Airport Cities: Pasay, Cebu, Bacolod, and Davao on the Rise as Township Hubs
Table of Contents
- Supply
- Demand
- Luzon
- Visayas
- Mindanao
- FIGURE 13. Location of seekers in Mindanao for properties for sale
- FIGURE 14. Location of seekers in Mindanao for properties for rent
- FIGURE 15. Location of seekers in Mindanao for properties for rent 2017-2018
- FIGURE 16. Location of seekers in Mindanao for properties for rent January-September 2019
- Conclusion
EXECUTIVE SUMMARY
The real estate industry has come a long way following years of a crunching property demand affecting the Philippines. Alongside the age of modernization and a rising economy across the world, properties have started to take new form: developers dot the cityscape with townships to ride the tide of a new wave of real estate.
Townships are defined as large-scale, integrated, mixed-use developments that can be considered the “jack-of-all-trades” of the property scene. Townships are urbanized projects that dabble in a little bit of everything including, but not limited to, residential units, office spaces, commercial areas, and hospitality. To put it in simpler terms, townships contain a mix of uses that are integrated to provide the perfect free-flowing lifestyle that Filipinos will always be glad to have.
AIRPORTS AND TOWNSHIPS: BOOSTING EACH OTHER’S GROWTH
Alongside this continuous growth in the Philippine property industry, improving economic conditions have flowed into all local sectors as well—supplemented by a booming age of infrastructure. The developing age has consequently brought about structures that contribute to maintaining healthy macroeconomic fundamentals in the country. Airports, for example, are particularly important centers of business that contribute to promoting economic and social integration—thus complementing the uptrend in real estate. Their impact goes far beyond the direct effect of just airport operations on its neighboring cities.
Being the gateways to different important destinations, airports interconnect important centers of business, which boosts mobility as a whole. With air transport being the principal means by which people can access different parts of the Philippines, airports have also contributed greatly to the country’s tourism and the real estate industry as a whole. Airports play a major role in facilitating real estate development across popular destinations, with the Philippines reaping this benefit because of its archipelagic topography.
SUPPLY
Supply for real estate has been ballooning due to the ever-growing demand for properties. Developers who have often focused on the Philippines’ most popular island, Luzon, have started building in Visayas and Mindanao, particularly in areas close to airports, where tourists, migrants from other cities, and returning OFWs look for their new home, if not their next real estate investment.
LUZON
The Ninoy Aquino International Airport is the Philippines’ gateway to the capital, Metro Manila. Located along the border between the cities of Pasay and Paranaque, about 7 kilometers south of Manila proper and southwest of Makati, NAIA is the main international terminal for travelers to the country; it is the only airport serving the metro. Its proximity to Pasay City has brought about several new townships around the city that take advantage of the increased consumer traffic and rising local economy.
One of these is the well-known Newport City of Megaworld Corporation. It is a 25-hectare development designed to fully integrate the luxury residences and prime office spaces to entertainment complexes right across the NAIA terminal 3. With about 6,100 condominium units, it has benefited greatly from the traveler traffic sourced from NAIA.
In the metro, specifically in Pasay City, the number of listings doubled in 2018, according to KB Reality Group data. Pasay remained in the top 10 cities with the most number of listings—and continued to grow in the first three quarters of 2019 owing in part to the rising infrastructures surrounding it. From contributing 1.49% to the number of listings for rent in the metro in 2017, Pasay saw a significant increase in 2018 as the number of total listings almost doubled for Luzon. Also noteworthy is the further increase in the period of January to September of 2019, where Pasay’s 2.22% contribution to the market actually translates to almost 25% of total properties for rent in 2017.
VISAYAS
Mactan-Cebu
The country’s second busiest airport, Mactan-Cebu International Airport, has led to significant upgrades to its neighboring economies in the Visayas region. The recent expansion in the form of a second terminal only allowed more room for development in Cebu, the location for one of the top Central Business Districts in the whole country. Metro Cebu is the second-largest metropolitan area in the Philippines, with a fast-growing real estate industry to complement the improving macroeconomic conditions.
Ayala Land’s Eco-township, Mactan Seagrove, will add a sustainable estate in Mactan, Cebu. This township allows for mangrove ecosystems to thrive, and protects and nurtures local communities in Cebu. The resort and retail development brings to Cebu its first mixed-use boardwalk together with a central network of lagoons, a leisure-inspired pedestrian corridor, and an expansive mangrove forest.
