Philippine Real Estate News – March 2016

real estate news 27 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 Malaya.com.ph :

Philippines to lead Asean Property Growth

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Given the upward trend witnessed in the Philippines’ real estate sector in the past 12 months, industry experts are optimistic that the growth will be sustained this year, according to The Property Awards Report.

However,  the report noted there are major areas for growth that need to be addressed to maximize the sector’s potential.

Manila, has seen major investment from global capitalists, The Property Awards Report said quoting  auditing and advisory firm BDO’s “Asian Real Estate” report which added that the city is in the same league neighboring hub Bangkok.

There are certain aspects, however, where Philippine cities can surpass its neighbors, the report added.

With the Asean economic community now in effect, the Philippines is seen by many analysts to be in a good position to lead in the region’s property growth because of its young population and English-language proficiency.

The report said  success can be achieved by implementing certain changes, beginning with infrastructure.

The report quoted Ramon F. D. Rufino, executive vice-president of The Net Group and chairman of the Philippine Green Building Council (PhilGBC), as saying that  the Philippines is still far behind many countries when it comes to environmental initiatives.

“But the good news is there is growing momentum,” the report said quoting Rufino.

“The awareness and desire for sustainability is already strong, but we really need to improve on the level of commitment and action,” added Rufino as stated in the report.

The Property Awards Report also said Rufino  highlighted the PhilGBC’s achievements in creating awareness for green building and sustainability, and the establishment of the BERDE rating system when he received the Real Estate Personality of the Year award at the Philippines Property Awards 2015.

“There are so many areas to work on but our top priority is for more and more companies and projects to secure green building certification. It’s easy to market and advertise real estate projects as `green’ but only certification provides the users, the public, and the government with the assurance that a project is truly green and sustainable,” Rufino said in the report released to media.

The Property Report also noted Cyndy Tan Jarabata, president of TAJARA Leisure & Hospitality Group Inc and three-time chairperson of the Philippines Property Awards,  agreed with Rufino’s  observation.

The report said Jarabata had noted that many big developers have joined the green movement in the last few years.

“They look at innovation and they look at design very carefully,” the report quoting Jarabata.

The Property Report said Jarabata had cited  some developers are also looking to incorporate smart or green technologies in their projects.

“It’s bound to happen not only because it’s what the consumer wants, but because it’s the right path to progress. We have to continue to be mindful of occupier’s or market demands in living, working and space planning,” she said in the report.

Around 40 percent of Filipinos now have access to the Internet through their smartphone, based on industry estimates. It has allowed the rise of property portals, which reveal that investors are also looking beyond congested Metro Manila for property investment.

The Property Awards Report said there are real estate opportunities outside Metro Manila.

Citing Thomson Reuters Foundation statistics, the report said  real estate loans in the country hit a record high of P1.23 trillion in the third quarter of 2015 per data from the Bangko Sentral ng Pilipinas.

This  reflects a growing confidence in the property sector as a whole, as well as the tremendous support given by the banking and lending industries in the Philippines.

Secondary cities such as Iloilo and Cebu have become more popular BPO hubs, with the latter being named the country’s second-largest (and eighth biggest worldwide) outsourcing center, according to  Michael McCullough, managing director of KMC MAG, an international affiliate of Savills.

Putting these secondary cities on the global investment map is the next step for developers, who are increasingly using social media to reach and educate first-time and even experienced buyers or renters.

Although there are many exciting investment opportunities in the Philippines, there are concerns regarding affordability of residential properties. To date, industry experts estimate that the country lacks some 5 million housing units, and that number can only grow as prices soar in the coming years.

The Chamber of Real Estate and Builders Associations Inc (CREBA) is advocating  its five-point housing agenda, “A Home for Every Filipino.”

The organization is also pushing for the establishment of a “Department of Housing and Urban Development” in the country as a necessary reform to address the housing situation in a time when a real estate bubble is always a probability.

Everyone can learn from one another PropertyGuru, Asia’s leading online property portal group with 14 million monthly users, will be holding the Property Report Congress Philippines 2016 on March 15 at the Fairmont Hotel, Makati City to discuss the country’s real estate industry.

The summit will feature the country’s top industry experts, including opening keynote speaker Lindsay  Orr, chief operating officer of Jones Lang LaSalle Philippines and John  Mims, chief connector and managing partner of The Hunting Ridge Group.

from Business.Inquirer.net correspondent : Doris Dumlao-Abadilla

More Ayala B & Bs

ayala lio pr

AFTER the successful pilot-test of El Nido Cove bed and breakfast (B&B) in mainland El Nido, property giant Ayala Land Inc. is getting the hang of the B&B business.

ALI is set to unveil two more B&B outlets with 20 rooms each at its new beachfront tourism estate Lio Resort Town in northern Palawan later this year. These new B&Bs will thus be among the first few neighbors of the soon-to-rise 150-room Seda Lio resort and a burgeoning retail strip. Seda Lio—the first resort line under ALI’s homegrown hospitality brand Se     da—is targeting to offer rooms at $175 a night, but the new B&Bs may offer even cheaper rooms at $100 or less.

