Real Estate, Mortgage, and Housing Industry [Archive]

-TC-

May 7th, 2007, 08:54 PM

Real Estate on the Rise By Cielito Habito
Inquirer
Last updated 05:47pm (Mla time) 05/06/2007

http://business.inquirer.net/money/columns/view_article.php?article_id=64401

MANILA, Philippines -- UNTIL early last year, communications, particularly telecommunications services, was the single fastest-growing industry within the services sector. In my economic briefings, I liked to say that the Filipinos' love affair with text messaging was driving the Philippine economy, and that wasn't too much of an exaggeration then.

New leader

Well, not anymore. In the past three quarters, growth in communications had slowed down to single-digit levels, after enjoying rapid double-digit growth over much of the past decade. Whether this is a long term trend is too early to tell, but at the moment, real estate and property development has dislodged communications as the growth leader in the services sector.

In the fourth quarter of last year, the real property sector posted a hefty 22.7-percent growth in real terms--now the highest-growing sub-sector within services. In the quarter previous to that, the growth rate was 26.2 percent. Against an average real growth rate of 16 percent in 2004 and 2005, real estate growth appears to be picking up lately. It has come to a point that renewed worries are now being heard that a real property bubble similar to what led to the 1997 Asian financial crisis may be looming.

A notable indicator is the recent upsurge in real property loans being granted by the Philippine banking system. Ten years ago, the Bangko Sentral ng Pilipinas (BSP) saw it fit to impose limits on the real property lending of banks. Is it time to revisit those limits again?

BPO-driven

What is driving the recent growth in the real estate sector? There is much casual evidence pointing to the surge in office space demands from the call center industry, and from the business process outsourcing (BPO) sector in general, as a primary source of the growth. Indeed, non-factor services exports, which prominently include BPOs, grew by a whopping 36 percent last year.

We hear of the tight office space market in the Ortigas and Makati areas, for example, where call centers and other BPOs are snapping up office spaces faster than they can be built. And this is an industry that is not confined to Metro Manila, either. Major centers around the country are seeing a similar boom in these types of businesses, that include backroom accounting, medical and legal transcription, graphic and architectural design, animation, research and a number of others.

There is an interesting sidelight here: the "research" part of it includes the not-so-honest business of made-to-order term papers and thesis manuscripts for lazy students overseas--a business, I hear from a friend who is actually into it, that has a large and growing market. For decades, this "cottage industry" for manufactured or recycled research papers had been known to students to be thriving in the Claro M. Recto Avenue area in Manila. Guess what: the industry has now gone global--thanks to Internet search engines like Google and Yahoo! coupled with computer cut-and-paste technology, which make it very easy to come up with a credible term paper in whatever subject you can think of, within minutes.

Housing demand

Adding to the BPO office space demand is the persistent unmet demand for housing, especially in the low- to medium-income segment. While the market for high-end condominium housing units appears to have tapered, growing numbers of Filipino families are in need of homes. The demand from OFW families is particularly on the rise, with anecdotal evidence pointing to a growing portion of remittances now going into housing investments. Property developers are taking heed, including those that traditionally focused on the higher end of the market. The big names in the industry have increasingly gone into housing development projects targeted at this rapidly growing market segment.

Helping this trend is the current environment of low interest rates, which has made housing finance much more accessible than before. For this we have the improved government fiscal situation and surging money supplies worldwide to thank. Banks no longer see it as attractive to lend to the government as before, via investments in government securities and treasury bills whose yields are now much lower.

No bubble

At the same time, demand for bank loans from the traditional corporate borrowers has slowed down, with deepening capital markets and expanded financing options. Thus, the banks have turned to consumer financing in a big way--including home and auto financing--which is good news to the housing industry. Adding to all this is the growing demand for property development from the retirement estate industry, spurred by aging populations in rich countries. And then there are the shopping malls sprouting out all over, thanks again in large part to consumer purchasing power fueled by OFW money.

All these tell me that the recent surge in real estate development is not quite the same as the bubble that led to the 1997 collapse. It appears that brisk growth in the sector could be around for a while--and this is good news for the Philippine economy.

-TC-

May 7th, 2007, 09:03 PM

An older article...

Central Bank Allays Fears of a Repeat of ’97 Crisis
Real demand, not speculation, fuels property boom
By Michelle Remo
Inquirer
Last updated 03:31am (Mla time) 04/28/2007

http://business.inquirer.net/money/topstories/view_article.php?article_id=62959

MANILA, Philippines -- The central bank, Bangko Sentral ng Pilipinas (BSP), is allaying fears that the current real estate boom could be a prelude to another financial crisis similar to that experienced in 1997 by Southeast Asian countries, including the Philippines.

BSP Governor Amando Tetangco Jr. told reporters: “If one looks at the real property market now, the increase in lending to the sector is driven by actual demand. It is different from what happened in 1997, when the increase in property prices was due to speculative activities.”

Tetangco said that in 1997 many people were driven into buying real estate to make profits, on speculation that prices would go up.

The late-1990s drop in real estate prices led to losses by banks with heavy exposure in the property sector. The resulting weak demand for real estate left banks with large non-performing assets.

In today’s case, Tetangco said, the increase in demand for real estate is largely due to demand among families of overseas Filipino workers (OFWs).

“Their first priority is education of their children, and then investment in properties,” he noted. “The OFW market is now a major market as far as developers are concerned.”

The BSP earlier reported that the thrift banking industry’s investment and loan exposure in the real estate sector grew 26 percent to P76.06 billion at end-December 2006 from a year earlier.

Bankers say low interest rates encourage individuals and corporations alike to buy real estate for personal use or business expansion.

Corporations that have waited on the sidelines for the right time to expand have started pursuing their plans to take advantage of the record-low interest rates, bankers say.

-TC-

May 7th, 2007, 09:09 PM

And another...

OFW Remittances, BPO Sector and Local Developments Sustain Real Estate Boom
Karla A. Vizcarra
Mar 21, 2007
http://www.philippinenews.com/news/view_article.html?article_id=0edc24ebdb804397f9dfe29c379a89ce

MANILA — Developers continue to capitalize on the country’s upward trends in the real estate sector, as Philippine political, economic and social factors remain favorable, approximating a boom not seen since the 1997 Asian Crisis.

For the period of January to November 2006, selling licenses approved by the Housing and Land Regulatory Board (HLURB) registered a 25% increase to 343,758 units from 274,230 units submitted by developers in the same period last year as various property segments posted growth. Registration was strongest in the third quarter with 133,341 units lodged with the HLURB – up by nearly 100% from 2006. Units referred to are either residential and/or commercial.

Colliers International Philippines reports a drop in vacancy rates of residential condominium units in the Makati CBD from 10% in the last quarter of 2006 to 8.1% in January of this year. Rents in the area are up by nearly 54% from its lowest point in 2003.

Colliers predicts rents to approximate pre-1997 crisis levels by the end of this year.

Senate President Manny Villar, dubbed “the dean of the (Philippine) real estate industry,” himself declared in an October 2006 article, “We are now in a real-estate boom. I’m very bullish that this time, it will be stronger and longer-lasting than the one we enjoyed in the nineties.”

Various developers pertain to the boom-and-bust cycle as indicative of trend longevity. National Real Estate Association President Alejandro Manalac estimates this current cycle’s head to have come up near the end of 2002, after a slump that lasted from 1997 to early 2002.

“I’ve seen 2 cycles,” Manalac said. “But the market is subjective. From the vantage point of the developers, industry was down from 1997 to 2002. But this was the time when the dollar surged from P26.50 (in 1997) to P56. So as the dollar got stronger, so did low cost housing developments. OFWs suddenly found themselves easily paying cash for house and lots. For them, those were the heydays.”

The OFW market has since matured into a driving force of Philippine economy, accounting for a substantial portion of the current boom.

Rockwell Land’s Vice President of Business Development Ninalyn Cordero asserted how launching the Manansala residential towers in the U.S. paid off debts incurred in the ‘97 crisis. She placed Rockwell’s latest buyers at a 50-50 ratio: 50 % overseas buyer, 50% local market. “The pick-up is due to other factors as well. Our political situation is quite stable. The Filipinos finally realized that there’s no better alternative. On the economic side, interest rates are at an all-time low. Money has never been this cheap.” She said.

November 2006 data from the Bangko Sentral ng Pilipinas (BSP) show that loans extended by commercial banks to the real estate sector had risen 5.6% in the second quarter of 2006, from the 0.6% drop posted the previous year

“Now we’re talking about 8-9 % interest rates for long term money. There is a lot of market liquidity. The banks have addressed their non-performing assets. It’s all these things coming into play.” Ms. Cordero noted.

New San Jose Builders, a property development group since the 1980’s, has recently veered from contracting government projects for Pag-Ibig members to building affordable condominium units. VP for International Sales & Marketing Cristia Bonifacio-Lin declared their sales reached the P1B mark last December, 35 to 50% of which is credited to OFWs. “The trend of buying is all based in the culture of ownership, the Filipino value of securing the family.” She said.

The BPO sector is an equally aggressive player in real estate, plunging CBD vacancy rates down to 4% from the previous quarter’s 5%, as reported by Colliers.

Office space absorption in the area was recorded at 93,660 square meters – up by nearly 15% from 81,829 square meters in 2005. Vacancy rates are predicted to drop further to less than 3% by the end of 2007.

As industry leaders anticipate the biggest property boom for the Philippines in nearly three decades, some groups like United Nations Economic and Social Commission for Asia and the Pacific warn a possible repeat of the financial crisis that beset the region 10 years ago. With most units slated for completion in the next year, property consultants and researchers are looking at a slowdown in residential sales. Others fear the ballooning and eventual bursting of an asset bubble, caused by the ongoing supply of residential and commercial space. Asset bubble refers to inflated asset value or the price of stocks or property increasing at an unwarranted pace. Still others talk of possible market saturation.

Mr. Manalac said that today’s conditions are very different from the previous cycles. “Then we were only depending on the domestic market, made up of local Chinese businessmen. It was a fixed market with a lot of players: big, small and sometimes unscrupulous. When the smoke cleared after the crash, only the big boys were left standing. Now, there are fewer players, but they are bigger and more credible. There are more quality projects too, not just stand alone ones. Now we have community, concept and lifestyle projects.”

Along with a growing retirees market, he cited the strength of local spending power and developments on the local front. “If you look at it closely, we have to give credit to what’s happening in the Philippines--- places like Greenbelt, the Fort, and Ortigas. Because even if you have that huge foreign market abroad, if there’s no attraction to come here, why will invest?”

Ms. Cordero acknowledged some other cyclical concerns, stating that the industry may be on its 4th or 5th year. “Usually it’s in the range of five to ten years, although there are more investments coming in now, which strongly indicate a longer trend. A lot of developers have learned from the crisis, they had their pains, I think they will be more deliberate and cautious. Barring any political downturns, we should be okay.”

