COLLIER S R AD AR INF R AS TR UCTUR E | R ES EAR CH | MANILA | 23 S EPTEMB ER 2019

Joey Roi Bondoc

Manager | Research | Philippines
+632 858 9057
Joey.Bondoc@colliers.com

ROAD WORKS
Impact of infrastructure development on township
expansion outside Metro Manila
COLLIER S R AD AR INF R AS TR UCTUR E | R ES EAR CH | MANILA | 23 S EPTEMB ER 2019

Summary & Recommendations
The Philippine government’s ambitious
infrastructure plan is being anchored by its
decentralization push. The traffic congestion
in Metro Manila has compelled the national
government to improve infrastructure
connectivity and establish more business
hubs outside of the capital region.
The completion of these infrastructure
projects should bode well for both
developers and occupiers. We recommend
that developers take advantage of the
increased infrastructure spending by:
> Strategic acquisition of land outside
Metro Manila such as Cebu, Pampanga,
and Davao
> Expanding mixed-use developments
outside Metro Manila
A series of public projects led by the government should provide the impetus for developers to build
more office buildings and residential projects. We expect this to help support the needs of tenants
looking to lease space outside of Metro Manila.
Based on the government’s infrastructure plan, Colliers expects Metro Clark, Metro Cebu, Iloilo,
Bacolod, Bulacan province and Davao City to benefit from the Duterte administration’s infrastructure
push. This should result in a more buoyant property market in these areas.
Colliers expects Davao to remain an attractive location for tourists and business travelers even after the
current president’s term, due to the economic impact of increased infrastructure spending and renewed
investor interest.
We also see increased appetite for township development in Bulacan following the development of the
new Manila International Airport. Following the completion of Metro Rail Transit-7 (MRT-7), due for
completion in 2022, we see Bulacan, particularly San Jose del Monte City,and the Northern Quezon City
area becoming a major office and residential hub in the next three to five years.
Colliers believes that the implementation of infrastructure projects in key urban areas outside of Metro
Manila should stimulate redevelopment of areas into townships and therefore drive an uptick in office
and residential supply in areas outside Manila. The quality of the Philippines’ infrastructure network has
been wanting and this is reflected in the country’s poor showing in regional comparisons. This has
propelled the current administration to help avert the Philippines’ eroding global competitiveness and
improve the country’s infrastructure backbone. Colliers believes that the infrastructure plans of the
current administration are likely to strongly influence the direction of real estate developments beyond
the term of President Duterte.

> Differentiating projects as the market Regional comparison of infrastructure spending

