Philippine Real Estate News – February 29, 2016

real estate market news 46 pr

hello everyone,

here’s some select articles about Philippine Real Estate and our economy from various newspaper correspondents that matters for your reference.

from Philippine Daily Inquirer’s correspondent, Doris Dumlao-Abadilla :

AYALA tutuban r

Ayala Land acquires 51% of Tutuban Center owner

PROPERTY giant Ayala Land Inc. has sealed a deal to acquire majority interest in Prime Orion Philippines Inc. (Popi), owner and developer of the popular bazaar hub in Divisoria, Tutuban Center.A deed of subscription had been executed whereby ALI subscribed to 2.5 billion common shares or 51.06 percent of Popi for P2.25 a share or a total block price of P5.62 billion, both companies disclosed to the Philippine Stock Exchange Friday.ALI paid for the initial 25 percent of the block or P1.4 billion while the rest will be settled upon fulfillment of certain terms and conditions.

ALI’s entry in Popi is seen to provide the financial muscle to redevelop Tutuban Center and double its retail space to ride on robust consumer spending in the country.

Based on last year’s estimates, Popi earns about P400 million annually in rental income from Tutuban Center, which has about 60,000 square meters in gross leasable area, offering various concepts from wholesale and bargain stalls to regular retail and food outlets.

Popi expects to unlock more recurring earnings from the doubling of the retail space in the shopping complex. At the same time, it sees room to grow Tutuban Center given that it has so far built only on an eight-hectare portion of the 20-hectare property.

In March last year, the Philippine National Railways (PNR) turned over to Popi’s indirect subsidiary Tutuban Properties Inc. (TPI) about three hectares of leased property along Tayuman St. in June last year, PNR also turned over 5.8 hectares along Dagupan St. The project is expected to be integrated with the North-South railway project of the Department of Transportation and Communications (DOTC) and PNR.

Aside from the Divisoria property, Popi has a beachfront in San Vicente, Palawan. Popi likewise has a 10-percent stake in Cyber Bay Corp., claimant to reimbursement expenses from the government in relation to the aborted 750-hectare development project along Manila Bay.

Formerly known as Guoco Holdings (Philippines) Inc., Popi has interests in real estate and property development, nonlife insurance and other allied services. The company has a market capitalization of about P5.2 billion, less than what ALI has agreed to pay for a 51-percent stake in the company.

from Business World online correspondent,  Melissa Luz T. Lopez : 

PHL economy still in ‘good shape’

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THE PHILIPPINES remains in an economic “upswing” that can spur further growth on the back of sustained investor confidence, with room to push locally driven expansion still seen, a recent report by the Asianomics Group Ltd. said

In a Feb. 15 report titled “Philippines: Cruise Control,” the Hong Kong-based research company said the country continues to have a strong growth momentum, with expansion seen to pick up pace further in 2016.

“Our Austrian stress analysis suggests that the Philippines is in relatively good shape and still in the upswing phase of the business cycle. This would support general expectations that economic growth will accelerate in 2016 from the 2015 level of 5.8% in real terms,” the group said, referring to a tenet under the Austrian economic school of thought, which focuses on credit cycles, profit cycles and cash flows.

The Philippines bagged a +3 total score from the research unit’s stress test scorecard among emerging and developed economies, the second highest after Taiwan. The rating is a point higher than the +2 bagged by the country in December after taking into account the faster-than-expected 6.3% growth seen in the fourth quarter of 2015 and improved real lending rates.

“The Philippines is still in an economic upswing with plenty of scope for acceleration,” the report said.

Asianomics chief economist Jim Walker said in an earlier interview that the Philippines can grow by as much as 6.5-7% in 2016, picking up from last year’s performance buoyed by sustained consumer demand and more investments for infrastructure.

“There are other signs of domestic economic health: internal tourism flows, low commercial property vacancy rates, consistently low consumer price inflation, fiscal deficit undershoots on the back of healthy tax receipts and strengthening investment spending,” the report read. These drivers are seen to make up for a slump in global commodity demand.

It also cited “success stories” from the business process outsourcing (BPO) sector and remittances from overseas Filipino workers (OFWs). This year, the group expects the BPO sector receipts to be at the same level with remittances at 17% of the gross domestic product (GDP), or bringing in $25 billion each in flows.

