The Home Kings will start serving Filipino households

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Category: Entrepreneur

18 Mar 2014

 

Written by Rizal Raoul Reyes

FOR a long time, Filipinos have depended on the reliable handyman for house-maintenance jobs such as leaking faucet, clogged drainage and busted electrical wiring. However, relying on the neighborhood handyman or repair man has several drawbacks, including the absence of warranty, dependability and quality.

With the entry of Home Kings in the Philippines market, Filipinos will now experience professional and the most-comprehensive home-service maintenance provider in the country. To make it more convenient to customers, Home Kings can provide supplies and consumables.

Jeffrey Sosa, president and chief executive officer of Home Kings, says the formation of Home Kings is aimed to give professional and competent touch to home maintenance to the Filipino homeowners. Sosa has a thorough knowledge in the maintenance business as he founded Sosa JB Property Management Corp. (SPMC). Under Sosa’s vision and guidance, SPMC has grown its client portfolio with repeat business and referrals. Further, SPMC expanded its property administration and maintenance, and engineering and technical-services operation on a nationwide scale. The company has an office in Dubai with a 100-percent Filipino work force in line with the goal of providing employment to skilled Filipinos.  Further, SPMC also has a business partner engaged in building maintenance.

“With the establishment of Home Kings, we seek to bring the same quality of SPMC to the Filipino homeowners,” Sosa says in a recent interview with the BusinessMirror.

Home Kings will be launched on March 27 SMX Convention Center, SM Aura Premier in Bonifacio Global City.

Jemmelle Felize S. Pastor, vice president for client services, assures Home Kings will deliver quality service like the parent company because it is manned by professional workers who can respond to the job. “Home Kings wants to educate and professionalize the market by being proactive in doing preventive maintenance in several parts of their homes,” says Jemmelle, the second among the three daughters of Sosa.

Kristina S. Cayetano, vice president for human resources and operations, says it will be more economical in the long run to avail of Home Kings’s services because this spares home owners from spending a higher amount in the future when problems become undetected. “We are the total home-maintenance solution because we can provide the services and we understand the household needs of the Filipinos,” says Kristina, the youngest daughter in the Sosa family.

Home Kings offers air-condition maintenance, home cleaning, plumbing and sanitary maintenance and electrical-system maintenance. Further, it provides additional services such as carpet, furniture or mattress shampoo, home carpentry works, cockroach, mosquito and rat control, termite control, free assessment of home improvements and move-in cleaning service.

“It is equipped with an engineering department and managed by very efficient and competent managers,” Jemmelle says.

Home Kings will bring the same commitment and professionalism to customers just like what SPMC did. Home Kings is the only comprehensive and professional home-maintenance group in the country.

“I guess it took so long to develop the product because we have to be ready. If we’re not prepared, we will not dive into this business.  We don’t like plan B,” Jemmelle remarks.

Sosa says Home Kings will initially serve the Metro Manila market.

Jemmelle and Kristina say working in the family business is not alien to them because their father used to bring them to the office when they were younger. “We grew up with the business.  I think the reason we didn’t enroll in the right courses in college because we were both in denial that we will be later working in the family business,” Jemmelle quips.

Jemmelle started to work with the business in 2006 as an all-around administrative assistant. Kristina worked with other companies before working with the family business to get the feel of working outside the family business. She joined the company in 2009 and worked initially as human resource administration assistant

“Our exposure was good training for us. It taught us all the aspects of the business. Nobody can give us the run-around,” Jemmelle points out.

Just like SPMC, Home Kings also seeks to provide jobs to the skilled technicians. Further, the Sosa family is an equal-opportunity employer as it hires qualified people with disabilities. “By giving them employment opportunities, we give them self-esteem and help them to become productive citizens of the society,” Sosa says.

“Although we get some tax exemptions by employing the handicapped, we don’t claim it because it’s part of our social obligation,” Jemmelle says.

Jemmelle says growing the business for Home Kings is not difficult because SPMC has developed an excellent track record in property management and the network of satisfied clients. “Our dad has also crafted a sterling reputation in property management” Jemmelle says.