There are now 400 developers registered with the HLURB within the Quezon City area; 188 in Manila and 190 in Makati as of 2004.

-TC-

May 7th, 2007, 09:34 PM

As an intro to this new thread I created…

We’ve read so much about the real estate boom in the Philippines… it’s all over the papers and the news. We’re witnessing it first hand with all the construction going on around us. We’ve fed into it by buying our own houses/condos in the past few months or years. Even by simply getting our very own Philippine subforum in SSC with several new u/c threads being started is a fine testament to this happy development for all of us and our country. It’s all good.

So without spoiling the party (I don't mean to), I hope to find some honest answers from all of you to the questions below:

1) How has the Philippines and the average Filipino taken advantage of this boom?
2) How many years more will this last?
3) Are you prepared for the eventuality that this cycle will end a few or more years from now? What will you do then?

You may add more questions so we can have a free-flowing intelligent (not emotional ha :D) discussion here. Thanks.

Retro

May 10th, 2007, 12:19 PM

As an intro to this new thread I created…

1) How has the Philippines and the average Filipino taken advantage of this boom?
2) How many years more will this last?
3) Are you prepared for the eventuality that this cycle will end a few or more years from now? What will you do then?

Hi,

Your posting is so appealing not to reply.. here's my comment.

I say the development of outsourcing business has a big factor in building up the real estate industry again. Its the main catalyst why investor & bank got interest on it. My estimate this would last around 3-5 years time starting 2 years ago and once the BPO available space is filled up this will would somehow flatten real estate demand.

On the other hand the volume of OFW investment in purchasing new home came a big factor also in continuing the real estate boom. According to what I've heard there are two types of OFW investing in new property. The first one are OFW concentrated in Middle East w/c normally prefer house & lot while the 2nd one are OFW outside Middle East such as North America, Europe. This 2nd type prefer condo investment.

The 3rd possible factor that help in pushing up the demand are those baby boomer FilAm that would be coming back to Philippines for their retirement. However, at the moment this group might be tricky to consider since the property in the State is somehow getting competitive enough for them due to downturn of real estate business in US. Meaning more home & property are being sell below the standard market price.

At the moment the continued stability of banking interest rate some how help both the developer and local buyer in such away the cost of building material and monthly amortization more stable and affordable for local buyer.

Well I hope that this industry should take a more conservative approach not to overcook everything by charging to high as to what they sell so that the momentum could still continue.

queetz@home

May 10th, 2007, 12:29 PM

-TC-

May 17th, 2007, 08:08 PM

http://www.philstar.com/index.php?p=49&type=2&sec=27&aid=2776

OFW Remittances Drive Growth of Property Sector
By Des Ferriols

Friday, May 18, 2007

Monetary officials said demand from overseas Filipino workers (OFWs) is driving the growth in the property sector.

Despite the growing nervousness elsewhere in the region, the Bangko Sentral ng Pilipinas (BSP) said the country’s property boom is largely financed by OFW money and is therefore more stable and sustainable.

BSP Governor Amando M. Tetangco Jr. said unlike in 1997 when people were buying up property with the intention to sell, this boom is being fueled by the housing sector as OFW families acquire residential properties for their own use.

“The OFW market is driving a significant portion of the property sector right now,” Tetangco said.

“OFWs do not borrow from banks, they finance their acquisition with their own income.”

As a result, Tetangco said the growth in lending to the housing sector has not been as fast as the growth in the sector itself, with the real estate exposure of banks growing only moderately.

“This is what differentiates this growth from the pre-1997 period,” he said.

In terms of lending, Tetangco said property developers and related industries often borrow from banks to finance their activities but since the end-market was a self-financed and steady market, the basis for expansion was more stable.

“It’s understandable to be somewhat nervous but the situation this time is qualitatively different,” he said.

The BSP had earlier said there were no indications that the current boom in the property sector was a bubble that could burst, saying that current levels were far from the point where they could lead to another financial crisis.

The fresh surge in the property sector had created initial worries that asset prices are leading towards an asset bubble that should be monitored and even stabilized by monetary officials

According to Tetangco the idea has been floated in the international financial community that monetary officials should start monitoring asset prices and considering their levels when setting monetary policies.

Tetangco said the BSP has conducted its own study and determined that although stock prices and indices have recovered close to pre-1997 levels, there were no indications that this could create another problem similar to the aftermath of the Asian contagion.

“Asset prices become a concern only when they begin to affect inflationary expectations and create demand-side pressures as a result of wealth creation,” Tetangco said. “We are not even close to that point.”

According to Tetangco, BSP studies have indicated that although there was a build up in land values recently, the levels were still below pre-1997 levels and were driven by economic activity more than market exuberance.

Right now, the BSP said that although the market was approaching pre-1997 levels in property sales and lending, the current average land values were a long way from values at the onset of the Asian crisis.

Retro

May 18th, 2007, 02:07 AM

Wow, I say our fellow countrymen who is working abroad really our modern day heroes. Imagine even the property sector they are helping them to grow:banana:

-TC-

May 18th, 2007, 09:31 PM

Wow, I say our fellow countrymen who is working abroad really our modern day heroes. Imagine even the property sector they are helping them to grow:banana:

And don't forget to thank the BPO industry, tourists and possibly the retirees as well...

http://business.inquirer.net/money/breakingnews/view_article.php?article_id=66589

Retirees seen becoming another major economic force
By Doris Dumlao
Inquirer
Last updated 03:22am (Mla time) 05/18/2007

MANILA, Philippines -- The spending power of Filipino retirees is expected to expand by 4.4 percent annually in the next 10 years to reach $6.8 billion in 2015, aided by cash remitted by relatives working overseas, a regional study said.

Financial support for the elderly in the Philippines is dependent on extended family units, as social security coverage remains small, Yuwa Hedrick-Wong, an economic adviser to Mastercard International, noted in a recent publication titled, “The Glittering Silver Market: The Rise of the Elderly Consumers in Asia.”

But the Filipino elderly are supported financially by the unique overseas Filipino worker (OFW) phenomenon, Hedrick-Wong said.

“The majority of these overseas workers leave behind their spouses and young children,” he noted. “In many instances, both parents work overseas, leaving the young children at home,” creating a situation in which the grandparents and sometimes the granduncles and grandaunts serve as surrogate parents for OFW children.

“And, for the elderly themselves, their role as surrogate parents enables the parents to seek work abroad. It may not be ideal, but in many ways this is a win-win situation for the elderly, the overseas workers and the children left behind,” Hedrick-Wong said.

As of 2005, the total spending power of retired empty nesters and retired old singles was estimated at $4.4 billion, the study said. The average spending power was about $1,350 per person for retired empty nesters and $1,230 for retired old singles, it said.

“The spending power is split quite evenly between the retired empty nesters (or those whose adult children have left their homes to live elsewhere) and the retired old singles, with the spending power of the former growing at a slightly higher annual rate of 4.8 percent, compared with 3.9 percent for the latter,” it added.

The study noted a wide discrepancy between the elderly in the rural and urban areas, with those based in Metro Manila being more dynamic.

Among the five discretionary expenditure items, spending on dining and entertainment was found to be the biggest in 2005, accounting for 60 percent of total. Shopping came in second, accounting for 26 percent. Purchases of vehicles, personal computers and mobile phones ranked third.

“The expected growth rates of these key discretionary expenditure items are very uneven in the next 10 years. Spending on travel and leisure activities is expected to grow the fastest at an average of over 10 percent a year,” Hedrick-Wong said.

Spending on shopping, on the other hand, was expected to grow the slowest at 0.9 percent per year.

“These five discretionary items will grow collectively at an average of 7.8 percent per year in the coming decade, bringing the total discretionary expenditure to almost $2 billion in 2015,” he said.

Across the region, Mastercard president for Asia-Pacific, Middle East and

Africa Andre Sekulic said, the lengthening of individual life expectancy would make the elderly a dynamic driver of the consumer market.

“The silver market of elderly consumers is set to glitter in Asia Pacific. The reward is expected to be great when businesses get it right,” Sekulic said.

In affluent Asia-Pacific countries and territories -- Japan, South Korea, Taiwan, Hong Kong, Singapore and Australia -- the total potential spending by the elderly households was estimated at $868 billion in 2005, and is expected to rise to $1.5 trillion in 2015.

In emerging Asia -- consisting of China, India, Thailand, Malaysia and the Philippines -- total spending of elderly households was estimated at $153 billion in 2005, and is projected to rise to $430 billion in 2015.

laquacherra

May 19th, 2007, 09:20 AM

queetz@home

May 19th, 2007, 10:49 AM

^^ Yeah, no kidding, eh? Who knows what happens at 2009 onwards so I hope no body causes trouble in the foreseeable future to cut the boom short...

-TC-

May 19th, 2007, 10:57 AM

considering that a majority of the projects that are currently in their preselling stage are expected to be completed in 2009/2010... let's all keep our fingers crossed and hope that this boom cycle will last a few more years

I'm just wondering... does anyone here have a list of the turnover dates of all the projects listed in our u/c thread? That'll be interesting to see.

jonno

May 19th, 2007, 11:02 AM

^^ Yeah, no kidding, eh? Who knows what happens at 2009 onwards so I hope no body causes trouble in the foreseeable future to cut the boom short...

Well the goods news is unlike in the past, none of the 2010 presidentiables are anti business who would likely resort to populist policies, this is of course assuming we don't shift to a parliamentary in which case we'll have a Prime Minister.

queetz@home

May 19th, 2007, 11:07 AM

That depends though. What if the GO senatoriables somehow manage to release Erap from jail, then he runs and win 2010? Or what if Jinggoy runs and wins? In this country, expect the unexpected, no matter how stupid that unexpected is...

To be honest, the thought of 2010 never came into mind until I saw Trillianes in the top 12. I realize that the counting isn't over yet but after seeing that TV Patrol news clip yesterday on what his intent is, the MERE thought of him winning, then causing chaos, is quite disturbing. :eek:

jonno

May 19th, 2007, 11:27 AM

^^ I agree and the key to a sustainable real estate boom is to not over do the hype. As a recent example, prior to the previous real estate bust, the hype of developers was to get into ultra high end. The success of the first buildings of the Rockwell Centre led other developers to go ultra high end, resulting in huge ambitions projects like Roxas Triangle, Essensa, Pacific Plaza, and so on. Developers built so much high end condo units, more than the market can take. Thus corrective action, reinforced by the Erap crisis, busted the high end real estate boom at that time. Although it has recovered somewhat, thanks in the large part to PGMA's positive economic reforms, the non-existence of Roxas Triangle Two is a testament of that dark era in Philippine Real Estate.

