Land in Metro gets scarce; prices soar
by IRMA ISIP
Malaya Business Insight
Old buildings and factory sites in Metro Manila are giving way to office spaces and high-rise apartments as land gets more scarce.
Victor Asuncion, head of research of property consultancy CBRE said Metro Manila is running out of space for property developers, fuelling redevelopments in certain areas.
Asuncion said the trend has pushed prices in Fort Bonifacio, up 25 to 30 percent this year making it too expensive.”
“The problem faced by developers is that they are running out of land to develop (in Metro Manila,” Asuncion said.
Developers now go to areas surrounding business districts. Asuncion said for example that redevelopment in Mandaluyong is extensive, pulling down factories in favor of residential and commercial condos.
Same thing is happening in Makati, Asuncion said, where medium-rise buildings are taken out and rebuilt as high rises. .
“This is because those buildings were built for traditional offices and not for BPOs,” Asuncion added.
Some of the industrial areas are converted around the Metro Manila environs and this would continue, according to Asuncion.
“They determine the highest investors of the property and they go for it. In Makati, most of the highest investors are residential condos catering to BPOs,” Asuncion said.
He said that in Makati, in Malugay area, Avida and Linear condominiums are built in spaces used to be occupied by light industry manufacturing and warehouses.
Asuncion said the land values there have jumped to P60,000 to P100,000 per square meter .
At this price, Asuncsion said, these areas are just too expensive for an industrial space.,
“You have to pay commercial real property tax for something that is underutilized. So you give way to the highest investor which is a condo or an office or a mall where they can realize the true value of the property,” he said.