MRT 4 PROJECT TARGETED FOR COMPLETION IN 2025
The country’s economic managers have approved a new train line that would serve commuters plying Metro Manila and neighboring provinces. The 15.6-kilometre (10 mi) Metro Rail Transit Line 4 (MRT 4) should link the cities of Quezon, Mandaluyong, San Juan, Pasig and the municipalities of Taytay and Cainta in Rizal province. The project is expected to cost around P59.3 billion (USD1.1 billion) and is slated for completion by 2025.
The completion of the MRT-4 project is vital in decongesting Metro Manila and generating business opportunities in other neighboring provinces such as Rizal. In our opinion, developers should start acquiring parcels of land around the proposed train stations given the price appreciation potential of residential projects around these areas. Developers should also consider building office towers that would complement the condominium units to capture the talent pool from the eastern part of Metro Manila. The project should help dictate the strategies of developers with landbank in the area.
GOVERNMENT ISSUES AMENDED REITS RULES, REGULATIONS
The government has issued the new Implementing Rules and Regulations (IRR) of the Real Estate Investment Trust Act (REIT) which is seen to spur growth in the real estate sector. The Finance department said that those with income-generating real estate assets can be considered as REIT companies. Under the new IRR, one of the amended provisions include the reduction of the minimum public ownership to 33%, from the previous requirement of 40%. Several companies have also expressed interest in entering the REIT landscape since its enactment back in 2009.
The government’s issuance of the amended REIT IRR places the Philippines at par with other countries that have well developed real estate markets. The law is now up for full implementation after facing roadblocks due to taxation and public ownership requirements. In our opinion, now is the most propitious time for developers to launch REITs as we have seen a sustained growth in the Philippine property market. This is likely to continue as it is backed by stable macroeconomic fundamentals. Colliers recommends that developers use REIT proceeds to renovate and reposition old assets such as offices, malls and warehouses given the more relaxed restrictions on REITs. Meanwhile, funds raised through REIT can also be used to develop integrated communities in key cities outside of Metro Manila. Overall, the successful implementation of Philippine REITs is likely to draw in greater interest from developers, as well as attract more foreign investments into the country.
DMCI, RLC TEAM UP FOR LAS PIÑAS CONDO
DMCI Homes and Robinsons Land Corp. are entering a joint venture project for a three-tower condominium project in Las Piñas city. The Sonora Garden Residences shall consist of one to three-bedroom units with sizes ranging from 28 to 83.5 sq metres (300 to 900 sq feet). The project is likely to have access to the existing Robinsons Place Las Piñas and should offer several amenities such as a fitness gym, game area, basketball court and a Sky Promenade. Sonora Garden Residences is scheduled for turnover by December 2023.
Colliers sees the growing popularity of joint venture projects among local developers. This is complemented by the launch of mid-income to luxury (PHP3.2 million and above) residential projects. In our opinion, developers should introduce residential projects that are within master-planned communities that integrate the live-work-play lifestyle. Moreover, developers should also consider launching new projects in the fringes of business districts which have a potential for capital appreciation. Colliers has been recording consistent take-up of condominium in cities located south of Metro Manila such as Muntinlupa, Las Piñas and Parañaque. Property firms have been responding to the demand by launching more residential towers, some of which through joint ventures between local developers.