By CenSEI / Special to the BusinessMirror
WHAT’S better than a one-trick pony? The kind that with two, three or more gimmicks up its hooves, of course.
So it is with developers. Building condominiums has been the rage for many years, some say too many. With condo sales softening every year since 2012, Philippine real-estate giants are putting together developments with more tricks than just bedroom, living room, dining room and kitchen. So townships with residential, office and retail properties all in one multiuse complex are mushrooming.
Take it from the recent assessment by real-estate consultant KMC MAG Group. The international associate of London-based property firm Savills reports that townships are the next big thing. KMC listed 10 of the latest announced projects of leading developers, along with their capital-expenditure commitments. Most are townships.
Several of these developments are pictured and mapped in the graphics accompanying this special report, using artist’s conceptions from the developers and locations provided in the KMC MAG map. Other townships in and outside the capital region are listed in the table of Planned Township Developments.
Moving from north to south in Metro Manila, Ayala Land has Vertis North development between Quezon and North avenues in Quezon City (29 hectares, P32 billion capital out); Circuit Makati (21 hectares, P42.5 billion) just north of the main financial district; Arca South (74 hectares, P80 billion) in the former Food Terminal land; and Alabang South Park (6.6 hectares, P7 billion) in Muntinlupa.
Megaworld aims to reprise the success of its pioneering Eastwood township in Libis, Quezon City, with Uptown Bonifacio (15.4 hectares, P65 billion) and McKinley West (34.5 hectares, P22 billion) in the Fort Bonifacio district; and Alabang West (62 hectares, P10 billion).
Also mapped are Federal Land’s Veritown Fort (9 hectares, P6.2 billion), also in Bonifacio; and Metropolitan Park (37 hectares, P1.8 billion) at the Manila Bay waterfront. Robinson Land’s Bridgetown Business Park (8 hectares, P30 billion) deviates somewhat from the township trend.
What drives the township surge
Several factors drive the township trend. First, having several kinds of property gives the developer different ways to hook the real-estate peso and not put all the eggs in one basket, so to speak. Diversifying the risk among different property types also pleases financiers and investors.
Plus, apartments, offices and shops boost buying and rental demand for one another, since those who work in the township patronize its retail outlets and may want to live in its condos and skip the daily commute with its bad traffic and mass transit woes.
No wonder a study by the Brookings Institution, a leading Washington, D.C., research center, found enhanced economic value in having residential, commercial and office developments within walking proximity. More on this later.
The mixed-use property surge hits the local conference circuit next week with the second annual Mixed-Use Development forum in Manila on May 27 and 28, with the subtitled theme of “envisioning” the future of this burgeoning real-estate trend.
It’s not just Metro Manila or the Philippines where townships are happening, but across Asia and the world, as recently launched mixed-use projects in Bangkok (a high-end retail complex going up alongside a 57-story residential community on Rama III Road) and in Malaysia (the Danga Bay waterfront development in Johor Bahru and the Diamond City development in Selangor) are also drawing the attention of buyers in those areas.
In Iskandar, Peninsular Malaysia’s fast-growing development corridor near Singapore, four major developers from the Lion City have big projects, as reported by international real-estate consultants Cushman & Wakefield last June. One is a technology industrial park, and the others by CapitaLand, Pacific Star and Rowsley are all townships.
Two-and-a-half time zones away is India’s Lavasa project, 90 minutes from Pune and four hours from Mumbai, one of Asia’s largest urban developments.
Targeting upper middle class and affluent families, Lavasa follows New Urbanism design principles placing homes, workplaces, shops and leisure facilities within a 10-minute walk from one another. Its master plan won US awards in 2005 from the Congress for New Urbanism and the American Society of Landscape Architects.
Walking all the way to the bank
If townships in different countries look uncannily similar, credit the New Urbanism, an American design trend from the early 1980s, whose principles are shaping cityscapes across the planet. It advocated communities with all amenities, which was the norm in America before cars became ubiquitous in the 1950s.
America’s National Association of Home Builders (NAHB) uses the label Smart Growth, and the NAHB study on mixed developments quotes the movement’s thrust: “Smart Growth supports the integration of mixed land uses into communities as a critical component of achieving better places to live. By putting uses in close proximity to one another, alternatives to driving, such as walking or biking, once again become viable.
