of 508 units. This
project is a joint venture between South Korea's POSCO
Engineering &Construction (POSCO E&C) and local
developer JB Cresta is estimated to cost PHP2.6-billion
(USD50 million). It will be completed by 2020.
Over the next three to six years, we see more
condominium projects being developed within Clark,
Angeles, and San Fernando by local and national
developers that are currently constructing townships.
The integrated communities of national players
Megaworld and Filinvest and local player Jenra Group
should drive condominium supply over the medium term.
While still in its infancy, we believe that the condominium
market in Metro Clark is starting to gain ground as the
more affluent families and OFWs are looking for viable
investment options. A number of Korean, Chinese, and
American tourists that have visited Clark, Angeles, and
San Fernando are now looking for condominium units to
live and invest in. Clark, Angeles, and San Fernando are
also part of Central Luzon, which is among the major
sources of Filipino migrant workers.
Colliers International
Integrated Communities in the New
Metropolis
National developers have been very active in building
integrated communities within Metro Clark. This is partly
due to the anticipated construction of passenger and
cargo railways, expressways, as well as the expansion
of the existing Clark Airport. Colliers believes that these
projects should unlock values for parcels of land that
could be developed into mixed-use communities. The
development of these townships is also necessary in
capturing a large fraction of the available labour pool that
BPO and industrial locators could tap.

The surge in Pampanga's purchasing power has also

encouraged developers to build malls and recreational
facilities alongside office and residential condominium
Source: BCDA
buildings. The entertainment facilities also make the
Pampanga townships an attractive weekend destination
for Metro Manila residents. These developments should 2) Clark Global City by Udenna
be sustained by institutional facilities such as schools Udenna Corporation’s 177-hectare property near the
and hospitals. Colliers believes that the government's Clark International Airport is being positioned as the
decentralisation thrust anchored on the implementation “Bonifacio Global City” of Northern and Central Luzon.
of major public infrastructure projects should entice The company is allotting more than PHP6 billion (USD
developers to pursue master-planned communities in 115 million) to develop its roads and drainage pipes.
and outside of Metro Clark aggressively. More than 20% of the property or 27 hectares have been
developed. Udenna is planning to partner with the major
1) New Clark City by BCDA players ALI and Megaworld in developing the property.
The New Clark City (NCC) is being positioned as the
Philippines’ first smart and disaster-resilient metropolis. It
traverses portions of Clark and Mabalacat in Pampanga
and Capas in Tarlac. State-run Bases Conversion and
Development Authority (BCDA) will spearhead the
property’s development in partnership with private
developers. According to BCDA the PHP607 billion
(USD11.7 million) development covers almost 9,500
hectares, more than 40 times larger than Bonifacio
Global City (BGC). The business district, once
completed will accommodate up to 1.12 million residents
and about 800,000 workers. Initial developments will
include the establishment of two universities
(Technological University of the Philippines and
University of the Philippines), a 20-megawatt solar farm,
a 25-hectare mixed-income housing intended for
Source: Udenna Corp.
industrial employees, and the 288-hectare mixed use
project by Filinvest. The Filinvest Group has entered into Udenna’s property will have a saleable efficiency of 60%.
a joint venture agreement with BCDA to develop a 288- The firm will build a hospital, chapel, pavilion,
hectare mixed-use area within NCC, of which 100 dormitories, and a hotel. In terms of leasable space, the
hectares will be allotted for industrial use. company already offers 50,000 sq m (538,000 sq ft) of
office space through its One West and Two West
Aeropark buildings. The construction of Three, Four, and
Five West Aeropark towers has started and the buildings
will add an additional 50,000 sq m (538,000 sq ft) of GLA
once completed. Udenna plans to develop about 50,000
sq m (538,000 sq ft) of additional office space per annum
over the next few years.

7 Mequeni: Inviting National Developers to Pampanga | 22 May 2018 | Colliers International

3) Filinvest Mimosa+ Leisure City by Filinvest
Group
Filinvest's 201-hectare site is being positioned as a key
lifestyle destination north of Metro Manila. The firm is
planning to maximise the potential of the site by building
a casino, lifestyle mall, five-star hotel and an events
venue. The development will also feature a renovated
Quest Hotel, two golf courses, and villas.

