Philippine Real Estate News – December 2015

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her’s some “select: articles about Philippine Real Estate and Economy from various newspapeer and online correspondents for your reference :

from Interaksyon’s Philippine News Agency :

BCDA seals P12-billion deal for solar farm project in Clark

Green City

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MANILA — State-owned Bases Conversion and Development Authority (BCDA) has sealed a deal with Sunray Powe, Inc. (SPI) for the development of a 100-megawatt solar power facility worth P11.75 billion in Clark Green City in Central Luzon.

The lease agreement between BCDA and SPI is for 25 years and renewable for another 25 years subject to renewal negotiations.

SPI’s solar project will generate 250 jobs once operational and will employ 1,000 workers during construction period.

“We look forward to the long-standing partnership with SPI to provide clean and renewable energy not only to Clark Green City but also to the neighboring areas in Central Luzon,” BCDA President and CEO Arnel Paciano Casanova said.

“We are very mindful of the impact of climate change in the Philippines and there is no other recourse but to adopt renewables as the main source of energy to power Clark Green City,” he added.

Once the project is completed, SPI’s 100-megawatt facility will be the country’s largest solar power plant.

During the second half of this year, BCDA also forged a deal with SSR C-Solar Power Inc. for the same lease agreement for the latter to build a 20-megawatt solar farm worth PHP1 billion within the 25-hectare land in Clark Green City.

Clark Green City, a 9,450-hectare property at the Clark Special Economic Zone, is targeted to be the country’s first smart, green, and disaster-resilient metropolis.

from Manila Bulletin’s correspondent, Lee C. Chopongian :

FDI inflows down 5.5% on-year for first 11 months at $4.5 billion

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The country’s foreign direct investments (FDI) net inflows as of end-September amounted to $4.5 billion, lower by 5.5 percent compared to the same period in 2014 of $4.8 billion.

The Bangko Sentral ng Pilipinas (BSP) in a report yesterday said equity capital investments reached $1.44 billion or up 26.3 percent year-on-year in the first 10 months which the BSP explained was due to a 38.1 percent increase in gross placements of $2.2 billion. This exceeded withdrawals amounting to $789 million  during the period.

“These equity capital investments emanated largely from the US, Japan, the United Kingdom, the Netherlands, and Singapore. Investments were channeled mainly to manufacturing; financial and insurance; real estate; wholesale and retail trade; and construction activities,” said the BSP.

Non-residents’ net investments in debt instruments however declined 16.2 percent  to $2.52 billion while reinvestment of earnings also fell by 11.7 percent to $575 million.

The BSP said that for the month of September alone, FDI managed a record-high of $1.5 billion net inflows, about 123.4 percent more compared to the previous year’s $680 million.

“This developed as a result of the notable increase in non-residents’ investments in equity capital and debt instruments issued by their local subsidiaries/affiliates,” said the BSP. “In particular, equity capital investments during the month increased more than threefold to $600 million, as gross placements of $1.2 billion more than offset withdrawals of $553 million.”

A large portion of equity capital placements came from investors based in the United Kingdom, the Netherlands, Japan, the US, and Germany. “By economic activity, equity capital investments were channeled mainly to manufacturing; financial and insurance; construction; wholesale and retail trade; and real estate activities,” said the BSP.

For the month of September, investments in debt instruments totaled $869 million which was 89.7 percent higher year-on-year. “(This is) on account of significant intercompany borrowings, particularly, in the transportation and storage, and construction industries,” said the BSP.

As for the reinvestment of earnings, this fell by 17.1 percent to $51 million.

According to the BSP, “the surge in FDI inflows in September reflects investor confidence in the country’s strong macroeconomic fundamentals (sustained GDP growth of 5.8 percent in Q2 2015, manageable inflation, consistent build-up of foreign exchange reserves, and stable exchange rate).”

from reuter’s correspondent,  Neil Jerome Morales :

PH equity capital raising may reach $4-B next year – PSE

MANILA – Philippine companies could increase equity capital raising on the local stock exchange to P200 billion ($4.2 billion), the head of the country’s bourse said, adding that eight to 10 firms were likely to pursue a listing.

Market volatility has taken its toll on listings this year with property firm D.M. Wenceslao and Associates Inc. delaying a $150-200 million IPO and homebuilder and contractor Datem Inc. postponing an offering of up to $75 million.

Equity fundraising via the bourse, through either listings or secondary share offerings, has so far come to 184.6 billion pesos, exchange data showed.

A figure above 200 billion pesos next year would mark the highest level since 2012 when a record 219 billion pesos was raised.

“Probably around 200 billion pesos is a good target,” Philippine Stock Exchange CEO Hans Sicat told Reuters late on Thursday.

Investors are expected to be cautious until presidential and local elections in May are over and clear policies are revealed by the new administration.