The Mactan Export Zone (MEZ 1) is an area popular for real estate development, with a mini township called “Mahi” planned from AppleOne Properties Inc. (API), a homegrown developer from Cebu. API has also recently announced its plan to add yet another mini township to its portfolio, this time in the Banawa area of Cebu City. Banawa is just 12 kilometers away from the Mactan-Cebu International Airport, making it easily accessible to tourists, investors, and expatriates looking to relocate to Cebu.
Megaworld’s Mactan Newtown is one of the very first townships built outside Metro Manila. It is located in Lapu-Lapu City and is a few minutes away from the Mactan-Cebu International Airport. Since its construction in 2014, Mactan Newtown has been one of the major BPO hubs in Metro Cebu. Its Cyberpark, One World Tower, and Two World Center serve as a home to several notable and international companies.
FIGURE 2. DISTRIBUTION OF PROPERTY LISTINGS IN VISAYAS
JANUARY TO SEPTEMBER 2019
The recent expansion of Mactan-Cebu International Airport also added to the onward progression of the municipality. According to Joey Roi Bondoc, Senior Research Manager of Colliers International Philippines, because direct flights to Asian countries are available in the said airport, foreign retirees are now eyeing Mactan.
The rising local economies of Mactan, Cebu Business Park, and Cebu IT Park are some of the most popular areas in Visayas for listings, with the trend likely to carry over into 2020.
FIGURE 3. DISTRIBUTION OF PROPERTIES FOR SALE IN VISAYAS
JANUARY TO SEPTEMBER 2019
According to KB Reality Group, in the first three quarters of 2019, Cebu has remained as the top city with the most listings of properties for sale in the Visayas area, contributing almost 29% of all listings in the category. The staggering amount implies constantly increasing supply to cater to the ballooning interest from property-seekers.
Bacolod
Not one to lag behind in the Visayas region is Bacolod City—widely known as the City of Smiles. The city houses a highly urbanized area in Western Visayas, poised for exceedingly high economic growth in the years to come. Metro Bacolod is home to the Bacolod-Silay Airport, located in the nearby Silay City.
Metro Bacolod is set to be one of the government’s infrastructure hot spots, with both local and national projects aiming to further pull up its local economy. Bacolod is already the Philippines’ third fastest growing economy in terms of IT and BPO activities, but its landscape is set to further improve with the help of the soon-to-rise developments within the city. With its image as a key investment destination outside the capital, Metro Bacolod has attracted a lot of interest in the real estate scene.
Because the volume of travelers to and from Bacolod had a sudden increase, a proposed expansion for the Bacolod-Silay Airport was called for.
In 2015, Ayala Land broke ground for Capitol Central, a mixed-use township in Bacolod City situated less than five kilometers away from the city center and 16 kilometers away from the New Bacolod-Silay Airport. Ayala Land’s presence in Bacolod brings its signature integrated and master-planned estates out of Manila in the form of a nine-hectare township with a mixture of residential, retail, and office developments.
Northill Gateway, located along the new Circumferential Road in Bacolod City corner Talisay City, is going to be the first-ever commercial and lifestyle hub along the area. Circumferential Road has direct access to the new Bacolod-Silay Airport. Northill Gateway has upscale residential spaces, amenities, offices, and wellness and sports facilities. This aims to give not only the travelers but also the people of Negros Occidental a place to hang out and unwind.
FIGURE 4. CHANGES IN PROPERTIES FOR RENT IN BACOLOD
KB Reality Group’s data shows that Bacolod City has seen an upward trend in the last three years, being one of the top 10 cities with the most listings for properties for rent in Visayas. The number more than doubled in 2018 and 2019, a testament to its improving local economy.
MINDANAO
Davao
Davao City—the country’s fifth-largest economy—has Francisco Bangoy International Airport, more commonly known as the Davao International Airport, which has contributed to the rise in developments and infrastructures in the region. The business sector in Davao has been thriving, the effects of which flowed into its likewise rising real estate industry.
Davao Global Township is a new township currently being developed by Cebu Landmasters, Inc. It’s a former golf course and will be turned into a 22-hectare central business district in Matina. This is a 30-minute drive away from Davao City’s Francisco Bangoy International Airport (or Davao International Airport).
KB Reality Group’s data reveals that Davao has remained as the number one city in Mindanao with the largest number of listings—for both properties for sale and rent from 2017 to 2019.
FIGURE 5. CHANGES IN PROPERTIES FOR SALE IN DAVAO
Properties for sale in Davao, in particular, have seen impressive growth in the first three quarters of 2019 as compared to its contribution to the real estate supply in Mindanao in 2017 and 2018. As of September 2019, Davao already contributes more than half of the properties for sale in the region. The growth is even more significant considering that the number of properties for sale in 2019 nearly doubled from that of 2017.