At the same time, Jemmelle says this will be matched by 101-percent commitment of the company in delivering the services promised to the client.

Sosa says they have to learn not only in managing the prospects but the business dimension as well. “You have to manage not just the asset but the entire business because the condominium is corporation by nature,” Sosa says.

 “We have to learn these things because in this industry it’s everything architectural, electrical, mechanical, chemical, civil, even accounting, housekeeping and security,” Jemmelle adds.

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In Photo: The Home Kings team (from left) Kristina, Jeffrey and Jemmelle Sosa.

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GMR-Megawide Consortium still needs to pass financial review

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Category: Economy

23 Mar 2014

 

Written by Lorenz S. Marasigan

THE Department of Transportation and Communications (DOTC) is still in the process of reviewing the financial proposal of front-runner GMR Infrastructure Ltd. and Megawide Construction Corp. Consortium for the P17.5-billion Mactan-Cebu International Airport (MCIA) New Passenger Terminal Project.

Transportation Undersecretary Jose Perpetuo Lotilla said it is still possible should the GMR-Megawide Consortium fail to hurdle the review, the agency will have to review the proposal of the bidder with the second-best tender.

The partners offered a P14.4-billion premium on top of the project cost, allowing the Filipino-Indian consortium to secure the top position in the auction held last December.

Bidding rules, according to Transportation Secretary Joseph Emilio Abaya, provide that only the winning bidder’s financial evaluation shall be evaluated.

If its offer fails the review, that is the only time the agency can move forward to assessing the financial bid of the second-best bidder, which in this case is the tandem of Filinvest Development Corp. and Changi Airports Mena Pte. Ltd.

The Filipino-Singaporean partners offered a lower P14-billion premium for the project.

“If Megawide-GMR fails, the bids and awards committee will move to Filinvest-Changi. That’s what the rules provide,” Abaya told the BusinessMirror via text.

Awarding for the project was originally scheduled last January. It has been delayed for about three months now because of allegations of conflict of interest between two parties involved in the auction.

Filinvest-Changi alleged that the managing director of Malaysia Airports Holdings Bhd. Tansri Bashir sits as a director in four GMR airports, namely, Delhi International Airport Private Ltd., GMR Hyderabad International Airport Ltd., Istanbul Sabiha Gokcen International Airport Group and GMR Male International Airport (Maldives).

The Malaysian firm participated in the auction for the said project together with Filipino partner First Philippine Holdings Corp.

Megawide-GMR, however, explained that Bashir, who is a board member of the four airports enumerated, “has no role to play in the bid, since he is not a member of the Board of Directors of GMR.”

Transportation Spokesman Michael Arthur Sagcal admitted that the government is having a hard time collecting pieces of evidence to validate the accusation, noting that there is a “dearth” in the proof available.

“There is no decision yet as to which group will win the contract.  No recommendation has been made to the secretary,” Sagcal said. “[The agency] is being thorough in resolving the matter to ensure that its decision will be in accordance with what the law and the rules alone prescribe.”

“We will, of course, endeavor to achieve the target date,” Lotilla, who chairs the bids and awards committee of the agency, said separately.

According to bidding rules, the special prequalification bids and awards committee (Special PBAC) shall recommend a winning bidder to Abaya for the awarding of the project. After the Transport chief’s approval, the Mactan-Cebu International Airport Authority (MCIAA) shall then assess the recommendation.

The MCIAA Board of Directors will then decide on whether or not to approve such award.  Only after these steps are observed can the concession be considered as having been awarded.

The Special PBAC discusses and debates on the relevant issues throughout the procurement process, to ensure proper decisions are made.  From pre-qualification to post-qualification, the Special PBAC reviews the recommendations of the technical working group (TWG) and its consultants.

In each of the bidding stages, the TWG and the consultants are required to present their findings to the Special PBAC, which then has the opportunity to dissect the summary reports prepared and submitted by the TWG.

All these steps are taken in accordance with the Build-Operate-and-Transfer Law, which provides for the particular actions required in the conduct of bid activities.

