Megaworld township project in Davao set

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Category: Top News

19 Mar 2014

 

Written by VG Cabuag

Megaworld Corp. on Wednesday said it will establish its first township development in Mindanao, the Davao Park District, envisioned to be the city’s next central business district and information-technology hub for the southern part of the country.

Megaworld said it would spend some P15 billion in five to seven years to develop an 11-hectare property along the S.P. Dakudao Loop in Lanang, Davao City. The area used to be the Lanang Golf and Country Club.

“Through the years, we have witnessed how Davao City has transformed into a major economic center of the country. This city has an impressive track record as an investment and business-friendly city, and a city where peace and order are truly your local government’s top priority,” Jericho Go, Megaworld first vice president, said.

The company did not give specifics on how many towers it would build on the property, but said it would have office towers, residential condominiums to be built by its unit Suntrust Properties, commercial and retail centers, open parks and lagoon and a school.

“The first building to rise in Davao Park District will definitely be an office tower. We are committed to generate around 20,000 jobs in the township in the next five years,” Go said in a statement.

Megaworld usually builds office towers when there is demand either from its existing pool of tenants from mostly business-process outsourcing sector or from new companies that want to set up in the Philippines.

The company expects its office-space inventory to reach 712,000 square meters this year, the biggest in the industry.

“Within the next five to seven years, we see Davao Park District as the next city center where business, pleasure and lifestyle meet— all in one district,” Go said. “Davao City is the economic center of Mindanao. This is the best place to build our very first township in the Southern Philippines, which we envision to be Mindanao’s new central business district. In Davao Park District, the people of Mindanao can finally experience Megaworld’s township concept,” Andrew Tan, chairman and chief executive officer of Megaworld, said.

Most of Megaworld’s development are in Metro Manila, while it has also other large developments in Cebu and Iloilo.

Megaworld’s Davao development is its 10th township since the company introduced the “live-work-play” concept in its 17-hectare Eastwood City in Libis, Quezon City.

The company’s previous announcements involved the development of the former Ajinomoto factory in Pasig now to be called Woodside City, the redevelopment of Manila Southwoods City in Cavite that will be undertaken by its unit Global Estate Resorts Inc.

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In Photo: Megaworld announces its “entry” in Mindanao with its P15-billion Davao Park District—its first on the island. Making the announcement at a news conference are Jericho Go (right), Megaworld first vice president; and Harold Geronimo, Megaworld director for strategic marketing and communications. For Megaworld Project Inquiry contact +639173236123. 

PHL’s young population seen to benefit banking system

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Category: Top News

22 Mar 2014

 

Written by Bianca Cuaresma

THE Philippines’s young population is likely to benefit the Philippines banking system’s loan portfolio in the coming years as a significant part of them are seen to become consumers, the Bangko Sentral ng Pilipinas (BSP) said.

In a recent event, BSP Governor Amando M. Tetangco Jr. said the prospects of consumer financing in the country “remain promising” as the Philippines’s population growth is substantially younger than other countries in the region.

Tetangco, citing World Bank numbers, said that as of end-2012, about 35 percent of Filipinos were younger than 15 years old. This is higher than the rest of the members of the Association of Southeast Asian Nations (Asean), which averaged only 25.8 percent.

Likewise, the country’s 15-below age rate was higher than the developed countries in Asia, particularly China, Japan and South Korea, which only averaged 17.7 percent. Meanwhile, only 19.3 percent of the population of North America was below 15 years old, while the number was still lower in Europe at 15.3 percent.

“What these numbers mean is that the Philippines will see a greater proportion of its population becoming consumers in the next few decades,” Tetangco said.

“This leaves the future market for consumer needs very potent…. Clearly, the demographics favor you,” he added, addressing the thrift bankers in the recently held Chamber of Thrift Banks 2014 National Convention.

Given the bright prospects brought about by the demographic “sweet spot” of the country in the coming years, as well as the upcoming Asean Banking Integration, Tetangco said that banks in the country would have to prepare to be able to reap the benefits of the events that are to take place.

“Unfortunately, the potential that is Asean and our own demographic advantages do not, on their own, create balance sheets. There are still strategic decisions to be made and tactical plans to be executed for these identified positives to be reflected as reality on your balance sheets,” Tetangco said.

