Connectivity and accessibility can boost the value of a property. These two elements can be achieved with more infrastructure developments.
With the new government committing to continue the Build Build Build (BBB) program of the previous administration, this is seen to accelerate the recovery of the country’s real estate market, according to Lobien Realty Group (LRG).
“The Philippines’ real estate industry needs all the help it can get as it continues to rebuild. LRG believes that continuing to Build, Build, Build is the key to a faster and more effective recovery not only for the real estate market but for many other industries as well,” LRG said in a recent report.
In his first State of the Nation Address (SONA) in July, President Marcos said the new administration is aiming to build more projects by keeping infrastructure spending at five to six percent of the country’s gross domestic product (GDP) in the next six years.
Apart from the real estate sector, infrastructure development is also seen to be a growth driver of the Philippine economy in the next 12 months, according to chief executive officers (CEOs) in the country.
Results Management Association of the Philippines (MAP) and PwC Philippines CEO Survey 2022 showed that 62 percent of 119 CEO respondents said infrastructure development will be a growth driver for the economy. The CEO respondents also said infrastructure development is the fifth priority area that the new administration should focus on.
Ease of access
“Accessibility is one of the key considerations in choosing a location for work or for one’s residence. Continuing the BBB will greatly improve ease of access to locations outside of Metro Manila which then makes these areas more attractive to potential locators,” LRG COO Jericho Linao said.
“Improved accessibility to the nearby provinces helps to further widen the scope of real estate projects as developers begin to branch out and build in these locations,” he added.
LRG said that in Metro Manila, the BBB program has paved the way for the rehabilitation of the MRT-3 which has greatly helped the public in their daily commute from the northern to the southern parts of the metro.
“Repair and construction of roads and highways including the building of Skyway Stage-3 which has greatly improved travel time from Metro Manila going to the northern part of Luzon has been attributed to the BBB,” LRG said.
These projects decongested major roads, enabling faster exchange of products and services and increased the accessibility of Central Business Districts throughout Metro Manila thereby gaining newfound interest of real estate investors to open up businesses there.
Higher property values
As infrastructure projects add value to nearby properties, LRG also pointed out that the BBB projects help in increasing the value of properties in its covered locations.
Provincial areas are also seen benefiting from infrastructure development. Colliers Philippines, for instance, highlighted the importance of infrastructure in raising the attractiveness of office and residential projects especially outside Metro Manila.
“This is likely to be supported by decentralization which the president also emphasized in his speech,” Colliers said, referring to the President’s SONA.
For his part, LRG’s Linao said the benefits of infrastructure projects in Metro Manila are also seen to impact the real estate market of nearby provinces.
“The pandemic has made us realize the importance of residing or working in places which are not heavily congested and have access to fresh air,” Linao said.
In all, Linao believes that BBB projects should continue to expand in areas where there are still vast amounts of land which are not yet developed.
“The provinces in Central Luzon would be a good next area to cover so that real estate developers would start to build projects in them, thus spreading the growth of real estate developments in currently untapped locations,” Linao said.