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In Manila, the crowded Philippine capital of more than 12 million inhabitants, land that was reclaimed from the sea is selling like hot cakes.
Real estate values in the Manila Bay area, home to casinos like City of Dreams Manila and Solaire Resort and Casino, are projected to rise 30 percent to as much as 250,000 pesos ($4,900) a square meter by year-end, according to Colliers International. That would surpass values in the decades-old Ortigas business district as demand for homes, offices and retail spaces surge in the wake of an economic boom in the Southeast Asian nation.
“Prices have quadrupled in the past five years due in part to the convergence of infrastructure,” Paul Vincent Ramirez, director for valuation at Colliers International Philippines, said in an interview. He cited reduced travel time from the Makati business district following the construction of an expressway that passes through the international airport.
As land becomes scarcer and prices surge, developers find it more cost-effective to reclaim land than convert industrial estates for mixed-use development, Ramirez said. Among the five major reclamation developments in the bay area is the 407-hectare New Manila Bay City Pearl project of UAA Kinming Group Development Corp. and its foreign partners. The project will feature a driver-less monorail, an 8,000-seat multipurpose stadium and an 18-hole golf course, according to Colliers.
Another proponent, Manila Goldcoast Development Corp., is embarking on a 24 billion-peso project that will reclaim 148 hectares and develop the land into an entertainment hub that will house the country’s first international cruise ship terminal.
Companies in industries from business process outsourcing to advertising, construction and online shopping are expanding in the Philippines as the economy grows more than 6 percent, among the fastest in the world. Office space vacancies in the Makati and Fort Bonifacio business districts stood at 1 percent to 3 percent, according to Colliers.
While reclaimed land prices in Manila Bay are now as much as 15 times the cost of land reclamation, they’re still 40 percent cheaper than in nearby business districts. Colliers projects properties in Makati and Fort Bonifacio to rise by 20 percent to as much as 600,000 pesos a square meter by the end of the year.