How Should the Pandemic Change the Way We Invest in Real Estate in the Philippines?

Mixed-use developments are in, and entrepreneurs should start looking at emerging growth centers.

The COVID-19 pandemic has been tough on all industries, but the real estate sector may yet prove to be resilient. Land values continue to appreciate despite a brief slowdown in 2020, and experts project a significant bounce-back in 2021 to 2022. It’s a prime time to be investing in real estate right now, but as you might expect, the game has changed a little because of the pandemic.

The best strategies for investing in real estate in the Philippines now must consider major shifts in buyer behavior brought about by COVID-19 and the resulting quarantines. If you want to invest wisely, here’s what you need to know:
Increasing demand in developments with wider outdoor spaces.

Buyers have shown a growing preference for developments that offer spacious areas or have outdoor amenities, as these make for relatively safe communities amid the current health crisis. After all, home and business owners want to ensure that their new spaces present as little health risk as possible. And more often than not, these are located in cities with lower population density.

Take Central Luzon, for instance, which has emerged to become a growth powerhouse in the Philippines. According to a January report released by Colliers, Central Luzon was one of the top investment destinations in the Philippines in 2020, accounting for P576 billion or 56.5% of all investments made in the country.

Ayala Land, Inc. (ALI) has recognized the region’s potential, which is why Alviera, a 1,800-hectare master-planned estate in Porac, Pampanga, was developed in partnership with Leonio Land Holdings Inc. Alviera houses strategic zones that offer its locators economic incentives, strong linkages to major thoroughfares, and a wide range of complementary developments and amenities.

Relative proximity to Metro Manila

Many buyers, however, still prefer to invest in properties that are easily accessible from Metro Manila. According to a report, two of the most promising locations are no more than 90 minutes away from the capital region. Silang, Cavite has seen an impressive 57.29 percent increase in leads over the past year, while Santa Rosa enjoyed a 41.5 percent increase.

Business is the main reason for this trend. Both locales cater easily to individuals who want to keep their jobs in the Metro, but come home to a quieter city. Shipping of goods is another major factor, with companies opting to warehouse outside of Manila’s borders for efficient deliveries—with Pampanga being the major player in such an industry.

Growing preference for mixed-use developments

The pandemic has also increased interest in developments in both residential and commercial zones. It’s no surprise, though, given the convenience offered by mixed-use estates. The limitation on movement necessitated by quarantine was largely mitigated for individuals living in such properties.

For instance, being able to walk to the grocery rather than drive resulted in overall better quality of life. Accessibility and practicality proved to be benefits that buyers were willing to invest in for the long term.

Developments such as Ayala Land’s Vermosa in Cavite City offers completeness and convenience in a suburban setting, with 700-hectares of prime property integrating residential, retail, and business sectors. It also projects to be a major draw for buyers who enjoy active, healthy lifestyles, and businesses that cater to this specific market—housing its very own sports hub, as well as people-centric streets and parks with dedicated pedestrian sidewalks and bike lanes.

The perceived benefits are further boosted for developments with significant industrial and business zones, like Ayala Land’s Cresendo in Tarlac City, which is poised to be the city’s local yet modern downtown.

The 290-hectare master-planned estate blends residential, institutional, and commercial spaces such as a school managed by Don Bosco Technical Institute, with an industrial park positioned for manufacturing, logistics, and distribution business locators. Its commercial district, on the other hand, welcomes local to multinational businesses to purchase shophouse and commercial lots. In all, the Cresendo community opens up inclusive living and commercial spaces, making it a worthwhile investment for both homeowners and businesses.

Mixed-use developments are also strong candidates for investment outside of Luzon. South Coast City in Cebu, for instance, projects to become the gateway growth center of the region, strategically linking North and South Cebu with Mactan through the city’s major infrastructure upgrades and its integrated business and entertainment centers. Its District Square, on the other hand, offers an unrivaled commercial address—owing to its prime waterside location and features—and investment opportunity in its few remaining lots.

The COVID-19 pandemic has changed real estate buyers’ attitudes to a significant degree, and this represents a lot of opportunities for investors who are willing to adapt to them. Smart investments can now be made in a greater number of areas than ever before and this rings true for business and residential spaces in mixed-use estates.

If you’re looking to grow your real estate portfolio in the coming years, mixed-use developments might be your strongest bet.

Learn more about Ayala Land’s Vermosa in Cavite, Alviera in Pampanga, Cresendo in Tarlac, and District Square South Coast City in Cebu by visiting www.ayalalandestates.com, and follow Ayala Land, Inc. on Facebook for updates.