After a strong six-year run, the Philippines benchmark index has fallen 6.7 percent so far this year as foreign investors exit emerging markets ahead of an expected U.S. rate hike.

But the decline has not been as steep as some other Southeast Asian countries with Thailand’s main index falling 13.7 percent and Indonesia’s benchmark index tumbling 15.2 percent.

from Malaya.com correspondent, Albert Castro :

ARANETA CENTER: FROM SHOPPING CENTER TO A

‘LIVING’ DISTRICT

araneta center

Araneta Center, the pioneering commercial center and premier entertainment hub of the ‘60s to ‘70s,  is being revitalized to keep up with the times.

With a budget of P35-billion, the 10-year redevelopment hopes to turn Araneta Center into a more diversified area, just like any other central business district and commercial hub, complete with residential, office  and retail developments.

“Araneta Center is one of the oldest commercial business districts in the Philippines. Compared with the other business centers, it was the (only) one that had an entertainment component,” said Rowel Recinto, Araneta Group Management consultant.

“But places evolve, the economy has evolved, Araneta had to keep up with this development of the economic environment,” Jacinto said.

He said an initial P10 billion has been spent to  jumpstart the redevelopment of the 30-hectare center.

“We have more than 2,000 tenants, more than 1 million (square meters) of shopping area. We have now 400 hotel rooms and more to come. We’re going to have 18 residential high-rise towers for over 9,000 (residents),” Recinto said in outlining the future plans for the property.

Among these is Gateway Mall 2 which will have  another 140,000 sq.m. gross floor area (GFA) and an extension of the first   Gateway Mall, which has 910,000 sq.m. GFA.

“We are now in the final planning stages of Gateway Mall 2 (which is) part of the renewal of Araneta Center. This is not going to be a luxury mall, not by any standard. It’s going to be upscale but not going to be luxury. It (will) still address the requirements of our constituents,” he added.

Recinto said bidding  for the construction of  the new mall is set for the middle of next year.

“We obviously have to live up to a certain legacy. We are known for certain positive things. We faced up squarely to things that Araneta Center needs to address,” Recinto said in explaining the goal  of redeveloping Araneta Center into an “urban jungle.”

“Araneta is no longer a shopping center and it will never be a shopping center again. The dynamics have changed. As trends show, people would like to be nearer their place of  work. With a residential (component) here, it gives them the added amenities of the shopping convenience, of dining options.  It’s a living district now,”  Recinto said.

Recinto said  25 percent of the property has been reserved for the residential portion dubbed Manhattan City Garden of  Megaworld Corp. through a joint venture with Araneta Center.

“There are five towers that have been finished. Another three are about to be finished. We are continuing with the development of the next phase of the Garden City,” said Recinto.

Recinto said in the pipeline are five BPO office buildings as high as 35 storeys with the first tower CyberPark Tower One set for opening by January.. Cyberpark Tower Two has  been opened for bidding.

Cyberpark buildings boast of a big floor plate of 2,600 sq.m.

The 400-room Novotel  recently soft-opened,  a proof that Araneta Center is “a destination of brands.”

“With the presence of Novotel here, we’re really changing the environment,” Recinto said.

Recinto said the redevelopment of Araneta Center continues to evolve, depending on the expiry of existing leases. At best, the company has redeveloped just a fifth of the area.

Recinto also said property prices in Araneta have nearly tripled in the past years since the redevelopment started with properties in Mahattan Gardens, the residential component, now priced at P120,000 per sq.m., from the introductory price of P45,000 per sq.m.

from goodnewspilipinas.com correspondent, the GNP Team :

KPMG report: PH ready to be ASEAN Production Hub

growth pr

The Philippines is ready to be South East Asia’s key production hub when regional integration takes please before the year’s end.

The 78-page report discussed the country’s prospects on the looming integration of the 10-member Association of Southeast Asian Nations (Asean).The assessment was contained in the report, “Moving Across Borders: The Philippines and the Asean Economic Community” released by auditing firm KPMG R.G. Manabat & Co.

According to the document, “Investors can view the Philippines as a gateway to the rest of the region as well as to Asean’s six free trade partners in East Asia.”

The regional integration report cited the country’s young workforce and English proficiency as advantages to factories.

The young demographics, among the youngest in the Asean, are said to work for the Philippines’ favor as the country can bring back factories leaving China for Asean locations. The potential large working force to man factories determines productivity, the report said.

Competitive property prices and cheap credit were also cited as giving the Philippines an edge over its neighbors.

The report took note of the recent credit upgrades given to the country saying, “Such rating signals a good financial reputation to potential foreign investors.”

The Philippines is also preferable due to its property prices being the fourth lowest compared to other ASEAN countries.

for further details on this investment opportunity, please call our office at 8041701 or 5148481.

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robert

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Robert G. Sarmiento Properties
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