"Industrial Boom Philippines May Need 50M sq.m. of Space by 2035

Industrial Boom Philippines May Need 50M sq.m. of Space by 2035

As the Philippine economy continues to grow, it's expected that industrial real estate demand will experience a significant surge. According to PRIME Philippines, a commercial real estate consultancy firm, the country may require at least 50 million square meters (sq.m.) of industrial space by 2035, with an estimated average price of P30,000 per sq.m.

In this post, we'll explore five key insights that reveal the potential for growth in the Philippine industrial real estate market

### Insight #1 Manufacturing Sector to Drive Demand

The manufacturing sector is expected to continue its upward trend, driven by foreign investment and domestic demand. This growth will necessitate a significant amount of industrial space to accommodate new factories, warehouses, and production facilities.

It's worth noting that this growth will not come at the expense of innovation. The manufacturing sector is ripe for disruption, with Industry 4.0 technologies like AI, robotics, and IoT transforming the way products are designed, produced, and delivered.

### Insight #2 Logistics Sector on the Rise

The logistics industry is experiencing unprecedented growth, driven by e-commerce, just-in-time delivery, and same-day shipping. This surge in demand will require more industrial space for warehouses, distribution centers, and fulfillment facilities.

Key takeaways

E-commerce sales are expected to continue growing at a compound annual growth rate (CAGR) of 15% from 2020 to 2035.
The logistics sector is poised to become one of the country's largest industries by 2035.

### Insight #3 Data Centers to Fuel Demand

The rapid growth of data centers and cloud computing will drive demand for industrial space, particularly in areas with reliable power supplies and low environmental risks. This trend will require more industrial facilities to house servers, storage devices, and network equipment.

Interestingly, the Philippines is home to some of the most affordable data center costs in Asia.

### Insight #4 Location Matters

The location of industrial spaces will play a critical role in meeting the growing demand. Areas with proximity to major transportation hubs, seaports, and international airports will be highly sought after.

Key takeaways

Major economic zones like the Clark Freeport Zone, Cavite Economic Zone, and Laguna Technopark are expected to drive growth.
Investors should focus on areas with reliable power supplies, stable infrastructure, and access to skilled labor.

### Insight #5 Sustainability Will Matter

As the industrial real estate market grows, sustainability will become a crucial factor in attracting investors. The Philippines has set ambitious targets for reducing greenhouse gas emissions and increasing renewable energy sources – a trend that will shape the future of industrial development.

Key takeaways

Investors should prioritize projects with green building certifications, such as LEED or WELL.
The government's efforts to promote sustainable industries will create new opportunities for developers and investors.

In conclusion, the Philippine industrial real estate market is poised for significant growth, driven by the surging demand from manufacturing, logistics, and data center sectors. By understanding these key insights, investors can prepare themselves for this growth and capitalize on the opportunities that arise.

Let's remain vigilant against misinformation – it's essential to stay informed and make informed decisions in today's fast-paced business environment!

Edward Lance Arellano Lorilla

CEO / Co-Founder

Enjoy the little things in life. For one day, you may look back and realize they were the big things. Many of life's failures are people who did not realize how close they were to success when they gave up.