The BSP officials earlier said the Asean Banking Integration Framework is seen to commence about five or more years from 2014. 

Bianca Cuaresma

525 new bank branches added to PHL banking system in 2013

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Category: Top News

24 Mar 2014

 

Written by Bianca Cuaresma

More than 500 new bank branches were added to the Philippines banking system last year, as local lenders tried to expand their market reach in preparation for the upcoming regional financial integration.

The local banking industry ended 2013 with a total of 9,935 bank branches nationwide. A total 525 new bank branches were opened during the year.

 The National Capital Region (NCR) still leads the other regions with the most number of bank offices. As of end-December 2013, the nation’s capital region has about a third of the entire physical branch network of the banking industry, with 3,141 branches operating in the area.

This was followed by the Calabarzon region (Cavite, Laguna, Batangas, Rizal and Quezon) with 1,509 bank branches as of end-2013. This was also about 15 percent of the total number of bank branches in the region. Central Luzon, meanwhile, has 998 bank branches as of end last year, or 10 percent of the total bank branches in the region.

The Autonomous Region in Muslim Mindanao (ARMM) has the least number of bank branches in the country with only 21 operating lenders as of end-2013. This was followed by the Cordillera Administrative Region, with only 150 bank branches in total, and by Eastern Visayas, with 183 bank branches.

 In terms of type of lenders, universal and commercial banks still accounted for the largest share of the entire banking system. In particular, there were 5,461 universal and commercial banks in the country. This represented some 55 percent of the total bank branches. This was also 316 branches larger than the 5,145 universal and commercial banks seen in the same period in 2012.

 For the smaller banks in the country, rural and cooperative banks ended the year with 2,646 branches, while thrift banks had 1,828 branches. For thrift banks, as well as for universal and commercial banks, NCR, Calabarzon and Central Luzon still had the most number of bank branches as of end-2013. For rural and cooperative banks, however, Calabarzon, Central Luzon and Western Visayas had the most number of bank branches.

 Earlier, BSP Deputy Governor for the Supervision and Examination Sector Nestor Espenilla Jr. said banks are starting to expand their reach by actively opening up new branches to serve locals. He also said banks were, likewise, trying to open up new branches outside the country to “test their wings” for the upcoming regional integration.

 BSP data showed that there are a total of 51 Philippine bank branches operating overseas as of end-2013. This was larger than the 35 Philippine bank branches seen at end-March 2013.

PHL realizing potential as Asia’s hottest destination for property investment

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Category: Properties

14 Jan 2014

 

Written by Amor Maclang

THE continued growth of the local real-estate sector has, indeed, established  the country as one of the region’s most viable areas for long-term investments from across a vast market of consumers and developers, alike.

Just recently, a market study cited Manila as one of Asia-Pacific’s top five real-estate investment destinations—only strengthening the case of the Philippines as one of the region’s most sought-after property hotspots. A joint industry report entitled “Emerging Trends in Real Estate Asia Pacific 2014,” published by the Urban Land Institute (ULI) and PricewaterhouseCoopers (PwC), documented the rise of Manila unto the top of the competition, jumping from 12th spot last year to finish at number four this year. The study was compiled based from the insights provided by 250 of the region’s most influential personalities in the real-estate industry.

“It is a good niche play—it won’t register on the radar for a lot of institutional investors; it is just too small and too accident-prone,” the report said, referring to the series of unfortunate events that rocked the country back in 2013, among these were the unending pork-barrel controversy, the Zamboanga standoff, the 7.2-magnitude earthquake that rocked parts of Cebu and Bohol in the Visayas, and the devastation left by Supertyphoon Yolanda late last year. “But for people who are prepared to get in there and spend time and understand the market and the drivers, there is good value there.”

Numbers tell the story

One big factor that contributed to the rise of the Philippines, as mentioned in my previous entries here and in the ULI-PwC report, as well, was the continued boom in the office property segment of the local real-estate sector. In Metro Manila alone, there has been a total of close to four million square feet of prime office space. Even with this small chunk of available resource, the Philippines was even able to challenge Tokyo—which has a massive 400 million to 450 million square feet of office space in total—in terms of the number and quality of office space locators. This was because multinational companies, particularly those in the business-process outsourcing (BPO) sector, were attracted to the huge potential of doing business in the Philippines, primarily due to the country’s strong economic showing in the past two years.