becomes increasingly competitive. Aside Infrastructure Infrastructure
from the typical office and residential China spending as % ranking out of
projects, developers should consider of GDP (2010- 140 countries
India Country 2016) (2018)
featuring other projects such as malls,
China 9.5 29
hospitals, and schools within their Thailand Vietnam Vietnam 8.0 75
townships. India 7.5 63
Malaysia Philippines
Malaysia 6.0 32
> Partnering with national players.
Thailand 5.0 60
Homegrown developers with massive Indonesia 3.0 71
land in the provinces should tie up with Indonesia
Philippines 2.2 92
national players that have extensive Joey Bondoc Source: World Economic Forum (WEF) Global Competitiveness Index 2018
experience in developing integrated Senior Research Manager and statistical agencies of each country. Note: USD1 to PHP51 as of the end
of July 2019. The Philippine Economic Zone Authority is also known as PEZA.
communities. Research | Philippines
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Colliers expects developers to continue pursuing opportunities to develop
satellite communities outside of Metro Manila given the proposed airport
development and modernization projects. Integrated communities offer a
better value proposition than standalone projects given their focus on
mixed-use development. We believe that greater scale combined with a
mixed-use focus makes integrated townships an attractive option for
investors. Colliers also expects more outsourcing tenants to gravitate toward
integrated communities as they offer a better living and working
environment.
RECOMMENDATIONS
Colliers encourages national developers to maximize the government’s
massive infrastructure implementation and decentralization programs by
complementing their office and residential projects with the following
measures:
Implementation of strategic landbanking
Colliers believes that developers should take advantage of the
government’s efforts to intensify infrastructure development outside of
the country’s capital. The completion of public infrastructure projects
should result in more aggressive construction of townships. To cash in on
the opportunities, developers must intensify efforts to acquire
land strategically. In our opinion, land around the proposed
New Manila Airport in Bulacan and the New Clark City
are the most feasible for township development.
Partnership with local developers
National developers should firm up partnerships with local developers to
strategically expand their landbank. Tie-ups with local/provincial developers
also enable national firms to leverage local market knowledge and access to
landbanks.
This approach should allow national developers to tailor their real estate
offerings to the preferences of local investors and occupiers. While national
players have extensive experience in developing townships,
a significant portion of the developable land outside Manila
is still owned by local developers.
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Expansion of mixed-use developments outside Metro Manila
Colliers expects developers to aggressively pursue township projects
outside Metro Manila as townships offer a better value proposition than
standalone developments. The development of townships outside of
Metro Manila is in line with the Duterte administration’s goal to
decentralize and bring economic growth to other areas of the country.
With Davao City getting a lot of attention due to the election of its former
mayor into the presidency, we expect that the infrastructure
developments there being accelerated. Major developers should revisit
their landbanking and construction efforts in
Davao City. Aside from Davao City, Colliers sees
developers pursuing township developments in
Clark, Cebu, Bacolod, Iloilo, and Bulacan.
Project differentiation
Developers are aggressively acquiring large parcels of land that could be
developed into master-planned communities. In an increasingly competitive
environment, property firms need to differentiate their projects
from others. Apart from the typical land uses such as office,
residential, retail, and leisure/hotel, developers are now
incorporating institutional uses such as education
and healthcare.
Exploration of operation and maintenance (O&M) opportunities
We encourage the infrastructure units of developers 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 decentralization push
hinges on improved connectivity. Colliers believes that among
the cities likely to benefit from O&M opportunities are
Clark, Angeles, San Fernando, and Bulacan as well
as Cebu, Bacolod, Iloilo, and Davao.
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CEBU: ROAD PROJECTS TO Metro Cebu office supply forecast, GLA (sq metres)

COMPLEMENT EXPANDED AIRPORT Location

Metro Cebu
End-2018
1,051,100
2019
164,900
2020
180,700
2021
98,300
Total
1,495,000
The property boom in Cebu offers a cosmopolitan business lifestyle at a Source: Colliers International
discount to Metro Manila. The entry and aggressive expansion of national
developers have redefined the Cebu property landscape. We see greater Residential leaning towards vertical
expansion ahead for both national and Cebu-based developers following the Metro Cebu’s condominium stock reached 38,800 units in 2018, about 16%
path of major public infrastructure projects. higher compared to its 2017 stock of 33,325 units. Cebu remains the largest
The national developers have been successful in developing townships in the condominium market outside of Metro Manila. By comparison, Metro
country’s capital and have applied the same concept in Cebu. For instance, Manila’s condominium stock by the end of 2018 reached 111,000 units.
Megaworld is replicating its successful Eastwood City, the first PEZA- By the end of 2021, we see Metro Cebu’s residential stock reaching 45,150
accredited IT Park with their Mactan Newtown development; Ayala Land units, up 16% from 38,800 units in the end of 2018.
created a more contained version of the Makati CBD in the Cebu Business
Park and Cebu IT Park; while Filinvest Land is developing City di Mare, Township projects such as City di Mare and Mandani Bay should account for
positioning it as the integrated lifestyle hub of Cebu. AboitizLand has also close to 40% of new condominium supply from 2019 to 2021.
partnered with Ayala Land for the development of GatewalkCentral. Cebu Condominiums (% share of new supply to 2019-2021)

