The local real estate in the Philippines is ready for its next phase. After the boom of residential units and office spaces, the Philippines real estate is gearing itself towards the growth of industrial buildings in the country.
To those who don’t know, industrial properties are used for commercial purposes. It can be factories or manufacturer buildings that help in growing the businesses in the country. Thanks to the increase of the country’s purchasing power, more and more buildings are needed to satiate the demand for various commercial materials. Aside from the purchasing power, the Philippines is also rich with workers, making it more tantalizing for foreign investors to invest here.
According to Jettson Yu in his interview with Rappler, countries like China, Japan, and Taiwan are interested in investing industrial buildings in the Philippines. Yu says that a major investor from Taiwan is looking for a land of 1,000 hectares to start an industrial facility. This can be dream come true if the Philippines will have an improvement in terms of electricity, water, and corruption.
Today, industrial buildings are 3rd among non-residential properties that have been approved in the country. But it’s still a smaller niche compared to commercial properties that have 59.4% of all non-residential buildings.
But what does the rise of industrial real estate would mean in our country and to the whole industry?
1. Higher Yields
One of the promises of industrial real estate is higher yield or increase in return on investment. It’s because of the higher rental income that comes with this type of industry. According to research, industrial buildings offer 8% yields – a half higher than residential units.
2. Longer leases
Renters of industrial buildings are also known for renting a space longer than ordinary businesses. Expect stability in income.
3. Job Opportunities
Of course, the rise of factories and other industrial buildings will call for jobs for more Filipinos. Factories are known for having a huge mass of man power in its arsenal. Expect a boom that can be compared to BPOs in this industry.
But not everything is promising when the industrial boom finally takes over the Philippine real estate. First off, industrial buildings are a lot more expensive to invest to than residential or commercial properties. Another factor to consider is the possibility that the properties may become obsolete due to the constant evolution of the industrial industry. Industrial economy is ever changing and if the property or the location won’t be able to keep up with the change then the property will be out of date.
And of course, we shouldn’t count off the agricultural and environmental effects when this sector finally blooms.
However, the rise of industrial buildings is simply one of the few steps that the Philippines needs to take on to if it wants to climb up the ladder in economy. Both the real estate sector and the Filipino people are surely going to be blessed with this growing power’s promise of better opportunities for everyone.
