FACTBOX: Philippine property projects on the rise
Sat, Apr 12 20:38 PM EDT

MANILA (Reuters) – Philippine property firms have seen residential sales from Filipinos based overseas, especially in the United States, slide as the U.S. economy slows.

But companies continue to invest heavily in new housing and tourism projects as local demand takes up the slack.

The following are some of the new upscale residential and hotel projects in the country’s main financial centre, Makati City in Manila, and the adjacent Bonifacio Global City business district:

MAKATI FINANCIAL CENTRE

– Discovery Primea: A 60-storey service apartment and luxury residential condominium project to be built by JTKC Land on Ayala Avenue, at the heart of Makati City. The company owns the Discovery chain of hotels in the Philippines.

– One Central residential condominium project by Megaworld Corp (MEG.PS). The 50-storey tower will have 749 units selling at an average of around 106,000 pesos ($2,548) per square meter, Megaworld’s priciest offering. The company started pre-selling of the project, valued at 5.5 billion pesos, in the first quarter of this year.

– Greenbelt Chancellor: A 34-storey apartment building by Megaworld in the Greenbelt commercial area. The company has sold 93 percent of the project, which involves 328 units. The project, launched in the first quarter last year, is expected to be completed in late 2010 and is priced at an average of close to 96,000 pesos per sqm.

– Greenbelt Excelsior: A 34-storey apartment building by Megaworld. The project, with 325 units, is already 54 percent sold and is expected to be completed in late 2011. Average price of the units is close to 98,000 pesos per sqm.

– KHI Manila Property Inc: A joint venture between Ayala Land Inc (ALI.PS) and Kingdom Hotel Investments of Dubai, plans to spend $153 million in a luxury hotel and private residence complex near the Glorietta commercial area.

The project is composed of a 300-room deluxe hotel to be operated by Fairmont Hotels as well as a boutique hotel and 189 rooms of private residence to be operated by the Raffles group.

– Gramercy Residences: A 65-storey apartment to be built by Century Properties for 5 billion pesos near a major artery.

– The Grand Midori Makati of Federal Land Orix Corp: A joint venture between the Metropolitan Bank (MBT.PS) group of George Ty and Japan’s Orix Corp. The 4-billion-peso project features two towers with 500 units. Construction will begin in 2009 and end by 2011.

– Senta by Ayala Land: An upper-income residential condominium project with 442 units in one tower. The project will break ground next year.

($1=41.81 pesos)

(Reporting by Rosemarie Francisco)
Source: http://www.reuters.com/article/idUSGOR30227720080413

Interesting to note that for residential projects, mention was made only of four developers: Ayala, Megaworld, Century Properties, and Federal Land.

Among those left out were Eton, the Lucio Tan group, with at least three projects in Makati set for turnover in 2011– Eton Greenbelt Residences, Eton Parkview, and Belton Place — and the Britanny group, which has two projects also in Greenbelt (Mosaic).

I got the impression that in this issue, the developers belonged to the enemy camp. Being exposed to real estate at a young age, my natural reaction was defensive: developers actually contribute a lot to growth and business in this country! My dad, on several occasions, has told me that here in the Philippines, it’s the private sector that often initiates development. Government won’t go out of its way to single out a piece of rawland, build roads and provisions for utilities, and then invite private groups to “develop” it for public consumption (ex. transform it into a business or residential district). It works the other way around. Add to that the red tape and bad business practices that are sure to turn off any lukewarm investor. Bottomline, you have to hand it to developers, or to some of them at least.

I remember when I first heard about Ayala land’s Nuvali in Canlubang, I was so floored by the (apparent) commitment the company had to responsible development. Told skeptical friends that it may be a given that not all sales pitches and plans of preselling projects are admirable (read: it’s still first and foremost a business, which I personally don’t see as necessarily a bad thing) or that most plans don’t actually pan out…but if there’s any company you can trust to stay true to their word, it’s Ayala.

Note: Parts of this post also appear on “Agrarian Reform” (April 2, 2008)

Been attending project briefings for Ayalaland’s Nuvali project in Canlubang, and WOW, must say I’m amazed. This planned city, whose main access road is already visible from the Sta. Rosa-Tagaytay road, will usher in a whole new era for our children and their children: ultra-modern with a spotlight on communal living and respect for the environment.