Money sent home by OFWs reached a record-high $25.767 billion in 2015, up by 4.6% from the adjusted $24.628 billion tally in 2014, according to central bank data.

The country’s external payments position is likewise in good shape, Asianomics added, given the country’s ample level of international reserves.

The group also described the quality of the expansion as “encouraging.”

“Suffice to say here that growth driven by investment is suggestive of an economy confident in its ability to expand business and make money. That is what leads to self-sustaining growth in any country,” the report read. “The Philippines is looking good in this respect and it is further manifested in the growing share of services in GDP.”

The economy “should easily manage” to expand by 6-6.5% this year, Asianomics added, if remittances are not heavily affected by record-low world oil prices and should the award and completion of projects under the public-private partnership scheme accelerate further. A supportive political environment beyond the Aquino administration will also help spur growth, it said.

“The big apprehension, however, is whether any of the candidates would continue or improve on the Aquino reforms or whether the Philippines will slip back into the kleptocracy-mode led by the two presidents immediately previous to Aquino — Joseph Estrada and Gloria Macapagal-Arroyo,” the report read.

Analysts and international debt watchers have flagged reform continuity as the main concern ahead of the upcoming change in leadership, but the country’s economic managers have said that gains made under Pres. Benigno S.C. Aquino III’s term have already been institutionalized and hence, irreversible.

While weighing in on the profiles of four frontrunners for the May 9 presidential polls, Asianomics described the political landscape as still “volatile,” given fluctuating survey preference results and months ahead of the elections. “Continuation of Aquino’s reforms remains up in the air.”

from Philstar’s corrrespondent, Richmond Mercurio :

One expands, the other exits: SM, ALI take opposite routes on China ventures

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The SM Group ventured into the China market in 2007 and now has shopping centers in cities like Xiamen, Jinjiang, Chengdu, Suzhou (pictured), Chongqing and Zibo. File photo
MANILA, Philippines – Two of the country’s largest property developers are taking different directions with respect to investing in China, with one heading for the exit and the other staying put, as growth in the world’s second largest economy continues to slow down.

SM Prime Holdings Inc., owned by Filipino-Chinese shopping mall tycoon Henry Sy Sr., remains bullish on China while Ayala Land Inc. (ALI) of the Ayala clan has chosen to call it quits – for now.

SM Investments Corp. senior vice president for investor relations Cora Guidote told The STAR the SM Group’s business is “still growing” in China despite problems besetting the country.

Guidote said SM does not intend to exit China any time soon.

“We will pursue moderate expansion of one mall per year in second and third tier cities,” Guidote said.

The SM Group ventured into the China market in 2007 and now has shopping centers in cities like Xiamen, Jinjiang, Chengdu, Suzhou, Chongqing and Zibo.

ALI, on the other hand, seems to have given up on China.

“We’re exiting China as you know. We are just trying to sell the remaining residential units in Tianjin,” ALI chief financial officer Jaime Ysmael said in a press briefing last Friday.

ALI made its entry into China’s property market in 2010 through a joint venture with the Sino-Singapore Tianjin Eco-City Investment and Development Co. Ltd.

The joint venture project involves the development of a $220 million residential complex in a 9.78-hectare property in Tianjin Eco-City.

ALI was contracted to develop more than 1,100 units within a 19-tower residential complex.

Ysmael said it is still not clear as to how ALI would make its exit but it might likely liquidate the company and “distribute whatever remains as capital.”

“We already gave up on other sites that were allocated for us. It is very difficult in the current market. Obviously, it (ALI’s decision to exit) was triggered by what happened in China. We felt it would be very difficult to continue,” he said.

When asked if ALI is still exploring opportunities in other areas in China, Ysmael said “not right now.”

Instead, the local property giant wants to focus its attention on other countries within the Association of South East Asian Nations such as Indonesia and Thailand.

“We have not done anything yet other than prospecting. Asean is what we’re really looking at but again it depends on the opportunity that comes. We really have to be careful in terms of evaluating the right project. We’re very particular about the partners,” Ysmael said.

Ysmael, however, said ALI has no regrets in entering China’s property market as it served as a learning ground for the company when it came to international ventures.