Right now, the hype is almost entirely on the OFWs. While the market for them is quite large and strong, developers will have to realize that OFWs are just as vunerable as anyone when it comes to economic shock. The strong Philippine peso is already a hurting factor, plus the complex real estate tax laws here (as per Taftrader's post in the Real Estate Taxes thread). A little sneeze in the US economy here, a little quarrel in the Middle East there, a hint of impeachment here, and the demand from OFWs can drop dramatically. So its best to not over price them to the point of unsustainability and also be price sensitive to the growing middle class of the local market as a potential source of buyers. Like in any product market, diversity is the key to sustainable success....

1)Erap crisis??? The last property boom in the Philippines I know was in 97 which was disrupted by the Asian Financial crisis thou not as severe as many other Asian economies.

2)The "sneeze" in the US economy that you're referring to is I think happening right now and as you could see does not really affect us since we have now more ties with Chinese, South Korean capital.

3)There will be no impeachment thou there may be a slight possibilty of a coup by those who would want to be as popular as Trillanes

4)I don't think we should regulate prices at all; let the market forces prevail. What we should do is have a stricter regulation in pre-sell; for example we could require all real estate companies to have the projects at least 30% complete before they pre-sell; this would not only offer more protection to buyers, it would also lessen unnecessary over supply.

5.)Yes diversity is very important, also we should amend our constitution and "open" our economy big time so instead of relying only on our OWF's, we'll have more investors. By the way, OFW remittances now are much bigger than 97, furthermore while the slump in the US property market could entice investors (because it's cheap there) it could also discourage them. Real estate prices in the Philippines is still a bargain esp. with signs of a much healthier economic growth. There is so much room for growth in the Philippines; one of the best places to put your money is here.

jonno

May 19th, 2007, 11:37 AM

queetz@home

May 19th, 2007, 12:15 PM

1)Erap crisis??? The last property boom in the Philippines I know was in 97 which was disrupted by the Asian Financial crisis thou not as severe as many other Asian economies.

2)The "sneeze" in the US economy that you're referring to is I think happening right now and as you could see does not really affect us since we have now more ties with Chinese, South Korean capital.

3)There will be no impeachment thou there may be a slight possibilty of a coup by those who would want to be as popular as Trillanes

4)I don't think we should regulate prices at all; let the market forces prevail. What we should do is have a stricter regulation in pre-sell; for example we could require all real estate companies to have the projects at least 30% complete before they pre-sell; this would not only offer more protection to buyers, it would also lessen unnecessary over supply.

5.)Yes diversity is very important, also we should amend our constitution and "open" our economy big time so instead of relying only on our OWF's, we'll have more investors. By the way, OFW remittances now are much bigger than 97, furthermore while the slump in the US property market could entice investors (because it's cheap there) it could also discourage them. Real estate prices in the Philippines is still a bargain esp. with signs of a much healthier economic growth. There is so much room for growth in the Philippines; one of the best places to put your money is here.

I never said anything about regulation but I think the marketing departments shouldn't over price condo units like crazy which seems to be happening nowadays. And this isn't just selling price but payment terms as well. Fortunately, some companies such as Megaworld do have excellent payment schemes that allow local buyers to participate but there are still a lot of developers that expect people to pay high five to six digit monthly payment schemes and yet their projects aren't THAT high end.

As for the ERAP crisis, yes the Philippines weren't affect as much, which is why its an ERAP crisis. The Philippines was practically shielded against the Asian crisis because of President Ramos's leadership and when the crisis was subsiding, only then did the Philippine real estate really collapsed! Note that PhilamLife Tower, for example, manage to be very profitable since that building has been pre-leased just before Erap came to power. Other projects, including the defunct Westmont Bank, World Commerce Plaza and Jaka Tower, weren't so fortunate.

Oh, and a coup can be as damaging, or even worse, than impeachment. Asia World went under because of the 1987 coup. God knows what will go under if Trillianes causes trouble. Kingdom Hotels? PSE moving to BGC (AGAIN!!!)?

As for reliance to the US economy, we do rely on it both in trade and in OFW remittances quite heavily. Those BPOs....where do you think they mostly cater to? All it takes is a shift in power in the US to favour protectionist agendas to kill the BPOs (i.e. those anti-outsourcing groups who think such jobs should remain in the US). The US elections in 2008 is something to watch out for very carefully.

jonno

May 19th, 2007, 01:02 PM

I never said anything about regulation but I think the marketing departments shouldn't over price condo units like crazy which seems to be happening nowadays. And this isn't just selling price but payment terms as well. Fortunately, some companies such as Megaworld do have excellent payment schemes that allow local buyers to participate but there are still a lot of developers that expect people to pay high five to six digit monthly payment schemes and yet their projects aren't THAT high end.

As for the ERAP crisis, yes the Philippines weren't affect as much, which is why its an ERAP crisis. The Philippines was practically shielded against the Asian crisis because of President Ramos's leadership and when the crisis was subsiding, only then did the Philippine real estate really collapsed! Note that PhilamLife Tower, for example, manage to be very profitable since that building has been pre-leased just before Erap came to power. Other projects, including the defunct Westmont Bank, World Commerce Plaza and Jaka Tower, weren't so fortunate.

Oh, and a coup can be as damaging, or even worse, than impeachment. Asia World went under because of the 1987 coup. God knows what will go under if Trillianes causes trouble. Kingdom Hotels? PSE moving to BGC (AGAIN!!!)?

As for reliance to the US economy, we do rely on it both in trade and in OFW remittances quite heavily. Those BPOs....where do you think they mostly cater to? All it takes is a shift in power in the US to favour protectionist agendas to kill the BPOs (i.e. those anti-outsourcing groups who think such jobs should remain in the US). The US elections in 2008 is something to watch out for very carefully.

Thanks, you made a lot of really good points there. A protectionist policy would indeed hurt our BPO industry big time. My instinct tells me (influenced by my political economy background in uni) protectionism if it does occur would come about in the form of trade blocks, say NAFTA for the US and their neighboring countries and of course EU for Europe but this would likely to happen only in the event of a major worlwide recession or depression. Yes, it's possible that a bit of protectionism could also happen after the 2008 elections in the US but I kind of doubt it since it's going to seriously affect the US' competitiveness but it's possible to varying extent.

Retro

May 20th, 2007, 05:58 PM

Looking at those information share in this forum, I would say that project that would finish beyond 2010 would be consider a buyers risk. If one doesnt chose the project and developer very well. Is there any protection we could have in case developer would be default in delivering and completing their project?

Retro

May 21st, 2007, 08:00 AM

http://globalnation.inquirer.net/news/news/view_article.php?article_id=67002
OFW remittances fueling growth in real estate

Boom seen lasting five years

By Daxim Lucas
Inquirer

Posted date: May 20, 2007

MANILA, Philippines -- UP TO A third of the record-high foreign remittances sent home by expatriate Filipino workers is spent on real estate, making the current property market boom more durable than previous episodes, according to industry players and market watchers.
In an interview, Century Properties managing director John Victor Antonio said his firm noticed this trend as early as two years ago when dollar remittances sent by overseas Filipino workers (OFWs) started to pick up.

"Our rule of thumb is that 30 percent of all remittances end up in spending for the real estate sector, whether it is used to buy or property or spent on housing improvement," he said.

More importantly, the trend marks a significant departure from the pattern established in previous decades where the bulk of OFW remittances was spent on consumer goods, with little left for savings and investments.

In 2006, OFWs sent back to their local beneficiaries $12.6 billion through the banking system alone. The central bank estimates that this amount is even understated by an average of 30 percent because of funds sent home through informal channels.

At the low end, this means that as much as $4.2 billion in OFW funds were spent on the real estate sector last year--a figure that will rise further, given the central bank's expectations of as much as $14 billion in remittances for 2007.

"OFWs are really the main factor driving up this market," said Antonio, whose firm has launched several projects aimed at this cash-rich sector. "In our case, at least 50 percent of our sales come from OFW [buyers]."

For other firms, this level could go to as high as 60 percent of all sales, he said.

The trend has not gone unnoticed.

Large and small real estate developers are now investing heavily in wooing expatriate Filipino buyers. These include property blue-chip Ayala Land Inc., Megaworld Corp. and Robinsons Land Corp.

These firms embark on periodic sales tours in Europe and the US aimed at attracting Filipino buyers, some even setting up permanent sales offices in areas with high concentration of potential clients.

Indeed, the latest data from the National Statistical Coordination Board revealed that the property sector had recorded the fastest growth rate among various monitored industries in recent months.

In the fourth quarter of 2006, for example, gross revenues of the real estate sector grew by 40 percent compared the same period in the previous year.

This marks the 15th consecutive quarter of double-digit growth for the sector since 2003

In contrast, the financial sector grew by only 17.3 percent, the trade sector by 12.3 percent and private services by 10.6 percent.

The manufacturing and the transportation and communication sector--the previous darling of the economy--grew by 8.5 percent and 8.4 percent, respectively.

According to Unicapital Securities analyst Ron Rodrigo, all these indicators point to a real estate boom that will last longer than the one experienced in the mid-1990s.

"This will last for some time," he said in an interview. "This could go [on] for another five to seven years."

He stressed, however, that the boom will be skewed in favor of firms which cater to the lower end of the property sector, in particular, those which invest heavily in affordable or mid-market developments.

"These are the properties that go from P500,000 to P1.5 million and from P1.5 million to P2.5 million or P3 million per unit," he said.

Rodrigo is confident that the present boom would sidestep the pitfalls of its 1990s version, mainly because present-day buyers acquire property for their actual use.

This contrasts with the white-hot speculation that contributed to the 1997 East Asian financial crisis, where buyers would acquire two or three units at a time as "investments" meant to be sold off at a better price.

Rodrigo said that strong market conditions are also supported by the profile of workers going abroad, many of whom are now highly paid professionals, compared to laborers and domestic helpers that were prevalent up to the late 1990s.

"Nowadays, you have high-earning professionals like nurses and information technology people who are highly valued by their employers abroad," he said. "As long as deployment numbers keep rising, this market will stay strong."

It is a fact that Century Properties' Antonio is counting on.

The firm will embark on an international roadshow in the next months for showcase its high-rise and subdivision projects to Filipinos abroad in the hopes of capturing a bigger slice of the pie.

"Up to 70 percent of all our online inquiries come from abroad," he said. "There are from overseas Filipinos with large investing capacities. They want to stretch the value of their dollar, so they buy properties here."

Despite the bullishness, Antonio keeps a close eye on indicators that may point to a repeat of the previous decade's property market crash.

"What we have now is different from 1997," he said, echoing Rodrigo's confidence.