Shift from Downtown to Newtown Mandani Bay 37%

The master planned environment continues to set national developers apart
Cebu IT Park 12%
from local players. New leasable office space from these townships is likely City di Mare 2%
to add around 360,000 sq metres (3.9 million sqfeet) to Metro Cebu’s office Source: Colliers International
stock, representing more than 80% of new supply from 2019 to 2021.
Metro Cebu vertical residential supply forecast, (units)
However, the lack of developable land within the business districts has
compelled developers to look for other locations such as Mactan and Location End-2018 2019 2020 2021 Total
Mandaue. While we expect Cebu IT Park and Cebu Business Park to account Metro Cebu 38,800 1,950 2,570 1,830 45,150
for 81% of new office supply from 2019 to 2021, we also see major projects Source: Colliers International
in Mandaue from 2019 to 2021 including Oakridge IT Center 3.
Colliers believes that various infrastructure projects lined up for completion
Cebu Office (% share of new supply 2019-2021) from 2021 to 2024 should further boost Metro Cebu’s attractiveness as a key
property destination outside Metro Manila.
Cebu IT Park 51%
The completion of the Mactan-Cebu International Airport in 2018 has raised
Cebu Business Park 30% Cebu’s attractiveness as a major business hub and we see this contributing
Source: Colliers International to greater office space take-up in the city’s business districts over the next
three years. The expanded facility has also buoyed the demand for hotels
and resort-oriented condominium projects, especially in Mactan.

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Other projects such as Cebu Bus Rapid Transit (BRT), Metro Cebu Realizing the importance of connectivity in stimulating business activities in
Expressway, Cebu-Cordova bridge, and Cebu monorail should improve the area, the current administration has lined up a number of projects that
connectivity between the business districts of Cebu and fringe areas such as Colliers believes should play a significant role in transforming Metro Clark
Mactan, Mandaue, and South Road properties (SRP). We see these projects into the country’s next major economic corridor.
easing traffic within Metro Cebu and raising land and property prices from
We see these infrastructure projects boosting the demand for office and
2019 to 2024.
residential projects and Colliers expects to see more developers tapping the
Metro Cebu upcoming infrastructure projects and townships demand by developing integrated communities.
Among the national developers we see benefiting from the growth of Clark’s
Metro Cebu Expressway Danao
infrastructure network are the Filinvest Group with its planned mixed-use
City (2022) project within New Clark City and redevelopment of the 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, located five to ten minutes
away from Clark Freeport. Other nearby developments by national players
Tayud International Port (2022)
that we see benefiting from Metro Clark’s transformation are Megaworld’s
Cebu Bus Rapid Transit Capital Town project.
Talamban Station (2021)
MANDAUE Cebu Monorail Project (2024) Metro Clark upcoming infrastructure projects and townships
Mactan Cebu International Subic-Clark Cargo
Cebu IT Park Airport (2018) New Clark City
Railway (2022)
Cebu Business Park Mandani Bay Mont Clair
Mactan Newtown Clark Airport Expansion
Gatewalk (2020)
Filinvest Mimosa
City Di Mare Central Cebu-Cordova Bridge (2021) + Leisure City
SOUTH ROAD PROPERTIES (SRP) SM City Clark
Complex
Source: Colliers International. Scale: 1cm: 5km. Clark Global City
Manila-Clark Passenger Railway
CLARK: MILITARY TO NEXT CBD? San Fernando, Pampanga (2022)

The national government has long identified Clark Freeport’s potential as a Alviera
business hub outside Manila. In 1994, the national government certified Capital Town
Clark International Airport as an alternative gateway to Manila. But for more
than 20 years, Clark’s take-off as a central business district (CBD) outside
Manila has been constrained by the lack of supporting infrastructure. The
most important missing link is a high-speed train that would connect the
country's capital and Metro Clark. Pampanga-Skyway 3 (2020)
• 75kms away NLEX-SLEX Connector Road (2021)

Source: Colliers International. Scale: 1cm: 5km.

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Office market to cater to higher-value outsourcing Metro Clark vertical residential supply forecast, (units)
Colliers estimates that Metro Clark has about 330,800 sq metres (3.6 million Location End-2018 2019 2020 2021 Total
sq feet) of leasable office supply. We expect an additional 73,000 sq metres Metro Clark 2,200 1,350 930 520 5,000
(785,800 sq feet) of new leasable space from 2019 to 2021. Developers have Source: Colliers International
been taking advantage of Clark’s viability as a business hub outside of the
country’s capital. The area is a preferred location for call centres expanding Clark Condominiums (% share of new supply to 2019-2022)
outside of Metro Manila as well as foreign outsourcing firms, as they tap
accountancy graduates of nearby universities. Among the major occupiers in
Capital Town 7%
the area are Alorica, Cloudstaff, Convergys, iQor, Sutherland, TaskUs, TATA Azure North 79%
Consultancy, Teletech, Stellar, and VXI. Source: Colliers International

