The Impact of the Mega Manila Subway Project on Real Estate
KB Realty Group sums up everything you need to know about the mass transit project slated to transform the urban commuter experience in the metro.
One of the most highly anticipated infrastructure projects in the pipeline is the Mega Manila Subway Project. Slated to be the country’s first underground rail, the mass transit project will operate 17 stations across 35 kilometers from Valenzuela down to Paranaque. With an operating speed of 80 kph, the subway system is expected to reduce travel time from Quezon City to Taguig from 1.5 hours to only thirty minutes. The public transport system will not only ease road congestion and improve accessibility, but also trigger an increase in land values in adjacent properties.
With new transport infrastructure usually comes more commercial and residential opportunities in real estate. Whether it be a tie-up with a private developer for a transit-oriented development or putting up malls and dining options nearby, mass transport infrastructure spurs more business activity and supports vibrant city living in the area. To see how these markets have performed during the pandemic, KB Realty Group assesses the areas where the subway stations are to be constructed.
Demand is increasing for majority of the areas with existing access to rail and bus routes.
Demand for listings in areas where stations of the Mega Manila Subway project are to be built showed an uptick in year-on-year pageviews. In Project 3 (Quezon City), Western Bicutan, and West Rembo in particular, pageviews for available listings on KB Realty Group showed tremendous growth – attracting a triple-digit increase in pageviews from 2Q 2020 to 2Q 2021. These areas were all strong rental markets, with over 70% of leads for listings within the city in 2Q 2021 going to properties for rent. It is also worth noting that these barangays are already key areas with access to public transport. Living in Project 3 would give residents access to both Katipunan LRT and Aurora Boulevard – a major road leading to the commercial district of Araneta City. Meanwhile, Western Bicutan and West Rembo flex relatively lower prices relative to their neighboring central business districts and also have easy access to bus routes and rail lines.
Many luxury properties are centrally located in areas with access to transport.
KB Realty Group data for 2Q 2021 revealed that in most of the assessed cities, available listings for sale belonged to luxury price segments. West Rembo and Bicutan had the largest share of luxury properties for sale, with most listings being concentrated in the 12M and up price range. Meanwhile, Ugong (East Valenzuela), Novaliches, and Ortigas (Avenue and CBD) had higher shares of economic listings compared to the other subway station areas assessed. As the project nears completion, prices of properties and land in the area may increase.
In the Asian Development Bank’s (ADB) book “Creating Livable Asian Cities” published in April 2021, studies by ADB’s economics showed that land values in areas within a kilometer from MRT-3 train stations increased since its contract was finalized in 1995. Average values for rental lots closer to the stations were estimated to have increased from PHP4,972 per sqm in 1995 to PHP16,036 per sqm in 2015.
Singapore, Quezon City contributed the most demand for properties in these areas.
Most property seekers from the Philippines looking into properties in the developing subway station areas were primarily from Quezon City, while Singapore contributed the most pageviews from overseas. The interest from Quezon City seekers may be attributed to the fact that nearly half of the planned subway stations will be developed in the city. Residents of the area will benefit from more alternative travel modes as well as linkages to existing rail stations. Meanwhile, Singapore continues to be an important trade partner of the Philippines. In 2019, Singapore was the Philippines’ top international investor and host to 4% of all overseas Filipino Workers.
In the search for the next home or workplace, accessibility will continue to be a top priority. The Mega Manila Subway Project lays the groundwork for not only a more connected metro, but also a more dynamic one. With demand for properties in the area continuing to rise and prices expected to as well, investors and developers may do well to consider maximizing current land values and pursuing available properties nearby and developing projects that complement the station.