“We learned a lot. It opened our eyes on how they actually operate. They are really into scale, very massive projects. They want things done right away. We’re able to gain access to some of their supply chain and on the way they construct as well,” he said.

ALI, however, is not alone in its decision to get out of China as a pack of investors are leaving the world’s second largest economy due to rising costs, increased regulation, and an economic slowdown.

from PhilStar’s correspondent, Richmond Mercurio :
bcda 2p

Supreme Court rules with finality BCDA takes possession of NOVAI property

BCDA president and CEO Arnel Paciano Casanova lauded the SC for the favorable ruling which he said would benefit the Armed Forces of the Philippines (AFP) and the national government.

MANILA, Philippines – The Bases Conversion Development Authority (BCDA) said the Supreme Court has denied with finality a motion for reconsideration filed by the Navy Officers’ Village Association Inc. (NOVAI) for the ownership of a 47-hectare property in Fort Bonifacio.

BCDA president and CEO Arnel Paciano Casanova lauded the SC for the favorable ruling which he said would benefit the Armed Forces of the Philippines (AFP) and the national government.

In a two-page notice, BCDA said the SC Second Division denied a motion for reconsideration by NOVAI of an earlier ruling decision allowing BCDA to take possession of the property.

“With the Supreme Court ruling, the BCDA can now proceed with the disposal of the 47-hectare property and generate billions of pesos to fund the AFP modernization program and bankroll government programs and projects,” Casanova said.

According to Casanova, the 475,009 square-meter NOVAI property is now estimated to be worth more than P47 billion based on the current selling price of approximately P100,000 per square-meter.

The NOVAI is a group of retired military officers which claimed ownership of the disputed property located inside the former Fort Andres Bonifacio Military Reservation.

“Rampant land grabbing where officers are involved affects the morale of our soldiers, and eventually weakens our Armed Forces,” Casanova said.

“As early as 2004 and as general counsel then, I made a commitment to the Feliciano Commission that I will do my best to pursue the cases against Southside Homeowners Association (SHAI) and NOVAI in spite of some generals who kept on dissuading us from doing so,” Casanova added, referring to the commission’s report that recommended legal action for the recovery of the JUSMAG and NOVAI properties.

The Feliciano Commission was a fact-finding commission created to address the concerns of soldiers involved in the July 2003 Oakwood mutiny.

The BCDA eventually won in September 2006 in its petition-in-intervention with the SC over a case against military officers occupying quarters at the SHAI area inside JUSMAG in Fort Bonifacio.

The former JUSMAG area has since been developed and is now known as McKinley West.

Casanova said winning both the NOVAI and SHAI cases put closure to more than a decade of legal battles to protect the rights and interest of the Filipino soldier against a few retired generals and their spouses who tried to get government land worth billions of pesos and claim it as their own.

BCDA remittances are used to help fund the national government’s development projects including the modernization of the AFP to improve the country’s internal security and external defense.

From 1993 to 2015, the BCDA has raised a total of P28.5 billion for the AFP from the disposition of former Metro Manila military camps through sale, lease and joint-venture developments.

from Manila Bulletin :

professionalism 2p

Promoting Professionalism in the Philippine Real Estate Industry

Filipinos have been used to buying real estate the traditional way, relying on referrals and word-of-mouth. But there is another way and that is the right way.

The current boom in the Philippine real estate market has brought fears of a property bubble.

In the second quarter of 2015, the real estate sector in the Philippines posted a growth of 11 percent. Global data also shows robust growth. This means the potential for sales is immense.

But according to international property services company Colliers, total unsold condominium units in Metro Manila has averaged 75,000 over the last three years. This is twice the normal supply level of 35,000 to 40,000.

Because of this and other potential issues, there is a need to professionalize buying and selling.  A real estate company with an excellent reputation and global track record is the answer. RE/MAX assists buyers and sellers in their real estate transactions in the best way possible, eliminating the fears and apprehensions of fraud.

The company goes beyond just buying and selling because its agents understand the market and how it works. They perform their job honestly, fairly and with accountability. The agents will also give buyers access to its global listings of residential, commercial and luxury properties.