Around the world, OFWs eager to buy homes are hoping they are right.

portludlow

May 22nd, 2007, 06:45 AM

Philippine Property Market Overview An in-depth Property Market Overview of the Philippines and the factors determining market growth and change.
by Colliers InternationalAdvertisement
http://www.property-report.com/apr_op_archives.php?id=77&date=7516
Executive Summary

Property Indicators: Back in the Investment Radar Screen

In the course of 2007, we expect land values to further increase by 10% as investment interest in prime development areas strengthen. It should be noted that investment interest appeared to be nil just 12 months ago. However, strong interest was seen in the last six months as evidenced by the following deals: Ayala Land - Kingdom Hotels, Ascendas-Net Group, Ayala Hotels-Ascott, Ayala Land-Capmark Asia-Goldman Sachs.
For the whole of 2006, licenses approved by the HLURB registered a 20% YoY increase
to 358,893 units from 298,002 units in 2005. Registration was particularly strong in the third quarter with 133,341 units lodged with the HLURB – accounting for nearly 40% of registrations last year.
Office: Relatively Cheap in the Region

Given the dearth of new supply in the CBD, developers with an ample landbank in Fort Bonifacio have been taking advantage. The Net Group has built nearly 30,000 square meters of useable space in two projects. The third instalment in the series has been pre-committed before topping off. Megaworld is also a dominant player with its 50-hectare McKinley Hills project. Approximately 60,000 square meters of useable space in four buildings are under construction and a further 145,000 square meters in ten buildings are planned.
CBD-wide vacancy further eased to 3.7% from the previous quarter’s 3.9%. Declines in the vacancy rates have been minimal as vacancy is now at 5% - a level wherein quarterly vacancy is merely structural in nature. End-2007 vacancy is expected at around 3% as demand for BPO space continues to drive the segment.
Rental levels are now approximating mid 1997 levels in peso terms. Take note, however, that rents remain at a 40% discount in US dollar terms. In fact, rents in Manila are at a 25% discount from Bangkok and Kuala Lumpur. Relative to Hong Kong and Singapore, Manila office space is only 16% of rents in these major cities.
The Premium Grade segment escalated by nearly 7% QoQ to an average of P908 per sq.m. per month. Expectations are for rents to further increase by nearly 20% in the course of 2007 to an average of P1,023 per sq.m. per month.
Office prices are up by nearly 6% in the first three months of the year. We believe that there will be more room for asset reflation this year given that yields could be compressed in light of increasing rents and declining key interest rates.
Residential: Mortgage Rates Falling to All-Time Low

Similar to the trend in the office segment, residential projects under construction are at a much higher quantum in Fort Bonifacio as compared to the CBD. In the next five years, 3,015 units are slated to complete in the Makati CBD while there are 8,593 units in Fort Bonifacio in the same period. In fact, Fort Bonifacio will only be 20% less than the stock of the CBD by the end of 2011.
Residential vacancy in the Makati CBD eased to 9.3% from 10% at the close of 2006. Expectations are for vacancies to further ease to 7% by the end of 2007 due to the easing supply pressure as Columns Tower 2 is the only project slated for completion during the year.
Rents for luxury 3-BR units in the Makati CBD escalated by nearly 4% QoQ to an average of P490 per sq.m. per month or P127,500 per unit. We expect rents to further escalate by 10% in 2007 to an average of P520 per sq.m. per month or P135,135 per unit. Residential lease rates are now approximately late 1996 levels.
Primary market pre-selling prices are now in excess of P95,000 per sq.m. In fact, high-end developments in the Greenbelt Ayala Center area are at the P100,000 per sq.m. mark.
The secondary market will be more active with the introduction of longer amortization period (up to 20 years) at fixed rates. Competition in the banking industry has spurred mortgage rates to fall to 5.5% per annum fixed for five years.
Retail: Seeing Signs of Election-Related Spending

The stock of retail space in Metro Manila remains at 4.33 million square meters. In the course of 2007, the stock is forecast to expand by 7% with the addition of 310,350 square meters from five developments.
Effective rents in Ayala Center escalated by 1.4% QoQ to P1,200 per sq.m. per month. In the next 12 months, our forecast points to an expansion of 7%. We are anticipating that election- related spending will filter through effective rents.
Election-related spending is finally starting to be reflected in mall retail performance. Same-store sales in Ayala Center in 1Q07 were up by 1%. Likewise, retail sales improved by 2% YoY in the first three months of the year.
The Bangko Sentral ng Pilipinas has increased its forecast for OFW remittances this year to $14.74 billion - 5% higher than its previous forecast of $14 billion.

Economy

The Philippine economy’s performance is now at its best in ten years. GDP growth last year was at 5.4% with analysts expecting the 2007 performance at 6.0% to 6.5%. Private consumption has been critical to this performance as it accounts for more than 75% of the local economy. Lending support is the OFW remittance which was up by 18% in 2006 at $12.8 billion. The Bangko Sentral expects this to expand by 16% to $14.74 billion. As of February, remittance inflows grew by a robust 23% YoY to $2.2 billion.

Inflationary pressures have significantly eased. For the first three months, average inflation in the Philippines has been recorded at 2.9%. From the average of 6.2% in 2006, inflation has fallen to a
historical low of 2.2% in March 2007. While the Bangko Sentral forecasts inflation at 4% to 5% this year, analysts are expecting 2% to 3%.

Local yields have likewise eased to historical lows with the 91-day Treasury bill rate falling to a low of 2.86% in March. In effect, home mortgage rates have now gone down to as low as 5.5% per annum. The increased liquidity and low interest rate environment has led the resurgence in the stock market, which is now testing the 3,300 PHISIX level. Furthermore, there has been a marked increase in take-up for property. In fact, domestic cement consumption is up by 14% YoY in 1Q07 - the first time since 2001 that the industry witnessed annual volume growth.

Land Values
We have tempered our estimates for land value appreciation in the first quarter of the year. Values remain at the same level as end-2006. Developable land in the CBD stands at an average of P222,500 per sq.m. Accommodation value is roughly at P14,000 per developable sq.m. In the alternative business district of Ortigas, average land value is estimated at P107,500 per sq.m.

In the course of 2007, we expect land values to further increase by 10% as investment interest in prime development areas strengthen. It should be noted that investment interest appeared to be nil just 12 months ago. However, strong interest was seen in the last six months as evidenced by the following deals:

Ayala Land will jointly develop a 7,377-square meter property into a luxury hotel complex with Kingdom Hotel Investments. The project, which costs approximately US$153 million, will be composed of a 300-room Fairmont Hotel, a 30-suite Raffles Hotel, and 189-unit Raffles-branded private residences. KHI is a hospitality related equity company with partnership with hotel operators such as Four Seasons Hotels and Resorts, Fairmont Hotels and Resorts, Raffles Hotels and Resorts, and Movenpick Hotels and Resorts. It is owned by Prince Alwaleed bin Talal bin Abdulaziz Alsaud, who is a member of the Saudi Royal family.
Ascendas Pte, which manages Singapore´s biggest industrial property trust, bought five office buildings from the Net Group in the Fort Bonifacio area for S$225 million ($147 million) to add more assets to its portfolio. The remaining three towers are being built, and the development will include 122,500 sqm of space when completed.
Ayala Hotels, Inc. and joint venture partner Ocmador Philippines BV sold their respective 60% and 40% stake in Makati Property Ventures which owns the Oakwood Premier Ayala Center to Singapore-based Ascott Residence Trust for P2.7 billion (US$ 54 million).
Ayala Land is currently constructing Dela Rosa E-Services Building. The 24-storey building will rise on the 3,600-square meter property in the CBD and will have a floor plate of around 3,300 square meters. The project is being developed by the partnership of Ayala Land with the investment arm of Goldman Sachs and an affiliate of Capmark Asia. ALI owns a 36% stake in the said partnership.
License to Sell
For the whole of 2006, licenses approved by the HLURB registered a 20% YoY increase to 358,893 units from 298,002 units in 2005. Registration was particularly strong in the third quarter with 133,341 units lodged with the HLURB – accounting for nearly 40% of registrations last year. Sectoral highlights are:

Licenses approved for the socialized segment is up by 36% YoY to 61,699 units. Meanwhile, the low cost segment is down by more than 21% to 35,320 units as compared to 44,850 in the same period last year.
Mid income housing registration expanded by nearly 20% YoY to 67,203 units as mortgage rates continue to ease. The competitive environment in the banking industry has led to home mortgages falling to as low as 5.5% p.a. fixed for five years. Furthermore, numerous developers have launched new township projects south of Metro Manila.
The high-rise residential segment is up by 14% in 2006 as developers are now capitalizing on niche locations for mid-income condominiums. Aside from the Makati CBD, Ayala Land is involved in Fort Bonifacio and the San Lazaro re-development. Megaworld has Newport in Villamor, McKinley Hills in Fort Bonifacio, Araneta Center and Cityplace in Binondo. Robinsons Land is developing projects in Fort Bonifacio and Gateway in the Pioneer area. Rockwell will soon embark on the Meralco site in Ortigas. Century Properties will be masterplanning the old IS site in Makati.

Continue reading:http://www.property-report.com/apr_op_archives.php?id=77&date=7516

Source: www.colliers.com/philippines.

queetz@home

May 24th, 2007, 09:54 AM

http://www.abs-cbnnews.com/storypage.aspx?StoryId=78243

Philippine property market booming
TAKIN’ CARE OF BUSINESS
By BABE ROMUALDEZ

The Philippine Star

The Philippine property market continues to be on an upswing, a marked improvement since the Asian crisis that marked a downturn in the property market 10 years ago. There is heightened interest in development-related investments, and land values have gone up tremendously and are expected to further increase by as much as 10 percent. There is a great demand for condominium units and office spaces especially in the Makati area with rental rates now approximating that of mid-1997 levels.

In the next five years, more than 3,000 residential units are slated for completion in Makati’s central business district alone, while in Fort Bonifacio, there are 8,500 units expected for completion within the same five-year period. This development has been bolstered by bank interest rates going down to 5.5-percent fixed rates per annum – a record all-time low. Even the recent election seems to have contributed to the upswing. Likewise, the Bangko Sentral ng Pilipinas (BSP) has increased by five percent its previous forecast of overseas Filipino workers (OFW) remittances to $14.74 billion – which bodes well since there has been an upsurge in the demand for housing from OFWs.

Ayala Land has been one of the greatest recipients of this upswing since they just clinched a $152-million project with Kingdom Hotel investments for the development of two luxury hotels and residences along Makati Avenue. For the first quarter alone, Ayala Land reported a net income of P1.3 billion, with part of the earnings attributed to the sale of Oakwood to the Singapore-based Ascott group early this year. No wonder each time I bump into Jaime Zobel (JAZA), his grin gets wider.

Other top developers are also training their sight on eco-tourism and resort development projects, one of them taipan Henry Sy and his SM Investments group with their large-scale development project in Nasugbu, Batangas. Called Hamilo Coast, the 5,700-hectare property is being touted as the country’s largest ecotourism project. The SM investments group is obviously seeing a lot of growth potential in the property sector which is starting to recover from the 1997 Asian financial crisis.

