Why logistics is next big thing for Philippine real estate sector (BusinessWorld)

E-commerce giant Lazada has been scaling its logistics with the expansion of its warehouse and storage hubs in the Philippines
Photo: BusinessWorld

The logistics sector is expected to be the “next big thing” to watch in Philippine real estate, as it presents growth opportunities for developers amid the ecommerce boom, according to a report by Santos Knight Frank.

In its report “The Future of Logistics: A Real Estate Perspective,” Santos Knight Frank noted the logistics industry is seen to continue growing, alongside the economy and the property market.

“It is presently going through a remarkable evolution as market players consider escalating land values, transportation challenges, changing market dynamics and increasing competition in their strategy formulation and feasibility studies. Technology is playing a vital role that will define the future of logistics in the country,” Santos Knight Frank said.

“New regional areas will emerge as logistic battlegrounds, supported by improvements in accessibility and realization of infrastructure programs,” it added.

Some of the country’s top conglomerates have started developing industrial estates, and entered the logistics sector.

Ayala Land Inc. is venturing into industrial parks and warehouse facilities through Prime Orion Philippines, Inc. (POPI), which has been renamed as Ayala Land Logistics Holdings, Corp. Last April, the logistics unit broke ground for the P172-billion Laguindingan Technopark in Cagayan de Oro.

Additionally, the Ayala Group also owns 49% of the online shopping platform Zalora.

SM Investments Corp. (SMIC) has a minority stake in country’s largest integrated supply chain operator, 2GO Group Inc.

Metro Pacific Investments Corp. (MPIC) expanded into logistics in 2016 through the acquisition of a 12% stake in Air21. It also acquired a 20-hectare property in Cavite, as it plans to expand its warehouse business under Metropac Movers, Inc.

JG Summit Inc. has invested in internet platform Sea Limited, which operates Shopee. Its budget carrier Cebu Pacific last year said it was converting two of its planes to expand into cargo transport.

Filinvest Land, Inc. is planning to develop a logistics and industrial park in New Clark City, while the Marajo Group has introduced Space Solutions in Makati.

“These developers and companies place value on the smart application of technology to boost productivity and efficiency, offering value-added services and end-to-end solutions to clients, continuous expansion plans and capacity enlargement,” Santos Knight Frank said.

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4 June 2019

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