Approved building permits fall 8.5% in July

Approved building permits declined 8.5% year on year in July as residential construction projects slumped, the Philippine Statistics Authority (PSA) reported.

Preliminary data showed building projects covered by the permits numbered 15, 395 in July from 16,821 a year earlier.

This was a turnaround from the 12.3% growth in July 2024 and the revised 14.9% expansion in June.

For that month, constructions projects covered 3.47 million square meters (sq.m) of floor area, slipping 2.1% year on year from 3.54 million sq.m.

These building projects that received approval were valued at P44.54 billion, 7.5% lower than a year earlier when it reached P48.16 billion.

Permits for residential projects, which accounted for 66% of the total, declined 8.5% to 10,157 in July.

These projects were valued at P19.77 billion, against the P19.74 billion a year earlier.

Single homes made up 79.1% of the residential category with approved permits declining 10.9% to 8,034.

Applications for apartment buildings rose by 2.5% to 1,957 while applications for duplex or quadruplex homes contracted by 3.1% at 155.

On the other hand, nonresidential projects tallied 3,205 approvals in July, decreasing 8.8% from a year earlier.

Nonresidential permits were valued at P19.84 billion, down 16.6% from P23.78 billion a year earlier.

Approved commercial construction permits numbered 2,150, down 11.3%.

Permits for additions — construction that increases the height or area of an existing building — dropped 16% to 429 in July, while alteration and repair permits totaled 1,133, down 15%.

Industrial permits rose 27.4% to 302, while institutional projects fell 12.1% to 582 approvals.

Agricultural projects totaled 89 approvals, down 19.1%, while other nonresidential works reached 82 building permit approvals, down 2.4%.

Calabarzon (Cavite, Laguna, Batangas, Rizal, and Quezon) had the most approved construction projects for that month accounting for 21.8% of the total with 3,350 permits.

This was followed by Central Luzon (17.5% share with 2,697 permits), and Central Visayas (7.9% share with 1,210 permits).

By value, Calabarzon cornered P8.96 billion worth of construction projects, followed by the National Capital Region (P7.82 billion), and Central Luzon (P6.61 billion).

The PSA said construction statistics are compiled from the copies of original application forms of approved building permits as well as from demolition and fencing permits collected monthly by the agency’s field personnel from the offices of local building officials nationwide.

Source: Business World

Developers urged to grow industrial segment to attract foreign expansion

Property developers must consider expanding their presence in the industrial segment to attract foreign companies diversifying their supply chains, property consultancy Colliers Philippines said.

In its first half Metro Manila Industrial Report, Colliers said China and Taiwan companies that have shown interest in expanding here.

“The Philippines needs an efficient supply chain system to capture investments amid Trump’s new tariff impositions,” Colliers said.

“This is also crucial in future-proofing the industrial sector, enabling the Philippines to attract foreign direct investment amid challenges posed by elevated tariffs.”

US President Donald J. Trump in July imposed a 19% tariff on exports from the Philippines, Cambodia, Malaysia, Thailand and Indonesia.

According to Colliers, property firms must consider developing industrial parks and facilities to cater to more locators. It also cited opportunities to expand in Central Luzon, which hosts high-value manufacturers in industries like pharmaceuticals, fiber cement products, tire, and semiconductor segments. 

In Central Luzon, Colliers projects 900 hectares of new industrial space to be delivered between 2025 through 2028.

“The development of new industrial parks and facilities in central and southern Luzon should provide potential locators with more options and opportunities to haggle for more attractive land leasehold and warehouse lease rates,” Colliers said.

For the second half of the year, semiconductors, consumer goods, cosmetics, and automotive firms are expected to drive demand in the industrial segment.

“Industrial space absorption should partly be supported by Chinese and Taiwanese firms expanding in the Philippines. Colliers sees the Philippines likely benefiting from the China+1 strategy,” according to the report.

The China+1 strategy refers to China-based companies diversifying their production operations to add more sites.

Colliers also cited the potential of ‘sunrise industries’ such as electric vehicles (EVs), as it expects more interest from EV firms looking for an industrial base in the region.

“Over the near to medium term, the Philippine government should entice other thriving sectors such as pharmaceutical firms and encourage them to manufacture in the Philippines,” it said.

Source: Business World

Green is good: Why more developers eye green certifications for buildings

Philippine property developers are increasingly seeking green certifications for office buildings not only because of government energy mandates but also rising demand from multinational companies.

It’s no longer uncommon to find developers touting the sustainable features of their new office buildings, which have received certifications like Leadership in Energy and Environmental Design (LEED), Building for Ecologically Responsive Design Excellence (BERDE), Excellence in Design for Greater Efficiencies (EDGE) and WELL Building Standard.

To get a green building certification, a project must meet certain environmental and sustainability standards. These usually ensure that a building meets high standards of energy efficiency, resource conservation, air quality, among others.

“We see the increase (in green certifications) because of the mandates by the government, such as the Department of Energy, to comply with the laws to Republic Act No. 11285 or known as the Energy Efficiency and Conservation Act,” Jess Niño H. De Villa, Head of Engineering, Energy and Environment of Knight Frank said.