Business hubs such as Capital Town and Philexcel Business Park are likely to
comprise about 50% of Metro Clark’s new leasable office supply during the
period, while the other half is likely to come from stand-alone projects.
Beyond 2021, Colliers expects more aggressive office development from
Metro Clark-based players as these firms are currently in talks with national
players that have significant expertise in developing integrated communities.
Clark Office (% share of new supply 2019-2021)
Capital Town 38%
SM City Clark Complex 36%
Source: Colliers International
Airports and railways to stoke residential demand
The residential landscape in Metro Clark is primarily horizontal (houses and
lots). The vertical (condominium) market is still in its infancy, but we expect
more aggressive construction of vertical projects over the next three to six
years, especially within integrated communities that are likely to be
developed by national players. Over the next few years, we see Metro Clark
becoming the hotbed for condominium development for the entire Central
Luzon region as residential towers are built to complement the office
projects in the pipeline.
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.
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 such as Megaworld’s Capital Town and Century Properties’ Azure
North are likely to account for more than 85% of 2,800 new condominium units
from 2019 to 2021.
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 Overseas
Filipino Workers (OFWs) are looking for viable investment options. A number of
Korean, Chinese, and American tourists that visited Metro Clark are now
looking for condominium units to live and invest in. Hence, we see the
completion of the expanded Clark International Airport playing a crucial role in
further improving Metro Clark’s stature as a key condominium market north of
Manila. Metro Clark should also be a feasible investment destination for
Manila-based investors, and this should be facilitated by projects linking Manila
to Clark likely to be completed from 2020 to 2025, including Skyway Stage 3
and Manila-Clark Passenger Railway.
ILOILO: WESTERN VISAYAS’ HUB
Iloilo City has become a major investment destination in the Visayas region.
Developers such as SMDC, Ayala Land, and Megaworld have been aggressive in
building integrated communities in the city and its environs due to the city’s
attractiveness as an outsourcing and educational hub in the region. The
demand for office space has been complemented by the expanding

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residential footprint of national players such as Megaworld, Avida Land, and Overall, we see Iloilo’s leasable office supply increasing to 242,900 sqmetres
Filinvest. Over the next three to five years, we expect to see the rise of second (2.6 million sqfeet) by 2021, or an addition of about 44,500 sq metres
and third-tier cities such as Pavia, Oton and Sta. Barbara as they experience (478,800 sq feet) of office space per year from 2019 to 2021. All of the
growing demand for offices and residential units. In our opinion, this should upcoming supply is likely to be in Mandurriao as developers cash in on the
give rise to the development of more township projects in Iloilo. Several public area's viability as a key outsourcing destination in Western Visayas. Colliers
projects due to be completed over the next three-to-five years should projects townships such as Megaworld’s Iloilo Business Park, Ayala Land’s Atria
complement the demand for integrated communities, including the Iloilo Park Business District, and SM City Iloilo Complex to comprise all of the new
International Airport modernization, Panay-Guimaras-Negros Link Bridge, and leasable supply from 2019 to 2021.
the Monorail project to link second and third-tier cities to the major business
hubs such as Iloilo Business Park, SM City Iloilo Complex, and Ayala Land’s Atria Iloilo Office (% share of new supply 2019-2021)
Park District. Iloilo Business Park 52%
Iloilo upcoming infrastructure projects and townships SM City Iloilo Complex 34%
Atria Park District 14%
Source: Colliers International

Iloilo International Iloilo office supply forecast, GLA (sq metres)

Airport Expansion (2021)
Location End-2018 2019 2020 2021 Total
Iloilo City 109,400 39,700 17,100 76,700 242,900
Source: Colliers International