Filinvest's Workplus Building 1 is fully leased while its

second office tower is due to be completed before the
end of 2Q 2018. The construction of complementary
retail and residential facilities will also start this year. FLI
is banking on the project’s proximity to the soon-to-be
modernized and expanded Clark International Airport.
5) Alviera by Ayala Land
Alviera is an 1,800 hectare integrated township located
in the municipality of Porac. The township is ALI’s
partnership with the local developer Leonio Land. Alviera
offers various residential options such as Alveo Land’s
Montala Alviera and Avida Settings Alviera. About 80%
of the property will be allotted for residential projects
while the rest will be divided into office, retail, and
industrial uses.

Alviera’s residential projects under the Alveo and Avida

brands are recording strong take-up rates of nearly 90%.
The industrial lots that ALI initially launched are 90%
sold, compelling the developer to launch the second
phase of its industrial segment. Among its industrial
locators are involved in food manufacturing, motorcycle
assembly, packaging, logistics and warehousing.
Source: Filinvest Land Inc.

4) SM Clark Complex by SM
From a standalone retail outlet, SM Clark has expanded
to become one of the major business hubs in Metro
Clark. Aside from the 70,000 sq m (753,000 sq ft) retail
component (SM Clark), the complex also features a 154
room Park Inn hotel, and SM Clark Techno Hubs which
offer about 70,000 sq m (753,000 sq ft) of GLA. SM is
planning to build a convention centre within its complex
to cash in on the growing popularity of Clark as a
meetings, incentives, conferences, and exhibitions
(MICE) destination in Northern and Central Luzon. The
construction will start this year and SM is looking at
completing it in 2019.

Source: Ayala Land

Alviera also features Sandbox, an adventure destination

considered an alternative to Tagaytay and Nuvali in
Southern Luzon. Sandbox should attract more visitors
from Manila and Southern Luzon once the Cavite-

