| Written by Rizal Raoul Reyes / Correspondent |
| Wednesday, 09 December 2009 20:30 |
THE Philippines’s property industry showed resiliency amidst the financial meltdown prevailing in the global market and is expected to display a positive trend going into 2010, according to the Philippine office of a major property management consulting firm belonging to the Fortune 500 and S&P 500 groupings.
Rick Santos, chairman of CB Richard Ellis Philippines, (CBRE), said on Wednesday the property industry survived the onslaught of the global financial crisis as developers continue to open new projects in response to increasing demand.
“The property industry has remained strong and resilient amid the global financial crisis,” said Santos in a briefing in Makati City.
As a result, Santos said majority of the Philippines property companies remained profitable in the first nine months of 2009.
He cited the SM group with SM Prime Holdings Inc. and SM Development Corp. (SMDC) as major players together with its affiliate Anchor Land Holdings as the stars of the industry in that period.
The SM Group is focused on retail malls, residential condominiums and hotel developments across the country.
“Real-estate products will continue to sell given market demand but must be in the right location and responsive to buyers expectations as to price, quality and timely delivery,” Santos said.
SMDC, the middle-income residential condominium development arm of the SM group, reported P1.3-billion net income in the first three quarter.
Santos said there are active players such as Ortigas & Co, Greenfield Development DMCI Homes, Phinma Properties and Rockwell Land which are now venturing to pocket developments, to get a share in the growing demand for affordable residential dwellings for both housing and condominiums.
“These developers have significant land holdings and strong balance sheets that empower them to launch and complete well planned real-estate projects,” he said.
The trend is expected to continue into 2010 and onwards as the Philippine economy slowly regains its growth momentum which has been temporarily derailed by the global economic slowdown, according to Santos.
With the passage of the Philippine REIT Act of 2009, Santos sees investment in the property sector to accelerate as more investors will seek more new opportunities previously limited to institutional investors.
Among the income-generating assets that can be converted into real-estate investment trusts are office buildings, residential condominiums, townhouses, apartments, shopping/outlet centers, tourism-related facilities such as hotels, resorts, restaurants, golf courses; health care (hospitals, nursing homes, retirement homes and drugstores); warehouses, R&D centers, and infrastructure such as expressways, railways, ports, power plants.
Joey Radovan, CBRE Philippines vice chairman and head of global corporate services, said there will be consolidation of office spaces in 2010 as business process outsourcing (BPO) companies and other companies will look for cheaper rates.
As of the third quarter of 2009, Radovan said tracked takeup for the Metro Manila office market was 158,319 square meters. In 2008, it was approximately 225,000 square meters. The year 2007 has the highest with 330,000 square meters.
“The slowdown was expected because of the completion of the big transactions and companies have become conservative in their plans when the financial crisis emerged in the horizon,” Radovan said.
Radovan said Cebu is the next big thing as far as development of business districts is concerned. He said growth in demand has resulted in major developments in the office market in Cebu and the fringe areas of Lapu-Lapu City and Mandaue City.
He said the recent announcement of Ayala Land Inc to develop a new IT park indicates there is still room for growth in the area. Cebu Business Park and the Asiatown IT Park are the newest business districts in Cebu City.
“Cebu is the place to watch as far as development of business centers is concerned,” said Radovan.
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