Condominiums in townships to boost total stock

Iloilo Business Park SM City Iloilo Complex Iloilo’s residential market is primarily horizontal with about 22,000 units in
total at the end of 2018.
Atria Park District
Panay-Guimaras-Negros
Meanwhile, there were only about 2,170 vertical or condominium units at the
Link Bridge (2023) end of 2018. From 2019 to 2021, we expect about 500 condominium units to
Monorail Project
complete each year on average. This is higher than the 470 units delivered
Source: Colliers International. Scale: 1cm: 5km. annually from 2016 to 2018. Iloilo City’s condominium stock remains small
compared to the horizontal segment, but we see a more aggressive launch
Strong office absorption to continue and completion schedule in the next few years, given the rising viability of
National developers such as Ayala Land, Megaworld, SM Prime, and condominium living, especially within the city’s main business district, which
Robinsons Land have ramped up construction of office space in Mandurriao, features integrated communities.
the location of the old airport. At present, Mandurriaoaccounts for 80% of Iloilo Condominiums (% share of new supply 2019-2021)
Iloilo City’s office stock, representing 87,800 sq metres (944,700 sq feet) of Iloilo Business Park 50%
the city’s total space of 109,400 sq metres (1.1 million sqfeet).
Atria Park District 21%
Source: Colliers International
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The bulk of the new supply from 2019 to 2021 is likely to be within Iloilo City’s Bacolod upcoming infrastructure projects and townships
business district. We estimate Megaworld’s Iloilo Business Park to account for
50% of the new units during the period.

Iloilo vertical residential supply forecast, (units) Bacolod Economic Highway

(Phase 1 – Mansilingan)
Location End-2018 2019 2020 2021 Total (full project completion:2022)
Iloilo City 2,170 950 290 270 3,680 Bacolod-Silay Airport Expansion (2021)
Source: Colliers International
Northill Gateway

BACOLOD: AN EMERGING HUB The Upper East

Bacolod is a major outsourcing hub outside Manila and has attracted large
outsourcing players such as Transcom, Ubiquity, Convergys, Teleperformance,
and Panasiatic. Primarily a call centre hub, Bacolod City has started to position
itself as a provider of higher value outsourcing services such as health
information management and software engineering. Recent major deals in the
area include ARB Call Facilities, which took up more than 10,000 sqmetres
(107,600 sq feet) of office space.
The city’s condominium market is still at an early stage of growth, but the
completion of major township projects from 2022 to 2023 is likely to expand its
condominium stock.
Among the crucial infrastructure projects likely to be implemented in Bacolod
City are the Bacolod Economic Highway and the expansion of Bacolod-Silay
Airport.
Other local government-initiated projects that should further raise the city’s
attractiveness as an office and residential hub include the Bacolod City South
Bus Terminal, two coastal roads, and a viaduct. These should ease access from
the city’s business districts to second and third-tier cities in Negros Occidental.
Among the developers we see benefitting from the completion of
infrastructure projects and expansion of the city’s property market are
Bacolod Economic Highway (Phase 1 – Sum-Ag)
(full project completion:2022)
Source: Colliers International. Scale: 1cm: 5km.
Megaworld to drive office…
Colliers expects around 14,300 sqmetres (154,000 sq feet) of new office
supply per annum from 2019 to 2021. This would raise Bacolod’s office stock
to about 161,300 sq metres (1.7 million sq feet) in 2021, up 36% from
118,500 sq metres (1.3 million sqfeet) in 2018. A single township,
Megaworld’s The Upper East, is likely to account for 47% of the new supply
during the period. The rest is likely to come from stand-alone projects from
Ayala Land and a Bacolod-based developer.
The planned expansion of the Bacolod-Silayairport is likely to enhance
Bacolod City’s attractiveness as an outsourcing destination.
Bacolod Office (% share of new supply 2019-2021)

