Fueling the fringe
Infrastructure has been a gamechanger, helping spread progress and turning periphery areas into new growth centers
The infrastructure boom under the “Build, Build, Build” (BBB) agenda has unlocked growth for real estate in the fringes even amid the COVID-19 pandemic.
Panelists from the public and private sectors noted this trend during the July 14 livestream event titled, “Fueling the Fringe: Creating New Growth Centers,” the latest edition of Inquirer’s INQclusive webinar series, supported by Ovialand, Sta. Lucia Land Inc. (SLLI) and Ortigas Land.
Speaking at the event were Secretary Mark A. Villar of the Department of Public Works and Highways (DPWH); Richard Raymundo, managing director of Colliers Philippines; and David M. Dela Cruz, executive vice president and chief finance officer of Sta. Lucia Land.
“Infrastructure has been the main gamechanger,” declared Raymundo. “It has democratized prices; decentralized and connected cities; and made possible more inclusive growth with upward expansion. When we get out of the pandemic, there will be a stronger case for fringe locations.”
Fringes are places in the outskirts of central business districts (CBDs) and city centers. These peripheral areas have become more attractive as they most usually offer bigger and less dense spaces, more affordable price points and, due to big-ticket projects in recent years, increasingly accessible addresses.
Dela Cruz picked out a Sta. Lucia Land project in Iloilo to stress the impact of infrastructure on real estate: “An actual case was our project Green Meadows in Iloilo, a 170-ha community whose market price for its residential component increased from P4,000 in 2011 to P7,400 in 2016 and eventually to P11,000 in 2021. Its commercial component increased from P5,700 in 2012 to P30,100 in 2021. [This was] after the construction of one of two major roads right adjacent to the project back in 2013.”
Cases like this further prompted Sta. Lucia Land in June 2019 to seek help from Colliers Philippines in coming up with a hypothetical market value for assets that may be affected by government projects. On March 31, 2021, he said, 90 percent of their landbank would “have direct and indirect strategic exposure” to and benefit from the BBB initiative.
Economic dynamism, inclusive development
Under BBB, the Duterte administration has been building thousands of infrastructure projects, with the goal of ushering in the Golden Age of Infrastructure while more importantly introducing economic dynamism and spreading inclusive development across the country.
“At any one time, we have about 18,000 projects implemented simultaneously… Never in history did the government envision such a massive infrastructure rollout as we are having today,” Villar said. “We’re of the belief that a necessary component to reach the next level of development for the Philippines is really the infrastructure capacity.”
The BBB delivered the recently opened Kalayaan Bridge connecting the cities of Makati, Taguig, Pasig and Mandaluyong. Soon to open is the Estrella-Pantaleon Bridge which links Makati and Mandaluyong.
Raymundo also lauded the LRT extending to Rizal, and the connector between North Luzon Expressway (NLEx) and South Luzon Expressway (SLEx) that may benefit fringes in the provinces of Bulacan and Pampanga. The Luzon Spine Expressway Network will also cut travel between Bicol and Ilocos Regions to just 9 hours from the current 18 hours.
“You can really see we’ve put a lot of resources to bring development to other areas. It’s not just Luzon,” said Villar. BBB also includes the Bacolod Economic Highway, Iloilo-Antique Connector Road, Davao Bypass Road, Davao-Samal Bridge and the Panguil Bay Bridge connecting Misamis Occidental and Lanao del Norte, among many other projects.
DPWH “created a very substantial pipeline” that will be “more than enough even for the next and next administration,” Villar added.
This improved interconnectivity will raise fringe addresses, said Raymundo, adding that “it is possible to live a little bit further from where you work and have a very good quality of life.”
This early, the new links have translated to returns for Sta. Lucia. “[S]o far we’ve built a lot of projects … and now we’re seeing the benefits of interconnectivity because prices just keep on going up in areas outside the CBDs,” Dela Cruz said.
Referring to Alabang, Rockwell, Fort Bonifacio and other areas once considered fringes but now holding their own as economic hubs, Raymundo said: “Whatever is considered fringe right now, give it five to 10 years, when it all matures… that will be the new growth center.”
“We are amid a great and exciting time in our country,” said Dela Cruz. “As a developer and as homeowners, I think this golden age of infrastructure … is really a gamechanger for us… The fringes will now expand the radius of cities and provinces.”
You can watch the replay of this webinar via Inquirer Property’s Facebook page (Facebook.com/INQ.Property)