The Gem of Davao Region’s Real Estate Industry
When it comes to real estate investments, nothing beats the viability of Metro Manila. As the seat of economic power of the country, the metro attracts the eye of the investors. However, with the thinning supply of land especially in central business districts, developers are starting to see the gem of other economic centers in the country. Take for instance the Davao Region, Mindanao’s heart of progress and growth.
If the latest economic figures are anything to go by, it can be inferred that the region is definitely showing positive signals of growth. Figures from the government revealed that in 2015, the Davao Region registered a 7.9 percent gross regional domestic product, higher than the national average of 5.9 percent. This strong expansion came from the booming business process outsourcing (BPO) sector as well as the government’s push to better the public infrastructure.
The region’s growth was also underpinned by the large private investment in the services sector, as well as in areas of manufacturing and real estate.
Additionally, indicators are showing that growth in the region is nowhere close to stopping just yet. Its labor force has been growing 1.5 percent every year, as 19,900 college graduates achieve their diplomas annually. The region’s transport infrastructure is also seen to catalyze economic gains as arterial roads are constantly renovated and improved to connect to major inter-provincial routes.
According to Damosa Land Inc., a homegrown real estate company in Davao, property development is one of the most prioritized investment areas in the region, with demand coming from the socialized to high-end markets. An example is the increasing demand for business parks and industrial estates.
Real Estate Goliaths
Over the past years, big names have already ventured into the region, capitalizing on its good economic prospects. Perhaps, one of the highlights in the 2000s was the entry of SM Prime Holdings in the region. The group established the Php1.5 billion SM City Davao. In 2011, it unveiled a larger Php2.3 billion retail mall, the SM Lanang Premier.
The likes of Ayala Land also entered the region’s commercial real estate scene with the Php3.9 billion Abreeza Mall. Just recently, it has unveiled its Php20 billion investment together with the Alcantara Group to develop a 25-hectare seaside estate project called Azuela Cove in Lanang, Davao City.
A report from Inquirer.net noted that a high-end residential development by Ayala Land Premier, a healthcare facility, an event tent, and a retail center will comprise the first phase of this seaside development
Meanwhile, Megaworld has also made its footprint in the region with the Php15 billion Davao Park District. Thailand’s Dusit Thani hotel chain also took a slice of what the region has to offer with the opening of the Php2 billion serviced-apartment project with Torre Lorenzo.
Other players including DMCI Homes, Vista Land, Filinvest Land, Robinsons Land have also set up their major housing projects in the region.
Some other known players in other parts of the country are set to foray into the region, including Cebu City’s own Cebu Landmasters Inc. The group announced that it will be ground breaking a vertical neighborhood in Davao City this year.
Also, local real estate players have also started to keep up with the giants. Damosa, for instance, has pioneered Damosa Fairlanes and Damosa Seawind, both of which have continued to sell well. The group is ramping up the construction of the other phases of the two developments.
Sta. Lucia Land, who has been operating in Davao City since 1997, is continuing to see the value of investing in the region. It currently has 18 projects in the city spanning across over 700 hectares, according to Inquirer.net.
These developers are attracted towards the region’s large supply of land. The Davao City alone has a total land area of 244,000 hectares, making it the largest city in the world. The whole region spans over 2.03 million hectares.
What the future holds for Davao
Last year, Brittany Corp.’s account manager Din Buenviaje told SunStar Davao that region’s primary city will see its real estate industry continue its upward trend in the next six years.
The real estate executive said the Davao market is still in the mid-scale area as spending remains conservative. However, there is already a burgeoning competition between developers, which is seen to intensify in the coming years.
Some of the latest trends seen in the real estate space of the region are mixed-use developments, apparent in projects such as the Abreeza Comples, Azuela Cove, and Davao Park District.
Developers are also trying to pay tribute to green urbanism. Some of the notable projects exemplifying this trend are Vista Land’s Camella Northpoint, Damosa Land’s Seawind, and DATEM’s Urban Hive Palms. Flexible workplace solutions are also gaining traction in the office sector, with Regus spearheading the roll out of such spaces.
Indeed, the Davao Region is becoming a force to be reckoned with and it will surely reap benefits from the boom in the country's overall economy. According to Lamudi Real Estate Market Report 2017, last year was particularly strong for the Philippine economy, hitting a growth of 6.8 percent due to strong private consumption, increasing government spending, and the growing BPO industry.
With the upbeat business climate in Davao, the region will see the uptrend in its real estate industry linger in the next years.