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In a report released in March 2021, Colliers Philippines noted that infrastructure implementation will play a vital role in sustaining the property sector’s growth amid the disruption brought about by the pandemic, according to a report by Philippine Daily Inquirer.
Data from the Department of Budget and Management show that infrastructure spending fell 23 percent to P681 billion in 2020, from the P881.7 billion recorded in 2019, as the government realigned funds for its COVID-19 response.
Infrastructure spending accounted for about 4.5 percent of the country’s gross domestic product (GDP) in 2020, down from 5.4 percent in 2019. The government plans to spend at least P1.17 trillion this year, equivalent to 5.9 percent of GDP—still higher than the 2 to 4 percent average from 2011 to 2016.
In our view, the higher allocation for infrastructure spending is likely to stoke the economy including the property sector. Among the areas that will benefit is Metro Manila, especially with big-ticket projects such as the Manila Subway included in the government’s priority list.
Over the past few years, Metro Manila’s potential for economic expansion has been constricted by a poor infrastructure network brought about by decades of underspending.
The current administration is addressing this by identifying major infrastructure projects that will be built in Metro Manila over the next three to five years. Among the infrastructure projects that the government intends to develop is the Manila Subway system. Colliers sees this gargantuan project benefiting Quezon City property over the medium to long term.
With improving connectivity given the construction of Manila Subway, MRT-7 and the common LRT-MRT station, we see Quezon City becoming more attractive for mixed-use projects that feature office, residential, and retail projects.
These infrastructure projects should be complemented by ongoing efforts to refurbish and improve the MRT-3 line. Among the stations well suited for townships and estates is North Avenue given its interconnection with other mass transportation systems. We see Quirino and Tandang Sora stations providing residential support to offices in the North Avenue station. The latter is also a practical choice for hotel projects as we see it capturing demand from Northern Metro Manila and nearby provinces such as Bulacan.
Benefiting from infra
Colliers Philippines believes that Quezon City will also benefit from the completion of several big-ticket projects.
One of these is the Skyway Stage 3, an elevated expressway that runs from Buendia in Makati City to the North Luzon Expressway in Balintawak in Quezon City. It was completed in December 2020. Another is the Skyway C6 expressway, a 34-km expressway from Skyway/FTI to Batasan Complex in Quezon City. The project—which is expected to ease traffic congestion along Edsa, C-5, Ortigas Avenue and Extension—broke ground in 2018 and is scheduled to be completed in 2022.
The MRT-LRT common station—a connecting terminal for four train lines, namely, MRT-3, LRT-1, MRT 7 and the Metro Manila Subway—meanwhile aims to ease passenger transfer and improve connectivity between rail lines. The project is scheduled for completion by December this year.
Also seen to significantly benefit Quezon City is the MRT-Line 7, a 22.8 km, P69 billion railway project from North Avenue in Quezon City to San Jose Del Monte in Bulacan. The railway line will have 14 stations and is projected to serve about 350,000 passengers per day. Once completed in 2022, MRT-7 will decongest traffic in Caloocan, Commonwealth Avenue and Balagtas interchange at the North Luzon Expressway (NLEX).
Colliers also believes that the completion of the Bulacan International Airport, a 2,400-hectare, P736 billion aviation hub will also benefit nearby areas such as Quezon City, and strengthen its stature as a an important business district in Metro Manila.
With improving connectivity, we see Quezon City becoming more attractive for mixed-use projects that feature office, residential, and retail projects. These should also be supported by health facilities. With an improving infrastructure backbone and potential for a faster economic rebound, we see Quezon City becoming a viable business district in Metro Manila. This should likewise further raise land and property values in the area.