FIGURE 6. DISTRIBUTION OF PROPERTIES FOR RENT IN MINDANAO
JANUARY TO SEPTEMBER 2019
The trend extends to properties for rent in Mindanao, with more than 57% being located in Davao. The second most-prevalent city for properties for rent, Cagayan de Oro, is far behind with almost half the number of properties.
DEMAND
LUZON
Luzon had a real estate boom in 2018, with the inquiries on KB Reality Group showing a 455.95% increase from 2017. Inquiries for listings for rent in Pasay City, in particular, grew by more than five-fold (+524.54%).
FIGURE 7. TOP CITIES IN LUZON FOR PROPERTIES FOR RENT
2017-2018
As of the nine-month period between January to September 2019, inquiries about properties for rent in Pasay City already accounted for 4.49% of the total, only signifying how its real estate scene is developing in time for the proposed rehabilitation project for NAIA.
VISAYAS
Cebu
FIGURE 8. TOP CITIES IN VISAYAS FOR PROPERTIES FOR SALE
2017-2018
Cebu continues to be the most popular city in Visayas in terms of seeker interest for both properties for sale and rent on KB Reality Group. In the full year of 2018, inquiries about Cebu City’s properties for sale spiked by 208.38% from 2017, with numbers showing Cebu City accounting for 34.87% of properties for sale in the region.
Meanwhile, overall inquiries about properties for rent jumped by 242.70%, with Cebu City accounting for 61.19%.
FIGURE 10. TOP CITIES IN VISAYAS FOR PROPERTIES FOR RENT
2017 AND 2018
Residents in Cebu account for almost all of the inquiries for properties for sale in the region in 2017, with numbers diversifying in 2018 as more residents in Bacolod showed an appetite for real estate. From 2017’s 2.79%, Bacolod residents accounted for 6.68% of total inquiries into properties for sale in 2018.
In the first three quarters of 2019 alone, Cebu property seekers have already dominated the Visayas region in terms of appetite for properties for sale, accounting for 83.77% of searchers on KB Reality Group. Meanwhile, 4.34% of inquiries into properties for sale in Visayas already come from Bacolod.
Bacolod
Bacolod is also developing as a call center hub. Bacolod has contributed as a propeller for the good performance of Western Visayas’ economy for the past two years. This, along with the booming hospitality industry, helped Bacolod sustain its economic advancement.
FIGURE 12. LOCATION OF SEEKERS IN VISAYAS FOR PROPERTIES FOR RENT
2017-2018
In 2018, specifically, inquiries about properties for rent and for sale within Bacolod grew by a whopping 717.78% and 231.30%, respectively.
Bacolod residents rank third in their interest in properties for rent in Visayas, accounting for 4.34% of property searches from the region in the first three quarters of 2019.
MINDANAO
FIGURE 13. LOCATION OF SEEKERS IN MINDANAO FOR PROPERTIES FOR SALE
The demand for properties for sale from Davao shows a region with a steadily increasing interest in real estate. In 2017, Davao residents already accounted for 63.22% of inquiries. In 2018, with a net change of 40.62%, Davao residents accounted for 66.5% of inquiries for properties for sale in the region.
FIGURE 14. LOCATION OF SEEKERS IN MINDANAO FOR PROPERTIES FOR SALE
JANUARY TO SEPTEMBER 2019
The demand continued into the first three quarters of 2019, with 80.79% of inquiries coming from Davao.
FIGURE 15. LOCATION OF SEEKERS IN MINDANAO FOR PROPERTIES FOR RENT
2017-2018
The stable and rising demand for properties in these developing CBDs only show how far a local economy can go with the help of modern infrastructures like airports. The real estate industry has been finding more and more ways to keep up with the ballooning demand, as improving local economies pave the way for more available properties to those who seek them. This, in effect, ensures a stable supply for the country in the long run.
CONCLUSION
The country’s rising real estate industry has come a long way, and the consistently rising demand and supply for properties across the country can attest to this. With the golden age of infrastructure peaking every year, the promising future of the real estate industry remains to be seen.
Today, the growth is already apparent not just in Luzon, with Visayas and Mindanao seeing the rise of townships and other mixed-use developments in their regions. Alongside the rise of townships are the further improvements done on some of the busiest airports in the country, confirming the global nature of Pasay, Cebu, and Davao as areas for property investment.