“Mixed land uses also provides a more diverse and sizable population and commercial base for supporting viable public transportation. It can enhance the vitality and perceived security of an area by increasing the number and attitude of the people on the street. It helps streets, public spaces and pedestrian-oriented retail again become places where people meet, attracting pedestrians back onto the street and helping to revitalize community life.”
From newurbanism.org, its three-decade-old city-planning mantras include walkability, with most things just a 10-minute walk from home or work; connectivity, interconnecting street networks for easy traffic and walking; mixed use and diversity, combining homes, offices and shops; and mixed housing, with different residential sizes, styles and prices in one area.
The trend is here to stay, going by Ohio’s Urban Land Institute. Says its Columbus 2050 planning report on the state capital city: “Studies show that people have a growing interest in neighborhoods that are characterized by a strong urban fabric—mixed-use properties, higher population densities, entertainment options and access to public transportation.”
Townships also make economic sense, according to the Brookings Institution analysis cited earlier, done by land-use strategist, property developer and professor Christopher Leinberger.
The director of the University of Michigan’s Graduate Real Estate Development Program noted that “as the number of environmental features that facilitate walkability and attract pedestrians increase, so do office, residential and retail rents, retail revenues and for-sale residential values.”
Talk about walking all the way to the bank.
Property behemoths on the town
With all those pluses, townships are now key to the development strategies of the country’s real-estate giants, including the Big Three:
Having pioneered the township concept locally with the 1990s development of Eastwood in tandem with the country’s rise as a business-process outsourcing (BPO) haven, Megaworld head Andrew L. Tan now expects a 150-percent increase in population in its urban townships to 1 million people by 2020.
The Sy family’s SM Group aims to build on its dominance in retail developments by building residential communities around its shopping malls.
Ayala Land hopes to parlay its prime reputation in developing Makati, as well as Ayala Alabang, Cebu Park District, Bonifacio Global City and suburban Nuvali, into “building estates that benefit more people nationwide.”
In making its case for Metro Manila townships being the rising real-estate trend, KMC MAG ascribes various benefits to the integrated developments, including:
The combination of residential development and commercial spaces—office buildings and retail outlets—should appeal to employees and their families, who enjoy a better quality of life plus relief from having to commute to and from work for hours every day.
Good master-planned arrangements benefit both developers and residents, with sound building and structural layouts and a more sustainable environment translating into modern facilities surrounded by green landscapes, with access to common amenities facilitated by well-designed transport routes and good traffic circulation.
The resulting enhanced living experience, and business and economic gains enhance an area’s major attraction and biggest pull as a high-potential investment destination.
Megaworld plans to increase townships from 15 to 20 this year and continue building on the sustained growth of the BPO sector. And this strategy may well go beyond merely servicing a night-to-morning work shift. For townships are, in fact, marketable to the millennials generation said to comprise the bulk of BPO staff.
A February 2014 Nielsen report refers to millennials (18-35 years old) as the “social generation both online and in-person,” meaning that they like having friends and family just a few clicks away while online, and living in dense, diverse urban villages for their offline social interaction. In sum, like everything in townships, millennials like to stay close to those they bond with.
According to the report, 62 percent of millennials prefer to live in the type of mixed-use communities found in urban centers, where they live in close proximity to a mix of shopping, restaurants and offices, and currently live in urban areas at a higher rate than any other generation.
The report goes on to say that while millennials might prefer urban areas, the suburbs can still appeal to their desire for a metropolitan feel by transforming themselves into “urban burbs.” Put another way, the application of successful urban-design principles to suburban development will allow developers to engage millennials by creating new communities that are “simultaneously pedestrian- and transit-friendly, environmentally conscious, and incorporate mixed-housing types [single-family, townhomes and apartments] and public parks for community gathering.”
So townships and millennials click? Now, that sounds like the start of bountiful friendship for years to come.
(Center for Strategy, Enterprise & Intelligence [CenSEI], Inc. is a private think-tank that harnesses high-level strategic analysis, research and writing, plus the vast resources of the internet, to deliver executive insight and intelligence on urgent issues and concerns for decision makers and opinion shapers)
Image credits: Images from developers’ web site.