8 Mequeni: Inviting National Developers to Pampanga | 22 May 2018 | Colliers International

Laguna Expressway and Skyway Stage 3 are
completed. ALI has also signed a deal with De La Salle
Philippines (DLSP), through the Lasallian Institute for the
Environment (LIFE) to develop the 23-has. La Salle
Botanical Gardens. The firm plans to open the Alviera
Country Club next year.
6) Capital Town by Megaworld
Megaworld’s Capital Town covers 35.6 hectares. The
project will feature residential towers, office buildings,
retail outlets, schools, an amphitheatre, and events
venues. The project will be on the former site of
Pampanga Sugar Development Company. It is located
near the Pampanga Provincial Capitol, and is within five
minutes from the North Luzon Expressway and 30
minutes from the Clark International Airport.
Megaworld is primarily targeting BPOs for its office
towers and is planning initially to develop some 40,000
sq m (430,000 sq ft) of office GLA for outsourcing
companies. Its six hectare The Shophouse District offers
titled commercial lots where business owners can build
their own shophouses or retail outlets and live or hold
office on the upper floors of those shophouses.
Megaworld has also launched its residential
condominium, Chelsea Parkplace. Moreover, it will build
a heritage museum and the largest McDonald’s branch
in the country within its San Fernando township.
Source: capitaltownpampanga.com
Recommendations
Similar to Metro Manila and Cebu, the improvement of
Metro Clark’s infrastructure backbone should result in
more businesses in the area, hence the need to develop
township projects that integrate the live-work-play
lifestyle. However, we see a more robust development of
these integrated communities in the near to medium
term and developers need to differentiate their offering to
9 Mequeni: Inviting National Developers to Pampanga | 22 May 2018 |
remain relevant and responsive to locators’ and
investors’ needs.
Differentiation of townships
Major developers are now looking at Pampanga for their
expansion outside of the country’s capital. Over the past
few years we have seen the aggressive and strategic
acquisition of land by the national developers Ayala,
Megaworld, SM, Udenna, and Filinvest within Metro
Clark. We expect more national developers to establish
their footprint in the area given its potential. Thus, we
see more developers responding to tenants’ and
investors’ demand by building integrated communities
which improve the living and working conditions of
employees and residents.
Apart from the typical land uses such as office,
residential, retail, and hotel, Colliers believes that
developers should incorporate institutional uses such as
education and healthcare. Other developers have been
more aggressive in differentiating their communities by
integrating entertainment and recreational facilities.
Moving forward, developers need to be more innovative
to be steps ahead of the competition.
Develop more industrial space and
warehouses
The growing manufacturing and export activities in the
country are enticing developers to ramp up industrial
estate development outside the Cavite-Laguna-Batangas
area, the country’s major industrial hub and we see this
spilling over to Clark and nearby locations. The first
phase of Ayala Land’s (ALI) 64-hectare Alviera Industrial
Park in Porac, Pampanga is 95% sold. Tenants include
companies involved in food, logistics, and warehousing.
Filinvest is also apportioning 100 hectares of its 288-
hectare property in the New Clark City for industrial
operations.
Among the major projects that Clark received in the past
decade was a USD1 billion Texas Instruments chip
plant. Other major industrial locators in the corridor are
Nanox Philippines Incorporated, L & K Industries
Philippines, Aderans Philippines Incorporated, LuenThai,
and SMK Electronics Philippines Corporation –
manufacturing clothing to electronic products. The
planned improvement of airport and cargo rail projects
should further ignite interest in industrial land and
facilities in Metro Clark.
Aside from allocating space for industrial activities, we
also encourage local and national developers in Clark to
continue putting up warehouses due to growing demand
for e-commerce. Colliers believes that more standard
factory buildings are also required to support the growth
Colliers International
of the country's exports and imports. Clark is among the
country’s major export processing hubs.
Developers should thoroughly assess the needs of future
industrial locators and align their future projects with the
possible locators’ requirements. We see potential in the
construction of warehouses, and manufacture of fast-
moving consumer goods and packaging materials.
Build more hotels and MICE facilities
The Clark Airport Modernisation project is projected to
raise the facility’s capacity to 12 million from 4 million
passengers annually. In 2017 alone, the airport
welcomed 1.5 million local and foreign guests, up by
almost 60% from 950,000 visitors in 2016. The
modernised airport should attract more direct flights from
Asian and Middle Eastern countries and this should
result in greater foreign arrivals in Clark. We recommend
that developers cash in on this opportunity by building
more three to four star hotels particularly as these
facilities mainly cater to Japanese, Chinese, Korean, and
Taiwanese tourists, who are the major visitors to the
Philippines.
Among the recently-opened hotels in Clark are the 154
room Park Inn hotel within the SM Clark complex, the
400 room Quest Hotel within Filinvest’s Mimosa Leisure
Park and the 200 room Xenia hotel. The 260 room
Marriott Hotel, the first five-star facility in Clark, will open
in 2Q 2018 while a group of local businessmen is
developing a 200 room resort hotel that will complement
the Aqua Planet Theme Park, envisioned to be the
biggest theme park in Central Luzon. The facility is set to
open in 2019.
Colliers encourages developers to complement their
hotels with MICE facilities as the area is becoming a
popular choice for major international events. In 2017,
Clark hosted a number of meetings during the
Association of Southeast Asian Nations (ASEAN)
Summit.
Included in Angeles City government’s tourism
development plans is the construction of a convention
centre through a public-private partnership. This is one
MICE opportunity that local and private developers
should consider tapping.
Redevelopment of brownfield assets and/or old
buildings
Developers must aggressively scout for idle private
properties or government assets that they can acquire
and redevelop into master-planned communities. This
strategy is similar to Rockwell Land’s redevelopment of a
mothballed power facility into a thriving Rockwell Center
10 Mequeni: Inviting National Developers to Pampanga | 22 May 2018 |
and Megaworld’s transformation of an idle textile mills
into a fully developed Eastwood City.
Megaworld employed this similar strategy in San
Fernando following its acquisition of the former site of
Pampanga Sugar Development Company (PASUDECO)
which it plans to transform into an integrated community.
Colliers believes that several old buildings in downtown
Angeles City could be redeveloped into office towers and
lifestyle malls. In San Fernando, we see the potential in
redeveloping old buildings especially along the busy Mac
Arthur and Jose Abad Santos roads. Most of these
buildings are occupied by small businesses but we
believe that landlords could attract more BPO and other
high-value tenants once these office towers are
modernised. The retail complement should not be an
issue as several fast-food and convenience stores are
found in the area. The refurbished office buildings could
also allot the ground floor for retail tenants.
Development of flexible office space to
accommodate firms that require smaller space
The robust economic growth in Northern and Central
Luzon reflects not just the sustained dynamism of the
BPO-led services sector but also the expansion of other
key economic sub-sectors such as construction,
telecommunications, banking and finance, warehousing
and logistics, and manufacturing. We expect companies
engaged in these businesses to open shop in Clark,
Angeles, and San Fernando and provide support to
booming businesses in the area. The firms should also
support the operations of back up government offices
within the National Government Center that recently
opened in Clark. Thus, we recommend that developers
carve out space for these firms that occupy relatively
small space compared to outsourcing companies.
Transit-oriented, tourist-centric retail projects
Colliers believes that developers should build retail
outlets near the infrastructure projects to capture a larger
share of the commuting public. For the Manila to Clark
railway project, Colliers considers Malolos and Calumpit
in Bulacan; Apalit, Angeles, San Fernando, and Clark in
Pampanga; and Capas in Tarlac as the most viable
locations for transit-oriented retail outlets.
Colliers is also optimistic that the surge in foreign tourists
will continue to fuel retail demand in the new metropolis.
Hence, Colliers encourages mall developers and
retailers to cater to the retail demands of Korean and
Chinese tourists who comprise the bulk of Metro Clark’s
foreign arrivals. Data from the Tourism Department
revealed that average daily spending by Chinese tourists
more than tripled to USD224 in 2017 from USD63 in
2016. Meanwhile, Koreans' average daily expenditure
(ADE) rose 28% to USD247 in 2017 from USD193 in
2016.
Colliers International
Explore operation and maintenance (O&M) Some high-end projects do not sustain their premium
opportunities because of bad management and poor upkeep.