To say that this project is exciting is an understatement! Imagine a 21st century, “wired” community that is green by design — bike paths and pedestrian walkways all around, with easily accessible nature and water parks and energy-saving facilities. Add that it’s self-sustaining, with business centers and schools within a short distance from residential neighborhoods. It will espouse precisely the epitome of the modern lifestyle: progressive yet responsible.

The magic word is sustainability, offered by Nuvali in 3 fronts:

• Environment

Land will be divided into open spaces and low-mid density developments, using LEED-compliant buildings and infrastructure, including parks, lakes and even sewage systems (ex. bio-swales or vegetated canals). Note that Leadership in Energy and Environmental Design (LEED) Green Building Rating System™ is the International Organization for Standardization (ISO) equivalent for engineering and construction design.

Focus will be given to water conservation and reuse and waste management. Ayala has also partnered with WWF for help in eco-footprinting and GINI measurement, as well as in achieving a target of zero carbon emissions.

• Economy

Envisioned is a PEZA-accredited business and technology campus, with a retail center, business district, and social institutions like churches, schools, and hospitals. Connectivity will be provided by private transit systems, modern utilities (WIFI, WIMAX), and a revolutionary “green” work environment using alternative energy sources and eco-friendly structures such as green roofs.

• Social

With community-building as a key priority, gathering places like open parks, as well as civic and cultural activities will abound. There will be a range of housing options, with offerings from AyalaLand Premier (Abrio), CII (Treveia), and Avida (Avida Estates).

The project is seen to bring increased employment in the CALABARZON area and educational assistance to locals through Xavier school, which has already committed to 25% scholar enrollees. Also tapped as a partner is GILAS to help improve the area’s internet connectivity.

Nuvali is an ambitious undertaking that will take years of concerted effort to fully develop (it took the Makati Central Business District, built in the 1960s, over 40 years to grow into what it is today). The project buzz has just begun; best not to get left behind.

Call or email us for more information or updates, we’d love to hear from you.

Related post: Green Grass of Home.
Click here for project summary.

Based on our observation and experience, the realty business is somewhat slow in the last few years, particularly in general brokerage. Our earlier specialization was industrial and factory lots, but this market has declined since the 1997 Asian crisis, and has not yet recovered to date. With regard to other types of property, many banks disposed of their foreclosed properties at low prices, and for easy terms, and so this has somewhat dampened the pricing and competitiveness of private property sellers who naturally want the best pricing for their properties. There is of course the problem with our local politics which the leaders have messed up, and this is aggravating the poor market condition.

On the developer side, however, there seems to be a bright horizon because most of the developers are positioning themselves in special market niches, such as condominiums and out-of-town residential and leisure enclaves, not only for the local market but especially for overseas buyers. Developers no longer buy their rawland needs. They are mainly negotiating joint ventures with the land owners.

As part of the marketig effort of developers, there is a lot of advertising and promotions seeking to sell to the overseas market. It seems that the increasing dollar remittances to the Philippines have encouraged the pre-selling of condominiums to foreign-based buyers.

Another bright spot on the horizon is the upsurge in the tourism industry, where new hotels have started building, particularly in Boracay, Cebu, Bohol, and Palawan. There are also positive developments in planning new airports. Realtors and brokers are hoping that tourism will help improve market conditions for real estate in the near future.

Many are attracted to “lease-to-own” arrangements, because of the benefit of spreading out payments while already enjoying full use of the property. What a lot of people don’t realize is that in principle, the said arrangement can be applied to any titled property, provided one has enough ready cash to serve as “downpayment” or equity and is of good credit standing.

Ask yourself:

How much money do I have on hand?

• Banks will not shoulder 100% of the cost of a property, and will usually give you a loan for 60-70% of the total appraised value. This means that you will need to provide for a part of the cost, which will be called your equity (you can also think of it as a downpayment).
• As long as you can provide at least 30% of the total value of the property you wish to purchase, you can avail of a bank loan, using the property itself as collateral.

How much can I set aside for monthly payments?

• The term or period of mortgage is flexible, and can be adjusted to suit your budget for monthly payments.

Financing your dream home need not be complicated. We can assist you in finding a suitable bank, as well as help you prepare the necessary documentation for your mortgage needs.