Not to be outdone is Eton Properties, which seems to be one of the hottest property developers nowadays. Of course, Eton is perceived to be very reliable since it rides on the resources available to the company, with "El Kapitan" Lucio Tan behind it. People know Eton is a highly dependable group which will not run out of money and leave investors high and dry in the middle of the development. One balikbayan who has already given a reservation fee and down payment for a unit in one of Eton’s projects decided he wanted to take a look at other properties in the market – and so wanted his money back. Eton president Danny Ignacio readily returned the balikbayan’s money without any unnecessary fuss – which indicates just how solid and dependable the Eton group is.

Those who plan to go into the stock market should seriously consider putting their money into property stock issues. The conditions seem to be right, and all indicators point to the fact that it’s one sector that is undoubtedly back in the radar.

* * *

Sinjin P.

May 28th, 2007, 07:52 AM

Landlords rule property business (http://businessmirror.com.ph/05282007/economy03.html)
By Dennis D. Estopace
Reporter

WITH cheap land rates, a slowdown in US property market, and political stability relative to traditional tourist haven Thailand, those who own land in the Philippines are reaping it big, according to multinational property broker CB Richard Ellis.

“[The Philippine real estate sector is now a] landlord’s market from a tenant’s market for more than five years,” CBRE Philippines’s vice chairman Joey Radovan said Friday.

Radovan and the CBRE held a press briefing on what the company calls the “second phase of the Philippine property boom.”

Radovan said that diverting from the path that led to the real estate bubble burst of 1997, the current boom in the property sector is driven by landlords who are now more prudent.

“The buildings are built-on demand,” Radovan’s boss and CBRE chair Rick Santos added.

Santos added that the demand comes mainly from foreign property investors attracted by the low-cost packages offered by the country’s property market.

Since the first quarter of last year, Santos said, some 10 foreign property investors pumped and pledged $9.413 billion (P451.824 billion) into the local market, the latest in the first quarter of this year coming from Ascendas, Goldman Sachs, Capmark, Hanjin, and Kingdom Hotel’s property investment worth $2.706 billion.

But landlords and developers today are not building structures without signing precommitted deals from these future lessees, according to Radovan and Santos.

Before, landlords built high-end products with the assumption that there is a market and without a huge historical track record to back up that assumption, Santos said.

“It’s the opposite effect today,” Santos added, citing that landlords are now positioning the sale or lease of their properties based on trends in the market backed up with a historical record of the property glut savior: business process outsourcing.

“BPOs are the saving grace for the sector,” CBRE director Vic Asuncion said.

Whereas before, landlords or property owners held vacant space because of the property glut, “now they sign a contract.” They have wisened up, Asuncion added. This market relation is also seen by CBRE in the horizontal residential property sector.

Chay B. Ong, CBRE associate director for asset services, noted that across the industry more than 80 percent of the properties for sale are sold even before the groundbreaking. “This prompts developers to take the next logical step, which is to build more,” Ong said.

Ong added that money from abroad, especially overseas Filipino workers, remain the growth driver for this segment.

She expects the housing demand to come from the key regions of the country, namely, the National Capital Region, Central and Southern Luzon because most OFW remittances are channeled mostly in these areas.

-TC-

June 4th, 2007, 05:13 PM

http://www.colliers.com/Markets/Philippines/News/Real%20Growth%20On%20Real%20Investments

Real Growth On Real Investments
Business World - Special Feature
05/18/2007
by Gerard de la Peña

By this year, the Philippine real estate boom should be almost halfway through the cycle of growth that normally lasts between five to seven years. But at the rate business is going, the industry upswing could last longer than the projected period. Properties are hot buys more than ever - and they are red hot, for that matter. And this is rightfully so, as the local properties sector continues to provide sound investments.

True enough, construction sites dot key cities and prime resort areas, while shares of listed property developers remain top picks at the trading floor of the Philippine Stock Exchange. There is a plethora of properties to choose from, ranging from low-cost to prime condominium units, to themed enclaves and vacation homes atop the mountain or by the sea.

"We think this will be a longer growth period than the usual," Federal Land Inc. first vice-president Dennis D. Lim told BusinessWorld. "The past boom was fueled by speculative demand; but now there is real demand amid that growth."

It is indeed brisk business for real estate firms. The Housing and Land Use Regulatory Board (HLURB) has, in fact, registered a 20% year-on-year increase of approved licenses to 358,893 units from 298,002 in 2005.

Vertical development

Federal Land, for one, recently bared its P20-billion plan to transform its 25-hectare property in Fort Bonifacio in Taguig into a central business district. Megaworld Corporation, meanwhile, is set to commence construction of Greenbelt Chancellor in Makati City by the fourth quarter of the year after selling 40% of the total residential units. Rockwell Land Corp., on the other hand, promises to change the Makati skyline with Number One Rockwell, its last residential project in the Rockwell township.

"Most of the growth is happening in the vertical market. The horizontal market is growing but not as fast as the vertical market," said Mr. Lim.

The real estate industry is receiving a boost from the dollar-rich overseas Filipino worker (OFW) market, and the influx of business process outsourcing (BPO) investments in the country.

"The BPO office market continues its phenomenal growth trajectory as office market remains tight," said Megaworld executive director Kingson Sian.

Property consultancy firm Colliers International (Philippines), Inc. listed several notable lease transactions as of the first quarter. These include BPO firms E-Telecare, ICT, and Accenture each leasing 6,000-square meter (sq. m) spaces at Annex @ Shaw in Ortigas Center; Astec leasing a 4,500- sq. m commercial space at 1800 Eastwood Avenue in Libis, Quezon City; Accenture occupying a 4,000-sq. m workspace at Cybergate 2 in Mandaluyong City; and GE Philippines renting 2,362-sq. m space at Net Cube in Fort Bonifacio.

Other commercial projects are also on the rise in Fort Bonifacio. According to Colliers International, The Net Group has built nearly 30,000 sq. m of useable space in two projects, with the third installment in the series having been pre-committed before topping off. Megaworld, for another, is currently constructing four buildings with 60,000 sq. m of useable space, while 10 buildings, which make a total of 145,000 sq.m of commercial space, are in the pipeline.

Perking up business

Aside from a host of new developments, the first quarter also saw the entry of new industry players, most prominent of which is Lucio Tan group's Eton Properties Philippines, Inc., which is slated to start construction of The Eton Residences Greenbelt in Makati City and Eton IT Center (EIC) in Ortigas Center, Pasig City. Eton has earmarked P10 billion for these and five other projects.

"What triggered our decision to build EIC is that the locator was the one who approached us and expressed interest even before we started (discussing) what to do with that location. Given the interest, we have decided to start the construction of our first building in Ortigas. This would be the first of the many BPO buildings that we are coming up with, depending on the demand from BPO," Eton Properties President Danilo Ignacio said in a press conference.

The real estate industry upswing also helped perk up the loans business of banks, with Bangko Sentral ng Pilipinas posting a growth of 9.9% growth in loan activity in March, compared to the February's rate of 7.5%. Providing further encouragement is the Colliers forecast that land value could appreciate by as much as 10% within the course of the year.

-TC-

June 7th, 2007, 03:04 AM

http://www.businessmirror.com.ph/06072007/headlines08.html

Real estate on a roll with record 17% GVA hike

By Jennifer A. Ng
BusinessMirror
Reporter
June 7, 2007

THE vigorous 17.1-percent increase in the real estate sector’s gross value added (GVA) last year surpassed the 15.4 percent recorded in 2005 and the 16.1 percent recorded in 2004.

The National Statistical Coordination Board said this growth in 2006 was an “all-time high” and the highest in 40 years, or since 1967. “Level-wise, real estate GVA at constant prices reached P14.3 billion in 2006, higher than the P10.6 billion and P12.2 billion recorded in the years 2004 and 2005.”

The statistics board, an attached agency of the National Economic and Development Authority, said the robust annual performance of the industry last year was driven by increased renting and leasing by upscale giant super malls and commercial and shopping centers.

“The growth was further buoyed by the strong production and sales of residential developments in subdivisions and high-rise condominium projects fueled by the significant contributions of the remittances of overseas Filipino workers and Filipino immigrants,” it added.

The vibrant business process outsourcing sector also boosted sales and occupancy of office spaces, especially in leading commercial business districts.

GVA refers to all the payments to factors of production—wages, interest, profits and rents. It also includes capital consumption allowance and indirect taxes.

In contrast, the statistics board noted the industry performed terribly in 1984, when it recorded a 25.3- percent decline in its GVA, the worst in almost 40 years.

“It was during this time that the economy declined by 7.3 percent due to a number of reasons, to include, decline in world demand for Philippine exports and shattered investment confidence in the country brought about by political events, among others.”

The industry suffered another huge blow in 1997 when a financial crisis hit Asian markets, causing investors to shy away from the real-estate sector.

3cr

June 7th, 2007, 07:01 AM

IMF warns Asia of risks of asset bubble
By Maricel E. Burgonio, Reporter
Manila Times
http://www.manilatimes.net/national/2007/june/07/yehey/business/20070607bus1.html

SURGES in capital inflows may provide unwanted loanable funds that could trigger asset price bubbles, the International Monetary Fund (IMF) said.

An asset price bubble preceded the Asian financial crisis that began 10 years ago. Such a bubble is characterized by rising prices for financial assets such as company shares and real estate that are not supported by market fundamentals such as solid earnings and effective demand.

In a presentation, David Burton, IMF’s Asia and Pacific director, said the region is taking steps such as capital controls to cope with the volatile capital flows that have risen sharply in recent months.

However, capital controls will be difficult to maintain as these can create doubts about the future direction of policy, potentially discouraging foreign direct investment, the IMF official said.

“Particular concerns here are that surges in inflows can put strong upward pressure on currencies, can provide additional—sometimes unwanted—loanable funds in the financial sector, potentially contributing to asset price bubbles, and perhaps most importantly, can create a risk that funds might flow out more quickly than they came in,” Burton said.

He cited that the best short-run policy response would be a combination of exchange rate flexibility, and limited sterilized intervention to smooth exchange rate movements. Over the longer term, further steps to develop and deepen financial markets, including in the context of regional financial integration, can also help, the IMF official said.

“One issue that officials in many countries are currently grappling with again is how to deal with surges in capital inflows. While net inflows have been relatively constant in recent years, gross inflows and outflows have both risen sharply,” he added.

Burton said the increase in outflows is particularly noteworthy. It reflects a growing desire of residents to invest outside their home countries, which is a natural part of Asia’s growing financial integration with the global economy.

Despite local share prices posting record highs and rental rates in business districts reaching double digits, Bangko Sentral ng Pilipinas (BSP) officials have been saying that an asset bubble has yet to develop in the country.

Recently, the BSP implemented a package of reforms to prevent rapid expansion of the country’s money supply from stoking inflation. Domestic liquidity has been growing above 20 percent for the past several months, raising the risk of faster price increases down the road.

Foreign portfolio investments and overseas Filipino worker remittances have fueled the expansion of the country’s money supply.

BSP data also showed that residents’ investments abroad would increase to $700 million this year from $103 million last year.