We encourage the developers' infrastructure units to

explore operation and maintenance (O&M) opportunities
involving transportation projects in Metro Clark and
nearby provinces in the Northern-Central Luzon corridor.
Colliers believes that the government’s economic
decentralisation push hinges on improved connectivity.
Aside from Clark, Angeles, and San Fernando, other key
cities in the North-Central Luzon area that will benefit
from aggressive construction of transport infrastructure
are Capas and Tarlac City in Tarlac; Cabanatuan in
Nueva Ecija; San Jose del Monte in Bulacan; and La
Union.

Opportunities in the Fringes

Colliers believes that businesses in the Clark-Angeles-
San Fernando area are thriving, driving property firms to
develop more office, retail, and residential projects. But
Colliers believes that developers should start looking for
other cities and municipalities that are viable property
investment destinations. Aside from Porac, local and
national players should explore opportunities in Mexico
and Mabalacat in Pampanga and Capas in Tarlac.

Acquire Land in Large Masterplanned

Communities of National Players
Pampanga-based developers should look at acquiring
parcels of land within integrated communities that are
being developed by national players. By building office
buildings within the master-planned communities
developed by national players, local firms are able to
maximise the transportation network and other
infrastructure built by national developers. We
encourage local players to explore opportunities for
partnership with national players that are developing
large masterplanned communities such as Ayala,
Megaworld, and Filinvest.

Firm up Partnerships with Global Property

Management Firms
Local developers in Metro Clark, particularly those with
limited property management experience, should
consider tapping international real estate management
services companies to take advantage of the global
standard of service that these firms are known for. These
property management firms can handle the daily
operations of residential and office buildings including
management, supervision, improvement and upkeep of
facilities. These firms also supervise the technical
operations and maintenance of the projects’ various
building equipment and manage the financial aspects of
the building operations. We believe that a property’s
value is retained only if a building is properly maintained.

11 Mequeni: Inviting National Developers to Pampanga | 22 May 2018 | Colliers International

 Primary Author:
413 offices in Joey Roi Bondoc
Research Manager | Philippines

69 countries on +632 858 9057

joey.bondoc@colliers.com

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