Cold storage is hot. Sizzling, actually. And while that doesn’t make logical sense, a recent webinar organized by Santos Knight Frank, AmCham Philippines, and BDO Unibank concluded the hottest real estate sector in the Philippines just might be cold storage.
According to the Cold Chain Association of the Philippines, the country’s cold storage industry capacity will grow by 10 percent this year. With industrial and logistics real estate currently booming in the Philippines, the rapid growth of cold storage was not entirely unexpected.
“The property landscape has experienced a tremendous shift since the pandemic, yet the industrial and logistics real estate sector, including cold storage, remains to be the most stable asset globally,” Kash Salvador, Head of Investment & Capital Markets of Santos Knight Frank, said. “In the Philippines, more investors are looking to place significant capital into the industrial sector, including cold chain logistics.”
Perhaps the only thing standing in the way of even more growth for the industrial and logistics property market is space. Salvador noted that property owners and landlords should consider converting non-performing real estate near Metro Manila into industrial and logistics space.
“In Metro Manila, the former industrial areas have been converted into commercial properties, limiting the options for locators in the city. While there are opportunities outside Metro Manila, locators are balancing the costs between staying within the city and exploring provincial areas, considering aspects such as connectivity, infrastructure, and power,” Salvador stated. “This presents property owners with a huge opportunity to cater to these occupiers.”
It was added that strong demand for industrial and logistics can be a key component to the property market recovery in the Philippines. Salvador believes it will not only help the real estate sector as a whole but increase the economic activity across the country as well.