“We’re broadening the market,” Jose Emmanuel Jalandoni, ALI senior vice president and group head of commercial business told Biz Buzz.

To recall, ALI entered the upscale end of the hospitality supply chain in Palawan first and now runs four deluxe island-resorts—Apulit, Lagen, Miniloc and Pangulasian (where room rates are more than $300 a night). But the next stage of expansion in Palawan is to build an entirely new beachfront town with a more diversified offering. Lio, a 325-hectare project with a three-kilometer beachfront in Barangays Villa Libertad and Pasadena in mainland El Nido town, is envisioned to have a mix of hotels and resorts, commercial developments and residential communities that blend with the natural landscape.

Jalandoni said the group had been extremely happy with how the first B&B in El Nido was performing. ALI is now ready to replicate the model and may even be able to offer cheaper and smaller rooms at Lio.

Having the B&Bs along with Seda Lio and the retail mall is part of the strategy to draw foot traffic to the new resort town and make it accessible even to backpackers. Ayala’s B&Bs are seen to raise the bar for similar establishments and likewise create a model for sustainability as they will produce biodiesel through the recycling of used cooking oil and use them for internal power generation.

from Manila Bulletin’s correspondent,  Mar T. Supnad

Bataan Freeport work force up 29%

Mariveles, Bataan — The Freeport Area of Bataan (FAB) created over 5,000 jobs in 2015 with more companies opening up and spawning thousands of employment inside the Freeport, touted as the country’s emerging economic dragon.

“The investments pledged by the locators are felt by the people on the ground through the opening of more job opportunities.

We assure the national government and the people that we will continue to work hard and bring more investments to contribute to the growth of the local economy,” AFAB said.This surge in employment contributes hugely to the growth of local economy with people having more money to spend with and with establishments getting more revenues, said in a statement by Authority of the Freeport Area of Bataan (AFAB).

Adding to the employment boom, international and local companies in FAB are still in need of over 2,600 employees as new companies start operations and existing locators expand bases.

AFAB stated that the newly registered locators in 2015 are expected to open at least 4,900 jobs in the next three years.

Newsmen learned that since 2010, the provincial government of Bataan led by Gov. Abet S. Garcia, author of AFAB law when he was a congressman, and the AFAB administration have been working hard to bring more investors and big manufacturing corporations to the freeport.

from Manila Times correspondent, Catherine Talavera :

Affordable Housing Sales on the Rise

As the world marks Earth Day, constructi

But industry seeks more govt support

LICENSES to sell socialized housing projects jumped 82.42 percent in 2015 from 2014 levels, latest data from the Housing and Land Use Regulatory Board showed. But developers are still drumming up more government support for them to fill the ever-burgeoning demand for low-cost housing in the country.

According to HLURB data, the number of licenses to sell socialized housing projects nearly doubled from 16,876 in 2014 to 30,786 in 2015.

Developers are finally taking notice of this long-neglected segment of the property market, where the real demand is, noted Julius Guevara, director for research and advisory in the Philippines of property monitor Colliers International.

“There are a lot of developers going into it,” Guevara shared with The Manila Times, adding the direction now is going out of Metro Manila, where land prices have gone too high for affordable housing development.

“I think, now, the focus of the developers is moving from condominium developments to affordable housing in the provinces outside of Metro Manila,” Guevara said. “So, I think, it’s a move towards the right direction.

He said unlike in the previous years, when developers were focusing on the Metro Manila condominium market, developers are now shifting their attention to developing more affordable projects in the provincial areas.

“Demand-wise, I think it’s been steady—the affordable housing market—unlike the decline in the condo market in Metro Manila,” Guevara said.

He said the price of land in the provinces is much cheaper than in Metro Manila, where the scarcity of land has made land prices even more prohibitive.

Guevara said land prices in the fringes of the capital region have also gone up, like in Cavite province, pushing developers to go further out.

Good thing, he said, in the fringes of the cities, relatively cheaper land prices still exist.
According to him, cheap lots can still be found in the easternmost part of Metro Manila like Pasig and Cainta, and also in the southernmost part of the capital region like in the fringes of Las Piñas City.

Wanted: More Government support

But Guevara said such circumstances are still wanting.

“The demand is there, but the product is still not there,” he said. “A big portion of the housing backlog is in those who could not afford housing. So, it’s either you adjust your prices or sacrifice quality.”

Guevara noted that while the government, through lower- interest loans from its agency Pag-Ibig Mutual Funds, another way is to subsidize low-cost housing.

“…Subsidize it by either lowering the price or monitoring the prices,” he said.

As for affordable housing firm Phinma Property Holdings Corp., the government needs to have a comprehensive program to address the housing backlog.

“I think the government needs to be proactive in implementing a comprehensive program to address the housing backlog,” said engineer George Richard Siton, Phinma Properties’ vice president for socialized housing division.

Phinma Properties is one of the local developers focusing on putting up low-cost housing subdivisions in the country.

The company’s stance has been to put up housing subdivisions in downtown areas, where the local government units help by giving concessionary financing schemes for target project beneficiaries, such as government employees and indigent communities.