Megawide has cemented its image as a mainstay in the government’s flagship infrastructure program, bagging a number of public-private partnership (PPP) projects: the P16.42-billion PPP for School Infrastructure Project (PSIP) Phase 1, two of the five contracts under the P8.8-billion PSIP Phase 2 and the P5.7-billion deal for the construction, operation and maintenance of the Philippine Orthopedic Center.

It has also purchased bid documents for the P64.9-billion Light Rail Transit Line 1  Cavite Extension Project and the P2.2-billion Integrated Terminal System Southwest Terminal Project.

The airport deal involves the construction of a new passenger terminal, renovation of existing terminal, operation and maintenance of both the new and the existing passenger terminals during the entire concession period, and relocation of Philippine Air Force facilities.

Spain eyes PHL as next investment hub in Asia

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Category: Economy

24 Mar 2014

 

Written by Catherine N. Pillas

Spain is now looking to the Philippines as the best hub to establish its presence in Asia in preparation for the Asean Economic Community in 2015, and cited infrastructure as a viable area of investment.

“I think the Philippines is the best hub we can think of to introduce our companies and our economy in Asia, and I hope that we can find good partners to start business in this part of the world,” said Spanish Minister for Foreign Affairs and Cooperation Jose Manuel Garcia-Margallo at the Makati Business Club (MBC) General Membership Meeting at the Mandarin Oriental Hotel.

This message comes at the heels of the economic recovery of Spain, which, according to Margallo, was among the European countries hardest hit by the global financial crisis.

Among the blows that the Spanish economy has experienced are a dramatic fall of its gross domestic product, high public deficit and a growing public debt.

However, with the significant fiscal reforms undertaken by the country in the past years, Spain is now changing its model based on enhanced competitiveness, productivity and export-driven, Margallo said.

Gross domestic product growth and employment rates are improving, as well as public deficit, Margallo reported and is looking to Asia, the Philippines, in particular, to be the next investment hub.

“That is why this important Spanish business delegation is here, to explore and take advantage of all the things that the Philippines may offer to Spain,” he said. 

Peter Angelo V. Perfecto, executive director of the MBC, revealed that with the Asean economic integration in 2015, Spain is looking to the Philippines as a possible hub from which Spanish economic presence can take hold in the rest of Asia.

Perfecto added that the 25-member Spanish business delegation presently in the Philippines will undertake meetings with Philippine companies, led by the Ayala Group.

 The MBC official added in a chance interview after the forum that the Spanish delegation is eyeing infrastructure development, in particular, as 37 percent of the whole transport infrastructure in the world is managed by Spanish companies. 

“We are exploring possibilities in many areas, but since the Philippines is aiming to have good infrastructure in order to attract investments to the country, infrastructure is one area that Spanish companies are especially qualified in,” said another Spanish trade official during the open forum.

Socioeconomic Planning Secretary Arsenio M. Balisacan, who also attended the forum, welcomed Spain’s interest in infrastructure development and additionally called attention to tourism, agribusiness and  industrial manufacturing as ripe opportunities for Spanish businessmen.

The Spanish firms making rounds with their Philippine counterparts are engaged in various sectors but are mostly in infrastructure and tourism.

To solidify the commitment between Spain and the Philippines in developing business relations for both sides, a memorandum of agreement was signed on Monday between two business groups in Spain—the High Council of Chambers of Commerce, Industry and Navigation of Spain, and the Confederation of Employers and Industries of Spain—and the Makati Business Club.

According to data from the Department of Trade and Industry, bilateral trade between Spain and the Philippines grew by 19 percent from 2010 to 2012, or from $304 million to $362 million, and is the Philippines’s seventh-largest trading partner in Europe.

Bilateral trade between the two countries as of the first semester of 2013 is valued at $225 million.

In terms of tourism, 17,000 Spaniards have visited the Philippines in 2013, up by 7.7 percent from 2012, according to Department of Tourism statistics, while Filipino visitors to Spain were pegged at 50,000 in 2013.