Megaworld, Ayala Land, and Cebu Landmasters. The unsolicited proposal for The Upper East 47%
the expansion of the Bacolod-Silay Airport from Dennis Uy’s Udenna Corp. is
Source: Colliers International
now being reviewed by the Civil Aviation Authority of the Philippines (CAAP).
Colliers sees this as an opportunity for the company to further expand its
property footprint in the country, following its key acquisition in Clark,
Pampanga.
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Bacolod office supply forecast, GLA (sq metres) But Bulacan’s property landscape is likely to change following the national
government’s approval of the proposed PHP734 billion (USD14.4 billion)
Location End-2018 2019 2020 2021 Total New Manila Airport. The airport project, along with the ongoing Metro Rail
Bacolod City 118,500 7,800 - 35,000 161,300 Transit 7 (MRT-7) project and the Bulacan Bypass Toll Road project, is likely
Source: Colliers International
to raise land and property prices in Bulacan and northern part of Quezon
City. These projects should unlock underutilized areas in the Northern
… and residential supply. Quezon City – San Jose del Monte – Bulacan corridor and open more
opportunities for office and residential developments.
As of the end of 2018, Bacolod City’s condominium stock reached 1,308
Among the early movers that we see capturing the opportunities in the
units, considerably smaller than the 111,000 units in Metro Manila in the
province are San Miguel Corporation, SMDC, Ayala Land, and 8990 Holdings,
same year. From 2019 to 2021, we expect slow growth in condominium
Inc. We see a more aggressive landbankingin Bulacan especially around the
completions. We project only around 870 units over the next three years, an
San Jose del Monte in Bulacan area in anticipation of the completion of the
annual average of 290 units. All of the projected upcoming supply from 2019
rail and airport projects. Over the next three to five years, these
to 2021 is classified as affordable (PHP1.7M to PHP3.2M or USD33,300 to
developments should set the stage for a more aggressive launch of
USD62,700 per unit) while more than 80% is scheduled to be delivered via
integrated communities in the area.
Cebu Landmasters’ Mesa Virre Garden Residences project. From 2022 to
2023, Megaworld is also set to offer 462 units upon full completion of The Bulacan upcoming infrastructure projects and townships
Upper East One and Two Regis.

Bacolod Condominiums (% share of new supply 2019-2023)

MRT
MRTLine
Line7 San Jose
7 San JoseDel
Del
NewManila
New ManilaInternational
International
Monte
MonteStation(2022)
The Upper East 35% Airport(2023)
Airport (2023) Station(2022)

Source: Colliers International Altaraza Town Center

Bacolod vertical residential supply forecast, (units)

Location End-2018 2019 2020 2021 Total Cheer

Cheer
Residences
Residences

Bacolod City 1,308 - 140 733 2,181

Source: Colliers International

BULACAN: NEW AIRPORT TO BUOY Source: Colliers International. Scale: 1cm: 5km.

PROPERTY Condominium developments to take off

Bulacan had previously been bypassed by office and vertical residential
developers expanding outside of Metro Manila, with major players locating
in either Pampanga or the southern Luzon provinces of Cavite, Laguna, and
9 Batangas.
As of the end of 2018, condominium stock in Bulacan was at 509 units. One
of the largest projects, launched in 2013, was Amaia Steps Altaraza – Aria
located in Altaraza Town Center by Ayala Land.
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At present, there is only one township project in Bulacan, Ayala Land’s Davao is one of only three Philippine cities that are in Tholons Services
Altaraza Town Center, which is likely to contribute around 40% of new Globalization Index (TSGI) list of Top 100 outsourcing hubs in the world. The
condominium supply from 2019 to 2023. city has long been a key business hub in the Mindanao group of islands in the
southern Philippines, but this was boosted by the election of President
Bulacan Condominiums (% share of new supply to 2019-2023)
Duterte, who served as Davao City’s mayor for 22 years.
SM City Marilao Complex
(Cheer Residences)
58% The office projects are being complemented by new condominium units
within integrated communities being developed by both national and Davao-
Altaraza Town Center based property firms. Among the major developers expanding property
(3 towers) 36%
projects in Davao are Ayala Land, Megaworld, and Cebu Landmasters.
Source: Colliers International
Colliers projects more township developments in Davao City with the
completion of Davao Coastal and Bypass roads; the Mindanao Passenger
Other condominium units in Bulacan are located in stand-alone projects.
Railway; and expansion and modernization of Davao International Airport.
These include Urban Deca Marilao which launched three towers from 2017
These projects should further enhance Davao City’s competitiveness as a
to 2018, offering 312 units.
property investment hub and ensure its attractiveness even beyond the
Projects in the pipeline include the seven-tower Cheer Residences by SMDC term of President Duterte. Udenna Corporation president Dennis Uy has
that is located beside SM City Marilao. expressed his plan to modernize Davao International Airport. In our opinion,
it’s only a matter of time before Uy’s Udenna Corporation maximizes its
Overall, condominium stock in Bulacan should reach 1,735 units by 2020, up
operation of the Davao Airport. We see the firm aggressively expanding its
from 509 units in 2018.
footprint in the city and its environs similar to its strategic acquisition of land
We expect stronger condominium launches and take-up in Bulacan following in Metro Clark.
the major public infrastructure projects due to be completed from 2022 to
2023. These should be complemented by office spaces developed alongside Office developers cash in on new infrastructure
these condominium projects. As of the end of 2018, total gross leasable office space in Davao reached
270,500 sq metres (2.9 million sqfeet) with 60% located in Lanang and
Bulacan vertical residential supply forecast, (units) Poblacion. Total office stock grew by 26% YOY.
Location End-2018 2019 2020 Total With developers cashing in on the rising demand and completion of major
Bulacan 509 112 1,114 1,735
transportation infrastructure, we expect around six more buildings to be
completed within the next two years with a total gross leasable area of
Source: Colliers International 71,200 sqmetres (766,100 sqfeet) or around 35,600 sq metres (383,100 sq
feet) per annum from 2019 to 2020. By the end of 2020, we project total
DAVAO: TO SUSTAIN BUOYANCY office stock in Davao City to reach 341,700 sqmetres (3.7 million sq feet), up
26% from 2018.