Meanwhile, Guevara said several housing groups, such as the Subdivision and Housing Developers Association and the Organization of Socialized Housing Developers of the Philippines, have also been pushing for the serving of the low-cost housing sector.

from Philippine Star’s correspondents, Helen Flores and Alexis Romero :

Rising sea levels threaten 13.6 M Pinoys – Gore

sea level

MANILA, Philippines – At least 13.6 million Filipinos living in coastal areas may have to relocate to higher ground due to the accelerating rise in sea levels brought by climate change.

This was the warning of environmental advocate and former US vice president Al Gore during the opening of the 31st Climate Reality Leadership Corps Training in Pasay City yesterday.

Gore, founder of the non-profit Climate Reality Project, said sea levels are rising fast due to global warming.

“Sea level in the Philippines is projected to rise two to three times faster than the global average,” Gore said, adding this exacerbates the country’s vulnerability to natural disasters.

Scientists have blamed man-made climate change for the fast rise in sea level in the past 2,800 years.

Gore’s documentary on global warming titled  “An Inconvenient Truth” helped earn him the Nobel Peace Prize in 2007.

He made a lengthy presentation on the extreme weather events brought by climate change in different parts of the world, particularly in developing nations.

The three-day workshop was attended by at least 700 climate activists all over Asia.

Sen. Loren Legarda, the event’s keynote speaker, said she would file an energy efficiency bill in the 17th Congress, as part of the country’s commitment to reduce carbon emissions.

Legarda said she would monitor the enforcement of laws that promote de-carbonization, including the Clean Air Act, Renewable Energy Act, and the Ecological Solid Waste Management Act.

“We will track compliance with equally important laws that help us prepare for climate realities, including the Clean Water Act, Climate Change Act, the Environmental Awareness and Education Act, the People’s Survival Fund Law and the Disaster Risk Reduction and Management Act,” Legarda said.

She said she would push for the progressive reduction of least-efficient coal-fired power plants and work toward banning their construction.

Despite its commitment to reduce carbon emissions, the Aquino administration has approved 21 new coal-fired plant projects in the past five years.

Gore urged sectors demanding government action on climate change to continue what he described as a “moral struggle” amid the Philippines’ continued support for coal-fired power plants.

He compared the climate movement to those who fought for the abolition of slavery, civil rights, and the right of women to vote, saying such advocacies faced stiff resistance before they succeeded.

Gore said the people should pressure their leaders to act on climate change despite efforts by skeptics to muddle the issue.

He said that while the Philippines has experienced a number of weather-related disasters in almost two decades, the country is still reluctant to use clean energy.

from Manila Bulletin :

New Office Developers keep the Market Vibrant :

office building 2pr

Construction giant Wilcon Home Depot and retailer Mercury Drug are among a new wave of office developers now competing with established real estate brands like Megaworld, SM Prime and Ayala Land to meet the work space needs of the BPO industry projected to continue expanding for the rest of this decade.

In the past two years, the BPO industry’s number of full time employees (FTEs) grew from one million in 2014 to 1.2 million in 2015 and is likely to expand to a projected 1.3 million in 2016, according to data provided by JLL Philippines.

Sheila Lobien, JLL national director, noted that 1.2 million FTEs would require an estimated office space of 4.8 million square meters. The projected 1.3 million FTEs in 2016 would need a total of 5.2 million square meters or an additional 400,000 sqm from the 2015 level.

Like other boutique office developers, niche developer Panorama Development Corp. which formerly focused only on residentials and warehouses now has an office portfolio of close to 70,000 sqm spread over three towers. More than half of its inventory has been leased even if the third building is still to be completed this year. In early 2015, Morning Star’s three buildings offering a total 66,775 sqm were fully leased.

The market has been favorable to those who invested in the office segment five or six years ago, according to Lobien. But following an estimated supply glut of close to 800,000 sqm by the end of this year, new real estate players are forewarned to strategically time building completions and to avoid adopting a herd mentality to avoid vacancies.

JLL head of research, consulting and valuation Claro Cordero assured that BPO demand, which has been driving the Philippine office market for over a decade, is expected to continue growing.

“Supply spiked in 2015 and again is most likely to peak in 2016. Building completions in 2017 and 2018 have been projected to decline,” he said.

He is thus confident that the oversupply will be fully absorbed in the next two years. The rate of growth in supply has simply been higher than the rate of growth of demand.

Meanwhile, the recurring income streams offered by rental leases continue to be attractive to businesses with more cash than they need at the moment. According to Cordero, most of these boutique office players appear to be investing in real estate as a means of diversification.

“You don’t want to be exposed only to one segment of the economy. You plan for the rainy day by venturing into property,” he said.

His observation is further supported by a JLL global report that “there is a greater propensity to save and a greater proportion of these savings are expected to target real estate.”

In addition to providing stable cash flows, office properties occupy land that appreciates over time.

Cordero explained that with office yield rates now at seven or eight percent, firms that are diversifying into the property sector would rather finance their investments with borrowings pegged generally between five or six percent.

“They can finance their properties through borrowings without taking out money from their own business and still enjoy the benefits of diversification,” he concluded.

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Robert G. Sarmiento Properties
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