Pivoting to Industrial Property Investment: A Business Resumption Guide

by PRIME Philippines Research & Advisory  June 10, 2020

In recent months, industry leaders and real estate practitioners alike have been touting the industrial property market as the “next big thing” or the “asset class to watch,” but what specific properties can be considered as worthwhile investments these days? How can one take advantage of the best deals on the market?

 

With the onset of the COVID-19 pandemic in the country, industrial spaces such as storage facilities or data centers have remained relatively unscathed. Unlike other classifications of commercial property such as offices or retail spaces that traditionally see greater human density, industrial properties are seen as a safe bet that can be used as strategic long-term assets.

 

Despite quarantine measures put in place and social distancing rules still being applied, there remains robust and marked movement in the industrial real estate market. From warehousing as small as 500 square meters in Metro Manila to large swathes of land measuring in the hectares in outlying provinces, inquiries in the industrial property market have remained resilient throughout quarantine.

 

E-Commerce Dictating Decision-Making

 

In recent weeks, PRIME Philippines has seen a significant increase in the demand for warehouse and storage facilities grow from the previous year, likely due to the increased online spending by people ensconced in their homes. Last-mile delivery and other logistics solutions in Metro Manila and nearby provinces have been crucial in linking local businesses to their customers during the pandemic.

 

With the growing reliance on e-commerce and with home delivery being highly unlikely to disappear any time soon, entrepreneurs and business leaders should take this time to explore alternative forms and sizes of logistics centers, and perhaps even reconsider the way they acquire such distribution hubs. From leasing short-term storage spaces to purchasing land for long-term warehouse facility development, there exists a wide range of choices in the market for every enterprise.

 

 

Industrial Land for Long-term Investment

 

PRIME Philippines has also seen a marked interest towards property investments further out of the capital, as larger cuts of land suitable for any number of developments have been seen as safe havens for investors during this period of economic instability. Alongside the government’s thrust to decentralize high-density Metro Manila, end-users and business owners alike are expected to seek properties outside of heavily-congested urban cities to redevelop for industrial use. Even now, we see that investing in properties with future potential for building and leasing out developments will experience a boost as land values have some of the most steadily resilient growth rates in the country.

 

Land acquisition and development, already a top-choice investment strategy for some Filipinos, will likely gain further traction within customer segments that previously only relied on alternative investment vehicles. Industrial properties that in the past may have failed to spark much interest due to their distance from urban centers (ie. in Laguna, Pampanga, Tarlac, Iloilo etc.) are expected to grow in demand among a specific and motivated buyer class. In this regard, traditional investors seeking to secure the best deals should focus on moving as quickly as possible before an emerging investor class cannibalizes the market.

 

Seizing Opportunities Now

 

May it be acquiring or disposing of an industrial property, having a broker to handle your transactions is ultimately the best way to start. Especially now when the 2019 novel coronavirus has led to drastic disruptions in our normal movement, being able to find the right end user with the most advantageous deal has become more difficult than ever before.

 

PRIME Philippines, one of the country’s leading commercial real estate advisory firms, is here to help you take the first step in making the most of the post-COVID-19 industrial property market with our new Business Resumption Service. From matching properties, handling marketing, processing paperwork, facilitating negotiations and closing the deal, we at PRIME Philippines assure you an end-to-end service to best maximize your investment. For inquiries, please contact any of our associates below:

 

Mhel Dellosa, Manager for Commercial Property Investments, +639175266143, [email protected]

 

Pia Aguirre, Manager for Commercial Property Investments, +639176314821, [email protected]

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