POST-DUTERTE Davao Office (% share of new supply 2019-2020)

Colliers believes that the completion of infrastructure projects in the

Davao Park District 41%
pipeline should further enhance Davao’s stature as a key outsourcing hub in
Source: Colliers International
the country.
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Davao office supply forecast, GLA (sq metres) Aside from the Davao Airport expansion, other infrastructure projects likely
to sustain the demand for township projects in Davao City are the Davao
Location End-2018 2019 2020 Total
coastal and bypass roads and the Mindanao Railway.
Davao City 270,500 48,300 22,900 341,700 Davao Condominiums (% share of new supply 2019-2023)
Source: Colliers International Davao Park District 15%
Condominiums to complement offices Matina Enclaves 11%
By the end of 2018, Colliers recorded a total stock of around 9,800 Azuela Cove 1%
condominium units in Davao City. From 2019 to 2022, we expect the Source: Colliers International
completion of about 5,700 additional condominium units. These public projects are due to be completed between 2021 and 2022 and
are likely to contribute to higher land and property prices in Davao in the
Davao vertical residential supply forecast, (units)
next few years. These projects should also complement national and Davao-
Location End-2018 2019 2020 2021 Total based developers’ plans for township development.
Davao City 9,844 770 2,490 2,390 15,494
Davao vertical residential prices, (PHP/sq m, 2013-2018)
Source: Colliers International
150,000
Davao upcoming infrastructure projects and townships
100,000

50,000

Davao Airport Expansion (2021)

-
Azuela Cove
2013 2014 2015 2016 2017 2018
Source: Colliers International

Davao Park District

Davao City By-pass Road (2022)
Davao lot only residential prices, (PHP/sq m, 2013-2018)
Davao Sasa Port (2023) 12,000
Davao Global Township
Matina Enclaves 11,500
Mindanao Railway Davao 11,000
Davao Coastal Road (2021) City Station (2022)
10,500
Source: Colliers International. Scale: 1cm: 5km.
10,000

9,500
2013 2014 2015 2016 2017 2018
11 Source: Colliers International
Primary Author: For further information, please contact:
Joey Roi Bondoc David A. Young
Manager | Research | Philippines Chief Operating Officer | Philippines
+632 858 9057 +632 858 9009
Joey.Bondoc@colliers.com David.A.Young@colliers.com

Richard Raymundo
Managing Director | Philippines
+632 858 9028
Richard.Raymundo@colliers.com

Donica Cuenca
Research Analyst | Research | Philippines
+632 858 9068
Donica.Cuenca@colliers.com

Martin Aguila
Research Analyst | Research | Philippines
+632 863 4116
Martin.Aguila@colliers.com

About Colliers International Group Inc.

Colliers International (NASDAQ, TSX: CIGI) is a leading global real estate services and investment management company. With operations in 68 countries, our14,000 enterprising people work collaboratively to provide
expert advice and services to maximize the value of property for real estate occupiers, owners and investors. For more than 20 years, our experienced leadership team, owning approximately 40% of our equity, have
delivered industry-leading investment returns for shareholders. In 2018, corporate revenues were $2.8 billion ($3.3 billion including affiliates), with more than $26 billion of assets under management.
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The information contained herein has been obtained from sources deemed reliable. While ev ery reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any
inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report.