Drop in public construction to affect developers’ plans

CEBU, Philippines — If the contraction of public construction persists for the remainder of 2019, it is likely to become a growing concern among developers in the Philippines.

Colliers Philippines’ deputy managing director for Colliers CMIS (Asia’s Capital Markets and Investment Services) Leyo de Guzman warned that the government has to catch up in implementing the delayed projects for the rest of 2019, otherwise long term plans of developers may be affected.

Public projects such as roads, bridges, and airports should help decongest Metro Manila and raise land and property values outside the city, including Cebu.

“The public projects also help dictate the long-term plans of developers,” De Guzman said.

Public construction contracted by 27 percent in second quarter of 2019 but was offset by a 23 percent rise in private construction, which accounts for about 70 percent of the country’s construction sector.

This development indicates strong appetite for office towers, residential condominium, malls, hotels, and industrial parks throughout the country.

“We see ramped up construction in second half 2019 as the government catches up on its spending plan,” added De Guzman.

In the current economic climate, the opportunity is for developers to expand their office, residential and hospitality footprints outside Manila.

“Developers should seize this opportunity to build more offices in key hubs outside of the country’s capital and acquire land parcels near soon-to-be expanded and modernized regional airports,” De Guzman advised. (FREEMAN)