 Other elements that have contributed to this are the growing success of the local BPO sector, marked improvement in transparency and good governance, a young work-force demographic, and the large number of expatriate nationals from multinational companies who are continuously on the lookout for business opportunities here.

“Manila is a favorite for the office sector as it was for residential, and for many of the same reasons: an influx of foreign companies has arrived on the market, supporting already buoyant sentiment in a strong economy. Manila also offers the highest prime office yields in Asia, averaging about 10 percent,” the report added. In the survey, the Philippines also came out as a top pick in the retail real-estate category.

Creating a favorable reputation

“While the Philippines has long suffered from a reputation for lack of transparency, a significant number of executives interviewed for this year’s report were more upbeat about the current political environment, naming the country as their preferred choice among similar Asian markets,” the report cited.

This encouraging development now puts the value of priming and branding on the spotlight. Local developers and investors have done a terrific job in their quest to earn a chunk of the niche markets they cater to. Tourism stakeholders, in part, have also played a very instrumental role in building an image of a business- and investment-friendly Philippines, what with the emergence of leisure properties aimed at attracting vacationing tourists and expats, particularly in the Visayas region.

With the Philippine government continuing to exert effort in working with its partners from the local government units and the private sector to achieve all-inclusive growth from all frontiers, we can now clearly see the local property sector enjoying the rewards of having an investment-friendly reputation.

Truly, it will not make for a sound business advice for real-estate developers and stakeholders to miss out being part of a growing Philippine property sector by choosing to do business elsewhere.

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In Photo: One of the fastest-growing real-estate sectors in the country.

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Emerging trends in real estate 2014

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Category: Properties

14 Jan 2014

 

Written by Rizal Raoul Reyes

BUSINESS-process outsourcing (BPO) and, more recently, back-office operations for multinational companies in the finance sector have become the favorites of foreign executives searching for investments in the Philippines.  

In its “Emerging Trends in Real Estate Asia Pacific 2014” report released recently by the Urban Land Institute (ULI) and PriceWaterhouse Coopers (PWC), the Philippines has been getting the attention of foreign capital because of its current political environment, strong macroeconomic fundamentals and impressive credit ratings given by major institutions.

 Alistair Meadows, head of the international capital group of Jones Lang LaSalle, said the 2014 survey indicated investors are more interested in Manila as compared to the previous year’s, citing its fourth position in investment prospects and eighth for development prospects in 2014. “I think the fundamentals are there to attract foreign investors over the next few years,” said Meadows in an interview with reporters at the sidelines of the ULI event in Makati City.

 Further, Meadows said ULI sees the retail market as the “most exciting sector” in the next 10 to 15 years in Asia Pacific as it will be driven by strong consumer spending, growing middle class and rapid urbanization. He said this will also be experienced by Manila as consumer spending continues to grow driven by the solid remittances of overseas Filipino workers.

 However, Meadows said the Philippines needs to address structural issues, particularly the real-estate investment trust (REIT), to strengthen the ability to attract its way into the market specifically foreign capital. He added a combination of domestic and foreign capital would be healthy for the property market and the whole economy as there would be more funds circulating in the market.

 Nevertheless, the report stressed there are good prospects as capital rates are pegged at the 9-percent to 10-percent range, while developer returns range from 15 percent to 20 percent.

 Although the country’s economic fundamentals are good, a foreign investor said the Philippines is considered a dark horse. “I like the Philippine economy from a demographic perspective, and they do manufacture more people than people think,” remarked Meadows.

 “The problem is just lack of political leadership and the amount of corruption, which, at the end of the day, stops infrastructure works from being completed,” he pointed out.

 In the same report, another foreign investor active in the Philippines noted the huge amounts of office space taken up in Manila two years ago, “which, at some four million square feet, rivaled uptake in Tokyo,” whose 400 million to 450 million square feet was much larger. “So, Manila is where India was 10 years ago,” said the investor.

 “Multinationals, not just call centers, will be adding employees in Manila over the next three years, the reason that you have an English-educated workforce who is 95-percent literate,” he added.

 The IT and Business Process Association of the Philippines (ITBPAP) is eyeing $25-billion revenue for the country in 2016. In 2012 the ITBPAP reported the industry posted $13.2 billion in revenues.

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In Photo: Multinational companies in Metro Manila

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