As Asia’s share of global exports rises, Burton also said that sustaining high rates of exports growth will become difficult.

“Greater reliance on domestic demand will be needed to assure more balanced and sustainable pattern of growth,” he said.

3cr

June 9th, 2007, 08:18 AM

Property sector boom seen to continue
By EDU LOPEZ
Manila Bulletin
http://www.mb.com.ph/BSNS2007060995588.html

The continued growth of the real estate industry is expected to sustain its momentum this year following a brisk performance of the sector in the first quarter of 2007.

The National Statistical Coordination Board (NSCB) made this forecast based on the leading indicators such as the expansion of existing malls and shopping centers, increased office space demands from the call center industry and business process outsourcing (BPO) sector, and stepped up priming activities of major real estate establishments.

NSCB said the real estate industry continued its outstanding performance with a significant rise of 17.1 percent in gross value-added (GVA) in 2006, the highest annual growth achieved in 39 years.

Last year’s growth, an acceleration from its 15.4 percent performance in 2005, surpassed the high 16.1 percent growth recorded in 2004, said NSCB.

"Level-wise, real estate GVA at constant prices reached P14.3 billion in 2006, higher than P10.6 billion and P12.2 billion recorded in the years 2004 and 2005.

NSCB attributed the robust annual performance in real estate industry to the increased renting and leasing operations as a result of the opening of upscale giant super malls and commercial and shopping centers.

"The growth was further buoyed by the strong production and sales of residential developments in subdivisions and high-rise condominium projects fuelled by the significant contributions of the remittances of Overseas Filipino Workers (OFWs) and Filipino immigrants," said NSCB.

The growth of Business Process Outsourcing (BPO) sector continued to boost sales and occupancy of office spaces, especially in the leading commercial business districts in the country.

NSCB noted that in the 1980s, the performance of the real estate industry was affected by the economic and political developments in the country.

While the industry grew by 13.6 percent and 13.9 percent in 1980 and 1982, respectively, the sector plummeted by 25.3 percent in 1984, its worst performance in almost 40 years.

"It was during this time that the economy declined by 7.3 percent due to a number of reasons, to include, decline in world demand for Philippine exports and shattered investment confidence in the country brought about by political events, among others."

From 1991, the industry gradually increased, attaining a 10.7 percent growth in 1996 before slowing down in the next five years to a low of negative 10.7 percent in 2001, the second lowest annual growth rate since 1967.

The slowdown was largely attributed to the 1997 Asian financial crisis, which was felt not only by real estate players and consumers but also by the entire economy.

-TC-

June 9th, 2007, 05:54 PM

http://business.inquirer.net/money/breakingnews/view_article.php?article_id=69978

Bank real estate loans down in Q1
Inquirer
06/07/2007

MANILA, Philippines -- Commercial banks' outstanding real estate loans totaled P184.5 billion in the first quarter, down 0.97 percent from P186.3 billion in the same period last year, the central bank said.

Real estate loans fell to 10.74 percent of their total outstanding loans from 11.64 percent in the first quarter of last year, it said.

The central bank said 80.4 percent of the real estate loans in the first quarter went to commercial infrastructure projects and the remainder to individual borrowers.

It said the banks’ past-due real estate loans reached P19.99 billion, or 10.8 percent of total outstanding real estate loans in the first quarter.

The banks’ investments in stocks and commercial paper issued by real estate companies reached P25.5 billion in the first quarter, up 50 percent from P16.98 billion a year earlier, the central bank said.

Officials said this rise indicated growing confidence in the real estate sector.

-TC-

June 22nd, 2007, 07:41 PM

It's got something to do about the real estate industry so this ought to be posted here too... for everyone's info.

People have to be aware that there are unscrupulous developers out there. Buyers beware! :rant:

Parang something about the developer 24k, the details are vague, parang isinangla yata ng developer yung property... ngayon meron na daw order from HLURB to the developer to stop selling units of Torre Venezia.

here's what I found from the www.gov.ph (http://www.gov.ph/) forum...

Torre Venezia Project Exposé • (5493 bytes)
Posted: 5/13/2007 • 09:54 GMT+8

By: annabelleg
registered: 5/13/2007
member
quezon, Philippines
May 13, 2007

I am Annabelle Guevarra-Gonong and I am a dermatologist currently practicing here in Quezon City. I took the liberty of writing to you to seek your help in informing the public regarding a transaction that my husband and I made with a realty development company 24 K Construction and Development Corporation (with Mr. Rodolfo Guinhawa as CEO) regarding their project Torre Venezia. It is a commercial/residential building located at N0. 62 Timog Ave. cor. Scout Santiago St., Quezon City.

Last November 2005, my husband and I availed 2 commercial units and a parking space from the aforementioned project under a 30% down payment five years payment scheme. We were assured that the commercial area will be operational by June 2006 and upon payment of the 30% down we can immediately start our set up. These two adjacent units were intended to be my clinic since I am just renting the space where my clinic is right now. We paid the 30% down payment amounting to P 2,840,136.00 and immediately proceeded with our set up for the clinic and spent more or less two million pesos. We finished just in time for our intended date of transfer which is June 2006. This was also the time for us to start paying our monthly amortization. However, this date came and we realized that we can not transfer yet since the commercial area was not yet finished.

My husband wrote to the developer Mr. Rodolfo Guinhawa and told him that it was unlikely that we would be able to utilize the units as a clinic since construction works were still being undertaken on the residential units and it would be hazardous for our patients to come to the units. There were still no water and electricity, the parking spaces were not still available, and there were a lot of construction materials and debris at the ground floor. My husband then asked for a moratorium on the monthly amortization since the developer and his representative agent were not able to make good on their promise that we could utilize the units by June 2006. Because we were not able to transfer my husband and I became very disappointed and decided to give them time to finish the project. We patiently waited for several months but we noticed that the phase of the construction was slowing down. By that time we were wondering if there was a problem with the project and this is what prompted my husband to go to the Housing and Land Use Regulatory Board (HLURB) last February 20, 2007.

Inquiring from the HLURB, my husband found out the following violations of the developer regarding the Torre Venezia project:

1. It has no Certificate of Registration and License to Sell.

2. It has a Cease and Desist Order as early as October 17, 2005 from selling units and collecting monthly amortization from the buyers.

3. The property over which Torre Venezia is being built was mortgaged to Young Builders Corporation since 1997 up to the present time.

In addition to the above violations, my husband also found out that the building permit issued by the Office of the Mayor, Quezon City only approved for 23 floors but the developer added four more floors for which he hasn’t secured an approval yet. This puts in question the structural integrity of the building.

When I was informed by my husband about what he found out, I was shocked and distressed. It appeared that we were duped by the developer and had thrown away our hard earned money. On February 21, 2007, my husband met with the developer Mr. Rodolfo Guinhawa. My husband told him that he misrepresented important facts about the project when they dealt with us. He told him that he should return the money that we paid including the amount we spent in renovating the two units. On his part, Mr. Guinhawa himself admitted existence of the above problems and that he was doing his best effort to fix it and would exert their best efforts to sell the units that we bought. This was not acceptable to me and my husband.

Last March 12 and 15, 2007, since there was no formal commitment on his (Mr. Guinhawa) part, we filed a case of “Violation of the Building Code – PD 957” and “Estafa”. During the preliminary hearing last May 9, 2007 for the crime of estafa, Mr. Guinhawa did not show up. Instead, he sent a representative asking for 10 days extension to file a counter affidavit. We all know that our legal fight can be protracted considering the number of cases our courts (judicial system) handle and the delaying tactics and legal maneuvering the developer may employ. Meanwhile 24K Construction and Development Corporation continues to advertise, sell, and collect payments from unknowing buyers risking their hard earned money. To date, most of the buyers if not all are not aware of their predicament. My husband and I feel that the problems of Torre Venezia should also be disclosed to them. With your help, we believe that we could notify the public and avoid unfortunate events to happen again to unsuspecting buyers.

Thank you very much for your kind attention.

portludlow

June 24th, 2007, 09:37 PM

Moves comes amid property boom

Agri dept plans halt to farm land conversion
By Chino S. Leyco, Researcher
http://www.manilatimes.net/national/2007/june/25/yehey/business/20070625bus1.html
AMID the country’s record property boom, the Department of Agriculture plans to ask Congress for a moratorium on the conversion of prime farm land to nonagriculture use.

Agriculture Secretary Arthur C. Yap said the agency would look into the pros and cons of the farmland conversion issue before drafting any proposal to the legislative body.

“To be frank with you, I have to study it first, in thinking of appealing the law. I have to get my copy with the correct premise,” Yap told The Manila Times.

If Congress passes the moratorium, conversion of prime agricultural lands to nonrelated purposes, such as subdivisions, would come to an end.

The Philippines has been losing its farmlands to residential subdivision and golf course developers, particularly in areas outside the key urban centers, thus threatening to derail the government’s food self-reliance program.

Data from the Bureau of Agricultural Statistics (BAS) showed that farmlands in 2002 stood at 9.7 million hectares, or 3 percent lower than nearly 10 million a decade before.

The BAS data also showed that agricultural crop area in 2005 stood at 4.07 million hectares, down by 1.4 percent, or 56,200 hectares, from 4.126 million the previous year.

Palay plantation also fell to 4.07 million hectares in 2005 from 4.13 million in 2004, with 50 percent of the total subsegments of the agricultural crop area declining in the same period.

Agriculture Undersecretary Segfredo R. Serrano told The Times that property developers should be regulated this time.

“I agree with Secretary Yap. Many of our farmlands are now subdivisions. Like those in Laguna or the Southern part of Metro Manila,” Serrano said.

He said some of the agency’s funded irrigation systems were gone, due to property developments.

David Leechiu, president of property consultancy Leechiu & Associates, however, said the government should not allow further restriction on property development.

“It will make us less competitive later on. There are other ways to stimulate the agricultural sector. They should be innovative,” he said.

Leechiu also said that farmlands conversion to residential projects is very minimal.

Macquarie Research Equities said the residential segment has the best long-term prospects in the property industry.

In the short term, the property sector may enjoy a 12- to 18-month up-cycle, it added.

The agriculture department’s plan comes just as the country’s property sector is recovering from the Asian financial crisis of a decade ago. The National Statistics Coordination Board (NSCB) had said that strong remittances of Filipino overseas workers and the business-process outsourcing (BPO) industry have led to a renaissance in the real-estate industry.

Last year the industry grew at a 40-year high due to “increased renting and leasing operations as a result of the opening of upscale super malls and commercial and shopping centers,” the NSCB said.

“The growth was further buoyed by the strong production and sales of residential developments in subdivisions and high-rise condominium projects fueled by the significant contributions of the remittances of [OFWs] and Filipino immigrants,” it added.

The agency said the property sector’s gross value added (GVA) rose 17.1 percent to P14.3 billion last year, surpassing the 16.1-percent growth in 2004. GVA refers to services produced through buying, selling, leasing or renting property.

