Experts flag depot site's dev't needs

Business World Online by Daphne J. Magturo, 12-02-2014

EVEN with a relatively cheap price tag of just P30,000-40,000 per square meter (/sq.m.), the 30-hectare site which the Pandacan oil depot now occupies will need more than a mere face-lift to turn into a business district, property experts said when asked on the Manila City government's plan for the area.

"[M]uch infrastructure work needs to be done to transform this area. The roads are too narrow and traffic congestion will be an issue," Julius M. Guevara, director of Research and Advisory Services of Colliers International Philippines, said in a text message last Sunday.

David T. Leechiu, country head of Jones Lang Lasalle Leechiu, Inc., said separately that Manila "badly needs" the planned redevelopment because urban decay is already setting in. "The conversion is easy; what is hard is who will build the infrastructure," he said by phone on Sunday.

Infrastructure required includes roads, water treatment, sewage treatment, electricity, parking, and storm drainage facilities, Mr. Leechiu said.

While he described the city government's land valuation of P30,000-40,000/sq.m. as "fair," he noted the area's problem with persistent flooding.

"Pandacan is a central area, with access to Quezon City, Mandaluyong, and San Juan, so a business district may work," Mr. Guevara said.

He noted that Manila, being "one of the densest cities in the metropolis," has a "high labor base" that could be tapped.

"We've had a lot of discussions with major developers, I'm sure they're looking at it already," Jose Carmelo J. Porciuncula, head of Capital Markets and Investments at KMC MAG Group, Inc., said in an interview on Nov. 26.

Mr. Porciuncula also cited the site's attractiveness, noting "limited access to large chunks of land" in Metro Manila. "And of course the more land you have, the more flexibility you have in terms of development," he said.

However, Mr. Leechiu warned that interested developers should conduct "due diligence" on the property and be aware of possible environmental problems.

"That site has been an oil depot for 20-30 years. I'm sure the oil firms took care of the site, but you'll never know; so the developers have to do their checks," Mr. Leechiu said.

On Nov. 27, Manila Vice-Mayor Francisco "Isko Moreno" Domagoso said the City of Manila plans to talk to major developers for conversion of the site into a business hub, particularly Ayala Land,Inc., Megaworld Corp., Robinsons Land, Inc., SM Prime Holdings, Inc., and Federal Land, Inc.

On Nov. 25, the Supreme Court, sitting en banc, voted 10-2 against Manila City Ordinance No. 8187, enacted under former mayor Alfredo S. Lim, saying it was "unconstitutional and invalid with respect to the continuing stay of the Pandacan oil terminals." That 2009 ordinance had repealed a November 2001 precedent, Ordinance No. 8027 enacted during the administration of former mayor Jose L. Atienza, Jr., that reclassified parts of Pandacan and Sta. Ana districts as commercial from industrial on grounds of safety.

On the same day, the high court also ordered Chevron Philippines, Inc; Pilipinas Shell Petroleum Corp.; and Petron Corp. to submit to Manila Regional Trial Court Branch 39 updated comprehensive relocation plans and schedules within 45 days. Relocation, in turn, should be completed not later than six months afterwards.