The law requires Philippine businesses to monitor energy consumption, which is the top contributor to net-zero emissions.

“Certification helps ensure compliance with these requirements, avoiding potential fines or legal issues, making it a top reason for properties to adopt green certifications in the Philippines,” Mr. De Villa said.

Green certifications can make a big difference in attracting potential tenants.

“A green-certified building can be more attractive to potential tenants who prioritize environmental responsibility. Green certification can set a building apart, making it a preferred choice for tenants and investors who value sustainability,” he added.

As of now, 31.2% of the 8.5 million square meters (sq.m.) of existing office supply within Metro Manila have varying levels of LEED certifications, Mr. De Villa said.

He noted the NEO Property Management’s real estate portfolio in the Philippines was the first in the world to secure the International Finance Corp.’s (IFC) EDGE Zero Carbon certification. NEO’s entire portfolio is powered by Cleanergy, which delivers 100% renewable energy.

While the cost of securing green certifications can be costly, it can still be worth it for developers.

“In general, (the cost of the) certification is still quite low in terms of the savings that you can be able to gain and for the revenue,” Mr. De Villa said.

STRONG DEMAND

Demand for green certified buildings in the Philippines is also driven by multinational companies.

“It’s largely because of the Western companies and Western tenants moving to the country, requiring their buildings to be LEED certified. Their head offices in, let’s say, London and the US, have certain requirements for the office space that they need to occupy here,” Leechiu Director of Research Roy Amado L. Golez, Jr. said.

Mr. Golez said most of the newer buildings are compliant with green building standards, mainly because they don’t want to lose out on the tenants whose parent companies are based or headquartered in Western countries.

“It has become a must-have. If you don’t have it, your market might be smaller,” Mr. Golez said.

CBRE Philippines Country Head Jie C. Espinosa said global companies make green building standards a “first hurdle” when choosing office spaces.

“There are certain cases, that these occupiers consciously negotiate provisions in their contract, that down the road developers need to be proactive in providing sustainable features into their buildings,” Mr. Espinosa said.

Green leases, rental agreements where tenants and landlords set sustainability-related targets, benefit both parties by raising the value of the property and creating incentives for tenants.

Mr. De Villa said domestic companies also see green-certified office buildings as an ideal location for their operations, as they also seek to comply with evolving environmental standards.

He also noted that tenants that want to integrate sustainability in their operations are willing to pay premium rates to secure office spaces in buildings with green certifications.

ADOPTION HIGH IN METRO MANILA

Central business districts in Metro Manila have seen significant gains in green building adoption in recent years, CBRE Philippines Director of Advisory and Transactions Services Garri Amiel P. Guarnes said.

Based on CBRE data, the office segment in Fort Bonifacio has seen its green building adoption rate jump to 73% in 2024 from 63% in 2022.

For Alabang, the green building adoption rate inched up to 67% this year from 49% two years ago.

The green building adoption rate in Ortigas rose to 66% in 2024 from 42% in 2022, while in Quezon City, it went up to 45% in 2024 from 42% in 2022.

However, green building adoption in provincial locations is lower than in Metro Manila, Mr. Guarnes said.

“This was due to developers being more focused towards third-party outsourcers but moving forward, these companies or the clients they serve would implement their sustainability targets,” he said.

In Davao, 24% of the office stock is green certified, followed by Cebu with 23%, Iloilo with 16% and Pampanga with 8%.

However, Cebu is leading in terms of the rate of increase in adoption, Mr. Guarnes said.

In Cebu, 44% of the recent completions between 2020 and 2024 have green certifications, while 16% are still under application.

FIVE-STAR BERDE

For Aboitiz InfraCapital, Inc., its 800-hectare LIMA Estate in Lipa-Malvar, Batangas, is one of the strongest examples of a green-certified property.

“It’s been recognized as a five-star BERDE, which means it is implementing sustainable practices that are aligned with the global standards,” Aboitiz InfraCapital, Inc. Economic Estates Vice-President for Inventory Generation Group Jolan P. Formalejo said.

BERDE is a local green building system rating that was developed by the Philippine Green Building Council.

Mr. Formalejo said the developments inside the estate, such as the Outlets at Lipa and the LIMA Tower 1 were five-star BERDE certified in 2022.

LIMA Tower 1 holds a BERDE certification for environmental sustainability, and has pre-certification from the WELL Building Standard, which assesses features promoting health and well-being.

“Hopefully, once we start to operate LIMA Tower 1, all the tenants will appreciate the operational savings that they can achieve,” Mr. Formalejo said.

He said the Smart Water Network, wherein its water facilities turn into interconnected and intelligent systems, operated by LIMA Water Corp., resulted in 30% savings in operations and uptime of 99.3%. It is also less than 5% in terms of wastage of non-renewable water.

“Soon we will be developing our Tower 2. We’ll also gear up for these certifications,” he said, adding that The West Cebu Estate and Mactan Economic Zone 2 Estate are aiming for five stars this year.

Mr. Formalejo noted these green certifications make the locators feel secure knowing their business operates inside a sustainable development along with the assurance that all these facilities and systems are future proof.

Source: Business World