Besides malls and housing, the burgeoning BPO industry also lifted sales and occupancy of office spaces, particularly in key commercial business districts, the NSCB said.

The real-estate industry plummeted amid political turmoil in the 1980s, when a popular upheaval ended the dictatorship of Ferdinand Marcos.

It began recovering in 1991 and reached 10.7-percent growth in 1996 before the Asian financial crisis caused the sector to contract by 10.7 percent in 2001.

This will make real estate much more expensive if they implement a rigorous land use regulations. :ohno: On the flipside, this will prevent suburban sprawl. :)

j.r.

June 24th, 2007, 11:47 PM

do we have by any chance a definitive book about the 97 financial crisis? when i was in college, i relished pete lacaba's 'days of disquiet, nights of rage' that dissected the factors that led to the so-called first quarter storm. i'm quite ashamed to say that i was in manila during the financial crisis yet so clueless about it. all my energy then was bent on going abroad and earn a decent living. on hindsight, para pala akong yung character in ishmael bernal's 'hinugot sa langit', the employe who got a job abroad and can't wait to turn his back on the pinas with its poverty, pollution, politics, kotongan, etc. i even believed then that i would really retire in a foreign land... then fast-forward to 2007, can't wait to get a piece of the real estate action in my own beloved (pala) country... ala lang, may vested interest din to read about the factors that led to the 97 crisis and its effect on real estate and condo business. some people in the forum kasi are blaming erap for the crisis, while others say it's really inevitable as the whole region was affected. year 2007 and there's another property boom.but this time, it is said, there are key factors (phenomena) that are in the picture now that many believe would make another real estate crisis unlikely (OFWs, BPOs, real demand, etc.). Suma tutal, just want to find out the chances of my unit being actually built (hello, torre venezzia...) :)

gen1

June 25th, 2007, 07:46 AM

the 97 crisis was a regional crisis. the philippines was doing quite well under the tutelage of el tabako. sabit lang tayo sa freefall ng thailand, as our currency as tied to that of the baht in the conciousness of the market players.

as a matter of fact, we were among the last of the countries to be affected by it.

if a more qualified president than erap was elected, we would've ridden through that rough spot more easily.

-TC-

June 25th, 2007, 06:36 PM

It is unfortunate that we've been stuck in a boom-bust situation for the last few years. We've had a good president followed by a bad one followed by a good one... a few good years followed by crisis years. We've never really had any chance to sustain our economic growth and so many times in the past we were always shooting ourselves in the foot! :bash:

For our sakes, our economy and the real estate industry in particular, we hope our 'luck' changes and this economic surge and property boom will be sustained until the next decade.

-TC-

June 25th, 2007, 08:34 PM

http://www.manilatimes.net/national/2007/june/26/yehey/business/20070626bus1.html
Mass housing sector a booming business
By Katrina Mennen A. Valdez, Reporter
The Manila Times
June 26, 2007

THE number of housing projects given tax and other perks have risen significantly in a span of four years, data from the Board of Investments (BOI) show.

Investments in this segment of the property sector jumped by 83 percent to P1.548 billion before the first half of the year ended from P268.482 million in 2003.

Four years ago, only two real estate developers registered with the BOI, an
incentive-giving agency attached to the Department of Trade and Industry.

These were Sanent Realty & Development Corp., which invested P181.145 million for the construction of 932 housing units in Sampaloc, Manila, and Tanay, Rizal, and Firm Builder’s Realty Development Corp., which had infused P37.025 million for its 314 housing units and another P50 million for its 465 low-cost housing units.

Starting in 2005, the middle- to low-cost housing segment boomed. The number of real estate developers venturing into those segments rose to eight with a combined 14 projects. To date, the mass housing industry jumped by 81 percent to P1.407 billion business.

Last year, mass housing projects doubled to16 with total investments of P1.433 billion.

For the first half of this year, investments in this line of business had already amounted to P1.548 billion for 9 projects. These include the Ridgewood Estates Inc.’s P90 million project in Imus, Cavite; Stateland Inc.’s P104 million project in Cabuyao, Laguna; DM Consunji Inc.’s P255-million project in Parañaque City; and Filinvest Land Inc.’s P97 million project in Santo Tomas, Batangas.

Firm Builders continued with its mass housing venture with a P41-million project this year. Other firms that registered with the BOI are Omico Corp. with P63 million in investments, Palmera Homes Inc. with P197 million, and Phinma Property Holdings Corp. with P 269 million for its Commonwealth project and another P195 million for its Novaliches, Quezon City, venture.

Investments made in the mass housing segment since 2003 had accumulated to almost P5 billion.

Last month, the BOI said it is reviewing the guidelines on the grant of incentives to mass housing projects to ensure that the country’s housing backlog of 1.4 million units is addressed.

Trade Undersecretary Elmer C. Hernandez, who is also BOI managing head, said that the review is focused on “striking a balance” between investments for high-rise or vertical projects and subdivision-type or horizontal developments.

Hernandez said a cap—in terms of housing units built over a period—was being considered to encourage the balance between the two types of projects.

lazybum

June 26th, 2007, 07:10 PM

-TC-

June 26th, 2007, 07:21 PM

Does anybody on this board know where I can obtain historical and current regional commercial and residential real estate market data? I would like to subscribe if they are available (preferably on-line). Thanks in advance.

@lazybum... you need regional data? You can go to www.colliers.com, click on the specific country you like, download the research report (e.g. HK Property Market Overview, Asia Pacific Office Market Overview, etc.). There are lots of stuff. You may also subscribe to their newsletters or reports and receive these in your inbox when they become available.

lazybum

June 26th, 2007, 11:57 PM

Thanks, TCCHUA.

bariQ

June 27th, 2007, 08:12 AM

oi mga peeps mag rereal estate ako d2 sa cali as part time ko, meron ba kayong tips :D i dont know much yet... newbie pa ako

-TC-

July 1st, 2007, 11:20 AM

http://www.manilatimes.net/national/2007/july/01/yehey/property/20070701prop1.html

Major Developers Invested Heavily in Bonifacio Global City
The Manila Times
July 1, 2007

Within the next five years, over 9,000 residential condominium units spread in at least 28 high-rise buildings will become available in Bonifacio Global City indicating the status of the 240-hectare business district as a fast-rising urban center. In addition, 14 office towers as well as major institutions like the 600-bed ultra modern St. Luke’s hospital are also under construction.

Funded individually by the major players in the Philippine real-estate industry, the fast rising projects in Bonifacio Global City represent a collective investment in the area with an estimated value of at least P70 billion, strong assurance of the district’s emergence as a premier residential and business hub. Among those betting heavily on the keen prospects of Bonifacio Global City are listed companies Ayala Land, Megaworld, Robinsons Land and C and P Homes’ subsidiary Brittany Corp. Other companies that are seeing the great potentials of the rising business district are Federal Land, Philtown Properties, Century Properties, Meridien, G&W Architects, Winville Development Corp., PhilRealty Global Marketing Inc., Daichi Propoerties, Golden Forum Land, WLand and First Global BYO.

Jun Bisnar, head for commercial operations of Fort Bonifacio Development Corp. (FBDC), the firm taking charge of overall development of the area, projects that about 7,000 to 9,000 new households will soon establish residence in this dynamic section of Taguig City. As families flock to the area, a fresh wave of office and commercial buildings are set to follow suit.

Unlike other business districts in the metropolis, Bonifacio Global City is prepared to provide an environment where residences, offices, schools and commercial centers are within walking distance of one another. The new masterplan of the City Center resulted to more efficient traffic flows for vehicles as well as for the people on the ground. Bisnar noted: “This advantage will allow residents and other locators to spend quality time with their family, on their various interests and hobbies in life, and on what really matters to them. Our innovative masterplan includes a modern road network that works, attractive amenities that encourage walking, lush parks and open spaces and other elements that contribute to better quality of life and good health because of the invigorating and clean environment of Bonifacio Global City. All these will ensure that Bonifacio Global City will deserve its descriptor as the “home of passionate minds.”

The promise of suburban living in a central in-city location is the reason behind the brisk sales of Serendra, a 12-hectare residential complex with 65 percent of the area devoted to lush landscaping. It has the highest open space ratio among in-city residential condominium. The complex offers various lifestyles. One Serendra, by Ayala Land Premier, is the lowest density residential condominium project in Metro Manila with units that offer exclusivity and privacy. Community Innovations’ Two Serendra is composed of condominium clusters that offer vibrant social interaction. But whatever lifestyle one chooses at Serendra, all homeowners benefit from its being minutes away from the Makati Business District.

Robinsons Land has three residential condo projects in Bonifacio Global City, the 44-story McKinley Park Residences; the 40-storey Fifth Avenue, and the 28-story Fort Residences. The three condos will yield around 1,200 units, which have been successfully offered in the market.

Century Properties is the builder of the 39-storey South of Market twin towers and the 32-story Essensa East Forbes, while Philtown Properties is constructing the 43-story One McKinley Place and the 28-story Fairways Tower.

Most developers agree that the innovative masterplan of the area built around the Bonifacio High Street and the City Center, is a chief attraction of Bonifacio Global City. Jing Serrano, president of Brittany Corp., has pointed out that besides being the fastest growing area in the Philippines, “BGC was well masterplanned with wider roads, ample open spaces and many amenities.” Brittany is constructing the Avant at the Fort, a 38-story residential tower with 300 units. Avant is the first of Brittany’s series of residential projects in Bonifacio Global City.

Another developer, G & W Architects, has pioneered the construction of build-to-own condo projects in BGC. Among its projects, which are mostly sold out, are the 22-story Penhurst Park Place turned over in 2004, the 22-storey Kensington Place completed in July 2006, the 21-story Grand Hamptons Place slated for delivery in December 2007, and the 28-story Sapphire Residences, scheduled for ground*breaking at the end of the year.
With the simultaneous rise of commercial/retail, residential, institutional, and office developments, it is expected that the critical mass needed by Bonifacio Global City will come in the next two years as more developers and investors continue to pour their resources into the area, Bisnar said.

The best indicator of Bonifacio Global City’s emergence as a premier business hub is the rise of property values in the area together with the heavy influx of investments pouring in this new modern business district.

jonno

July 1st, 2007, 11:50 AM

^^

And locals as well as many Filipino emigrants aren't really investing in properties yet. Wait till they do - you ain't seen nothing yet. :)

3cr

July 1st, 2007, 12:01 PM

The "new economy" in our midst
Posted by Dave Llorito
Philippines Without Borders
http://davidllorito.blogspot.com/2007/03/new-economy-in-our-midst.html

BEST new BPO locator of the year: Dell Philippines. Best midsized BPO company of the year: Leverage Systems Technologies. Most innovative BPO of the year: Transprocure Corp. Fastest-growing BPO company of the year: Teletech. Best BPO employer of the year: Convergys Philippines. And the BPO company of the year: Accenture.

