Investment lure of Central Luzon cited

http://www.malaya.com.ph/index.php/special-features/property/29529-investment-lure-of-central-luzon-cited
The North Luzon Urban Beltway is the next investment destination of the country due to its infrastructure developments, pushing manufacturing to Clark Freeport Zone (CFZ) and Subic Bay Freeport Zone (SBPZ)  and business process outsourcing in Metro Clark.
According to the CBRE Central Luzon Urban report released yesterday, the development of infrastructure has fuelled the strengthening of Central Luzon’s economic fundamentals.
The property consultancy firm sees renewed demand for manufacturing, BPO and residential sites in Central Luzon as the economy of the region continues to grow.
The presence of the North Luzon expressway, the Subic-Clark-Tarlac expressway, the Clark International airport has driven investors to pour multiple high value investments in Clark and Subic—the likes of Texas Instruments and Hanjin.
“The Northern Luzon Urban Beltway is transforming its landscape into a high potential investment destination. This is largely brought about by infrastructure developments that paved way to increased economic activity in Central Luzon as businesses started expanding from Metro Manila to its peripheries,” CBRE said.
The continuous infrastructure developments such as airport, seaport and highways between the Clark and Subic has opened up new areas of investment for the manufacturing industry as these foreign firms realize the country’s high investment potential.
The report said Japanese and Taiwanese firms lead the upturm in the manufacturing industry at both zones.
Clark Development Corp. (CDC) recorded 50 of the 207 contracts signed in 2012 to be industrial developments.
Expansion of Japan’s Yokohama Tires will be completed by 2017 while Ingasco Inc. also of Japan is set to develop a $40 million air separation plant which aims to support the immediate demand of manufacturing firms in CFZ. Another Japanese company aircraft parts manufacturer, Jamco, is set to invest P172 million for a facility to produce commercial aircraft interior components and subassembly parts.
Robinsons Land Corp. will infuse $300 million for a new branch of Go-Hotels chain in Clark while Megaworld Corp. is reported to have made a deal with Clark Development Corp. to develop 550 hectares of the former US military property into a mixed use complex. SM Prime Holdings is also adding 89,000 square meters of floor area to its SM Clark Mall.
Subic Bay Freeport Zone is gaining recognition for its leisure tourism developments especially with its beaches and other destinations like Treetop Adventure, Zoobic Safari, and Ocean Adventure.
Tourist arrivals grew from 593,000 in 2010 to 1.7 million in 2011 which spurred retail activity. Last year, Ayala opened its mall
Harbor Point inside SBFZ while a new SM opened in Olongapo City.
According to the report, the entry of new firms and the expansion of current locators increased occupancy in warehouses.
Leasable industrial spaces trimmed down to 6.81 percent vacancy rate in SPZ and 7 percent in the SBFZ.
Pioneer developers in CFZ sublease at an average of PP123 per square meter per month  for combined warehouse and land lease packages. Lease rates inside Subic’s industrial parks range from P95 to P240 psqm/month.
In the office space, CBRE said the implementation of PEZA (Philippine Economic Zone Authority)  Board Resolution No. 12-329 has restricted fiscal tax incentives for new developers in Metro Manila and Metro Cebu but has  puts Metro Clark in a sweet spot for office developers as it is the only established IT-BPO hub in the country still enjoying tax incentives for new IT Parks and facilities developers.
Off-shoring and outsourcing continue to drive the demand for office spaces in the Clark Freeport Zone.
As of December 2012, Clark registered a low vacancy rate of 6.54 percent out of the total supply of 126,589 square meters leasable office space.
Demand is expected to increase with the recent mergers and acquisitions of top BPO locators in Clark.
In 2012, iQor, a New York City-based data analytics and outsourcing solutions firm, acquired one of the pioneer BPO firms in Clark, Cyber City Teleservices.
NCO Group Inc. has merged with APAC Customer Services Inc. under the umbrella corporation Expert Global Solutions (EGS).
“The PEZA resolution has emphasized Metro Clark as a high potential investment destination. The large talent pool combined with developments in infrastructure of the region has helped in sustaining the BPO growth.
With the entrance of new locators and expansion of previous tenants in the BPO industry, the real estate office segment is seen to expand in the coming years,” CBRE said.
CBRE said an increase in expatriates and on-site working for the different locators raised the demand for quality residential developments, placing the pressure on developers to increase supply.
A total of 11 new direct leases were contracted by CDC on the same year, including the expansion of Yokohama Tires Philippines.
Central Luzon region recorded 16,000 foreign citizen households in 2010, ranking third in the country, next to the National Capital Region and the Autonomous Region of Muslim Mindanao.
As of 2011, the average occupancy in these residential developments is estimated at 90 percent. These residential developments most often in the form of subdivisions with a configuration of 50 to 400 square meters in size, with lease rates ranging from P26,000 to P70,000 per month.
CBRE said developers have started launching new residential projects inside the CFZ and its fringes. To date, four horizontal subdivisions and two condominium projects are adding up to the supply of residential dwellings in CFZ with about 1,076 units.
These projects mainly cater to expatriates working inside the CFZ. One of these projects, for instance, is exclusively marketed to Korean nationals.
Outside the CFZ, national players are also trying to get a hold of the growing residential market driven by OFW remittances and flexible bank lending terms. In 2012, Ayala launched the second tower of their Marquee Place Residences in Angeles City, adding another 155 units in the market. Other players competing in the area are Robinsons Homes, Vista Land, Filinvest, Pro Friends, Fil-Estate and Moldex Realty.
CBRE said residential demand is seen to grow with the upcoming investments and expansion in the CFZ.
Vertical residential developments are now seen rising in the area as developers try to maximize their investment on land.