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In Photo: President Aquino welcomes Spanish Minister of Foreign Affairs Jose Manuel Garcia-Margallo during the courtesy call at the Music Room of Malacañang on Monday. Spain is one of the biggest donors to the rescue-and-rehabilitation efforts in areas hard hit by Supertyphoon Yolanda. Spain is also eyeing the Philippines as the next investment hub in Asia with Asia Economic Integration in 2015. (Malacanang Photo Bureau)

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Property development tops Davao region investment jump

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Category: Economy

25 Mar 2014

 

Written by Manuel T. Cayon / Mindanao Bureau Chief

DAVAO CITY—Subdivision and condominium constructions topped the list of projects in the Davao region, where investments jumped sixfold in the last two years, the Department of Trade and Industry (DTI) office here said.

Eight property development projects, including two hotels, were registered with the Board of Investments (BOI) in 2012, and four the following year, DTI Director Ma. Belenda Ambi told a biweekly business forum here.

There were no amounts indicated for each project though per BOI policy on disclosure to the media, but Ambi said the BOI list shows that all BOI-listed investments in 2012 reached P5 billion, and increased by 620 percent to P31 billion the following year.

Only two midrise hotels opted to register with the BOI, that entitled them to government fiscal incentives. Ambi said the other new hotels, as well as other big investments, chose to go directly to the regular regulatory and documentary requirements of the local governments, to the other agencies like the Department of Tourism. The other property development projects were under the category of low-cost mass housing, but many were about construction of middle-class condominiums than subdivisions. There were a total of 31 investments, with power generation, light manufacturing and one coal-mining operation contributing to big-ticket ventures in the region.

 The Aboitiz-owned Hedcor companies developed two small hydroelectric generation projects in Barangay Tudaya, Santa Cruz town of Davao del Sur, totaling 13.6 megawatts (MW). The bigger new power generation within  the period was the two coal-fired power plants totaling 300 MW in Malita town, in the newly created Davao Occidental province, formerly the southern part of Davao del Sur.

Light manufacturing was accounted for by leather-goods production here, a kitchen-system production in Digos City, Davao del Sur, and a production of coconut-water concentrate in Santa Cruz, also in Davao del Sur.

Most of other projects were in agriculture and agribusiness.  Ambi said this  was due to the agricultural nature of the region.

Vista Land gets ‘AAA’ credit rating from CRISP

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Category: Top News

19 Mar 2014

 

Written by VG Cabuag

Property developer Vista Land & Lifescapes Inc. has received the highest credit rating from Credit Rating and Investors Services Philippines Inc. (CRISP) with “AAA” issuer rating with a stable outlook.

CRISP said the Villar-controlled company currently leads in the low-cost and affordable-housing market, and lauded it for its “excellent financial performance, strong management team and a successful operating model.”

Vista Land leads all property developers in the country in the low-cost and affordable- housing market segments.  The company has built more than 250,000 houses in 34 provinces, 73 cities and towns throughout the country.

“[Vista Land] has an operating model that can successfully replicate large-scale housing-community projects in its large land-banked properties widely spread throughout the country,” the ratings firm said.

It also cited Vista Land’s “excellent financial performance” in the last five years, in which it recorded a 22-percent average net-income growth. 

During that five-year period, Vista Land’s earnings before interest, depreciation and amortization margins averaged 36 percent, while its gross margins averaged 51 percent.

Vista Land reported a 15-percent increase in its net income last year as a result of its double-digit growth in sales after it completed and turned over more of its projects to its owners.

The company said in its report that its net income for the whole of 2013 reached P5.06 billion; the year before, it registered P4.38 billion in profits. Revenues from real-estate sales grew to P20.02 billion, a 23-percent increase from the previous year’s due to the increase in its overall completion rate of sold inventories, mainly of its horizontal developments, led by Communities Philippines and Crown Asia and high-rise developer Vista Residences.  The company uses a percentage of completion method in which it will recognize revenues according to the stages of development, of the pieces of property.  The real-estate revenue of Communities Philippines increased by 59 percent to P9.35 billion from the previous year’s P5.87 billion.  “This increase was principally attributable to the increase in the number of homes outside Mega Manila completed or under construction in the low-cost and affordable housing segment,” the company said. For Project Inquiry contact Vistaland at 09173236123.

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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