The RE/MAX name gives the franchisee a brand with credibility. It is a Denver-based company founded by Dave and Gail Liniger in 1973 and is the top global real estate franchise in the world. It is also the top real estate franchise in Entrepreneur Magazine’s Franchise 500 and the leading real estate franchise on Franchise Times’ Top 200. Last year, Entrepreneur Magazine named it the #12 Global Franchise.

When you get a franchise, you already have a winning formula that has succeeded in the United States and other countries. The brand is known for agents who produce outstanding results. It gives franchisees all the tools to convey to customers what it has to offer.

If you are a franchisee, you will be able to attract agents who can successfully convert leads to sales. The affiliation also provides instant recognition.

“What we offer realty agents in the world is the best training possible, advertising support and branding the RE/MAX way. We offer technical tools to be able to serve the customer as best they can and give exceptional service to the clients. It is the best marketplace to list your properties,” said RE/MAX Philippines president Leonard Campos.

In the normal business model, brokers buy and sell real estate. The business model fosters relationships because franchisees and agents are trained to understand the needs of their clients. It also gets the best agents through the Power of Recruitment Tools and Support, an approach that targets and attracts winning professionals.

The company encourages franchisees and sales associates to go beyond dreaming of big sales and commissions and be entrepreneurs with limitless potential for progress. “Everybody wins” is something the company always tells its franchisees.

Nobody in the world sells more real estate than RE/MAX, thanks in part to the Power of Marketing Support which has a global reach that includes millions of buyers and potential agents worldwide. Franchisees also get first-rate marketing support from RE/MAX’s Power to Launch.

The Power of Business Development helps franchisees and sales associates with referrals with more than 100,000 agents in nearly 100 countries with over 7,000 offices The global Multiple Listing System also enables franchisees to network and promote their listings globally and do business with other associates worldwide.

The company’s developer partners in the Philippines include Federal Land, Grand Hyatt, Rockwell Land, Vista Land, Horizon Land, Megaworld, Filinvest Land and SMDC. Property portal partners include Property 24, Persquare, and Property Asia.

from Business World Online correpondent, Carmencita A. Carillo :

Duterte

Duterte vetoes use plan

DAVAO CITY — Mayor Rodrigo R. Duterte has vetoed an ordinance removing the 10% green space requirement in horizontal residential projects inIn a Veto Message dated Feb. 19 and released yesterday, Mr. Duterte said the council’s amendment of the Comprehensive Land Use Plan was “vague and ambiguous, prejudicial to public interest, and an exercise of legislative power in ultra vires.”

Mr. Duterte said while the city council is empowered under Republic Act 7160 or the Local Government Code to enact an ordinance, the council may review and amend an enacted ordinance only when the “general welfare of the public is at stake”.The 10% green space stipulated in the city’s zoning ordinance is on top of the 30% open space required under Presidential Decree 1216, which is defined as an area “reserved exclusively for parks, playgrounds, recreational uses, schools, roads, places of worship, hospitals, health centers, barangay centers, and other similar facilities and amenities.”Councilor Bernard E. Al-ag, chairman of the committee on rules, privileges, laws and ordinances, yesterday said they have yet to receive a copy of the veto, but once they do: “We will study it and convene the council to determine our next move. We have the option to accept the veto or to override it.”The 27-member city council will need a two-thirds vote, or 18 of its members, to override the mayor’s action.Councilor Ma. Belen S. Acosta, the only councilor who opposed the amendment, welcomed the veto and stressed the need for “a calm and participative and intelligent democratic process.”Vice-Mayor Paolo Z. Duterte, the council chair, lashed out at Ms. Acosta during the Tuesday council session last week for allegedly encouraging the multi-sectoral group that opposes the removal of the green space provision.Meanwhile, the group — composed of representatives from the academe, nongovernment organizations, and other civil society groups — said it is ready to “exhaust all remedies”, including filing charges against the council for allegedly passing the amendment without proper consultation.At least 43 organizations, including Ban Toxics, Ateneo de Davao University-Ecoteneo, Mindanao Land Foundations, Gabriela, Green Davao Coalition, and Interface Development Interventions (IDIS) signed the petition opposing the council’s amendment of the zoning ordinance.Mary Ann Fuertes, IDIS executive director, commended the mayor for the veto and said they are prepared to make their case should the council override it.

“We hope we will not reach that point,” said Ms. Fuertes.

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Robert G. Sarmiento Properties
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