People might be wondering if the brave new world of the “new economy,” a buzzword that has been associated with the information revolution, has reached our shores. We say “yes,” and the companies mentioned above are among the best in our midst, at least for the year 2007.

On Thursday evening the Canadian Chamber of Commerce—in partnership with the Business Processing Association Philippines (BPAP) and other organizations, including this paper—gave out several awards in recognition of their contributions to the economy.

The awards are rightly helping the public become more aware of their contributions because right now this segment of the Philippine economy is giving lots of excitement and promise to young entrepreneurs and workers. It has even started to create a positive impact on other sectors of the economy, including real estate, wholesale and retail, and even food and beverage manufacturing.

Nowhere is its impact more visible than in the property sector. Following the Asian financial crisis, office vacancy rates in the country’s urban centers like Makati and Ortigas went as high as 50 percent. As the “new economy” crept in, office vacancies went down so fast that even property developers were caught nearly napping.

These days, vacancies in prime and grade A office—those really nice and carefully designed office spaces with accreditation from the Philippine Economic Zone Authority—are all of just over 1 percent. That explains the frenetic construction in Makati, as well as in Fort Bonifacio. It’s likely that construction activities will really move faster this year.

If the predictions of its drumbeaters prove true, we are going to see this segment of the economy employing close to a million workers and generating more than $12 billion worth of services exports. At that size, the industry, property consultants say, would require close to 3-million square meters of office spaces. Hence, developers have to rush because if they fail to supply the spaces required by the BPO, the industry might suffer office-space shortages.

Right now, existing supply of offices plus those in the pipeline until 2010 would total 1.6-million square meters. That would mean a shortage of about 1.4-million square meters. It’s a kind of problem this country should be happy to have.

A million workers for the industry might seem too ambitious, but if one looks at the profile of these industries, there are reasons to be optimistic. They are highly labor-intensive. Teletech, for instance, has more than 10,000 employees. Convergys has 11,000. Many others are employing close to these numbers, and the list of companies keeps growing.

We mentioned the winning companies above to highlight how far the Philippines has gone in terms of developing its capabilities in these emerging knowledge-driven industries. The winners came from varied sectors, including software development, procurement-transaction processing, customer care, global management consulting, legal support and publishing, among many other activities. The judges, we have learned, really had a hard time determining the winners, an indication that what we have here in the Philippines are highly competitive and dynamic global players.

It should not be a surprise because way back in 2000, when the Department of Trade and Industry started plotting out measures to attract call centers, there was practically no BPO to speak of, except maybe some animation companies that have been here in the Philippine since the ’80s. Now, estimates from the BPAP indicate that the industry employs about 250,000 people and earns more than $3 billion a year. In 2007, assuming the same frenetic growth it has achieved in the last five years, the industry might yet generate US$4.9 billion.

The term “new economy” emerged in the ’90s as a way to describe the economies of advanced countries that underwent transformation from being industry-led to services-led, driven by information technology. Enthusiasts then thought that with extensive use of information technology, economies would enjoy steady growth and low unemployment. Others came even to declare that the business cycles of boom and bust had ended and that economies, having found Shangri-la, will prosper forever.

That proved illusory with the dot.com bubble in 1995-2000 that saw many technology stocks crashing down to terra firma when it burst. The global recession that followed discredited the “new-economy” prophets. Nevertheless, the term new economy continues to gain currency as global companies took to heart its doctrine that companies should “focus on their core competencies” and outsource the rest through the use of information technology.

In the new economy, profits are supposed to come from company intangibles like brands, intellectual properties, technical capabilities and reputation. Routine functions like back-office operations, manufacturing, and customer care could be outsourced elsewhere, preferably in low-cost locations in the developing countries.

That’s how we came to have all these outsourcing companies in our midst. And their presence is expanding rapidly. It’s new metamorphosis is the knowledge-process outsourcing (KPO) where local MBAs, engineers, and economists perform analytics like risk analysis for global corporations and organizations. And if we continue to play our cards well, we might yet end up duplicating India’s success in this business.

Playing our cards right means that the country should maintain its competitiveness in this sector. There’s no doubt that the private sector is mobilizing their resources to meet the challenge. The Ayalas, for instance, are investing billions putting up the buildings needed by the BPO. The conglomerate is also investing heavily in the industry, especially in KPO. There are indications that Rockwell Land of the Lopezes is also moving in the same direction.

The only kinks so far are in the public sector, where efforts to restore the importance of English in the classrooms through legislation has not been moving. We still haven’t heard of any major initiative to reform and upgrade the country’s education system. We have yet to see how the government is improving the country’s capability in the sciences and mathematics. Malacañang, as well as our educators in the private sector, therefore, should look at these issues as soon as possible, so we could sustain the momentum in embracing the new economy.

meerc

July 2nd, 2007, 10:10 AM

Philippines' property sector is red-hot

The talk at a recent dinner party in Hong Kong hosted by one of Europe's largest banks for a group of wealthy clients was centred - surprisingly - on the Philippine property sector.

I can't remember the last time investors like this have waxed so lyrically about the Philippines,' said a banker, who asked not to be named. Booming demand for office space and condominiums has resulted because of a rise in outsourcing to the Philippines, as well as the purchasing power of the country's more affluent overseas workers.

The upsurge, say developers and market analysts, shows no signs of flagging. The sector's upbeat prospects are vividly reflected in the share prices of property companies, which have risen by an average of 17 per cent so far this year, nearly double the advance of the Philippine Stock Exchange's main index.

'The property market is now very much on the radar screen compared to four or five years ago, when nobody even considered this place,' said Mr Lindsay Orr, country head of real-estate services group Jones Lang LaSalle.

The expansion of foreign companies' 'offshoring' of business functions such as call centres and back-office work to the Philippines has been breathtaking, eclipsed only by India.

This has created huge demand for large office space in prime areas of Manila over the past years, which developers are scrambling to meet. The chances of finding rentable floor area for a sizeable outsourcing centre in the business district of Makati are practically zero these days.

Call centres typically need at least 32,000 sq ft of space. New rents in Makati rose 15 to 20 per cent last year. 'They'll probably do the same in 2007,' said Mr Orr. In the district's top addresses, landlords are raising office rents by as much as 30 per cent for new tenants, with some hitting 1,000 pesos (S$ 32) per sq metre.

Thought that is far lower than in most Asian financial centres, it is sky-high by local standards, Still, despite a large pool of educated English speakers, rents and salaries here will need to stay competitive as other countries ramp up their outsourcing sectors. With no large office buildings opening in Makati this year, new operations are looking for space in other parts of the capital, especially nearby Fort Bonifacio, a former military camp, as well as cheaper regional centres.

The second city of Cebu is now fast establishing itself as an outsourcing centre, as are smaller cities like Iloilo and the pleasant university town of Dumaguete, all in the central Philippines. A decade ago, the Asian financial crisis put paid to the last major rally in the property market here.

But this time around, said the Philippine Central Bank's Governor Amando Tetangco, the market is being dri- ven by real demand: 'It's different from 1997, when the rise in property prices was due largely to speculators.'

When Net Group, a property developer focused on projects for outsourced operations, completed its 22-floor Net Square building in Fort Bonifacio last July, it reportedly signed up tenants for the entire leasable space of 194,000 sq ft six months before it was finished. Blue-chip developer Ayala Land has managed to pre-lease over half of its 506,000 sq ft complex in Makati before the ground was broken on the project. The US$ 64 million Dela Rosa E-Services Building is set to open in late 2008.

Going by current estimates, future demand for leasable space for outsourced operations as well as so-called build-to-suit deals for specific clients will be mighty. The Business Processing Association of the Philippines reckons that by the end of the decade, 950,000 people will be employed in outsourced operations, nearly a four-fold rise on the current level.

'We're getting around six to eight visits a week from mostly American companies sizing up whether to outsource to here or to India,' said association executive director Mitch Locsin. 'About half are choosing the Philippines.'

Based on the association's projections, analysts reckon that by 2010, an additional 26 million sq ft of office space will be needed. That represents roughly the entire office stock in Makati today. But only around three million sq ft is currently under construction across the Philippines. Even so, mega projects are coming off the drawing board.

Ayala Land wants to replicate India's campus-type IT developments in the Philippines, starting with a 37ha site in Manila's Quezon City. Early next year, it plans to break ground on a US$ 191 million technology park with shops and residences built around 10 office complexes. Mid-priced residential condominiums, with units typically costing S$ 80,000 to S$ 160,000, are the property market's other main driver.

The demand here is being spurred by Filipino professionals working overseas and, lately, enticingly low mortgage rates. Some eight million Filipinos - a tenth of the population - live and work overseas. Many are in low-paying jobs, but an increasingly large number are nurses, engineers and other professionals.

That trend is being closely watched by property developers. As long as the remittances of overseas workers keep growing, there should be no let-up in demand, said Mr Victor Asuncion, research director of property consultants CB Richard Ellis Philippines.

The Philippine Central Bank expects overseas workers to wire home a record US billion (S$ 22 billion) this year. A sizeable chunk of that is expected to be spent on real estate. Remittances are also keeping shop tills ringing at home, and that is driving the construction of new malls.

With an eye to buyers from overseas, developer Megaworld now has 40 sales offices in countries with sizeable Filipino diasporas. The company, which pioneered the mid-end condominium market in the 1990s, expects 40 per cent of sales for middle-income housing to soon come from overseas earners.

Its biggest project is a 9,000-unit, 20-tower complex called Manhattan Gardens, on a 5ha site in Quezon City. The first tower, set for completion in late 2011, has been 90 per cent pre-sold. The surge in demand from overseas workers is also partly demographic.

'Many professionals who went overseas in the 1970s and 1980s are retiring and buying pro- perty in the Philippines as second homes and investments,' said Ayala Land spokesman Paulo Campos. Filipinos are also taking advantage of local mortgage deals, which have never been better. Some banks are now offering 25-year mortgages at fixed annual rates of 11 per cent.

The boom is clearly reflected in the earnings and share prices of the country's five major developers: Ayala Land, Fil-Estate Land, Megaworld, Robinsons Land and the SM Group of tycoon Henry Sy.

Megaworld is pencilling in a 40 per cent increase in net profit this year after earning 2.04 billion pesos last year. Condominiums are the only property that foreigners may own in the Philippines, though ownership restrictions may be relaxed.

President Gloria Arroyo, her economic managers and many in the business community favour loosening a number of restrictions to attract more foreign investment.

Reference:Straight Times

j.r.

July 2nd, 2007, 11:29 AM

wow! heady times indeed! :lol: it's good 2 know even non-Filipinos r noticing the trend!

-TC-

July 8th, 2007, 03:41 PM

You may go to http://groups.google.com/group/myrealestateph to download the full pdf file there or right click and save the link provided below.

COLLIERS INTERNATIONAL QUARTERLY RESEARCH REPORT PHILIPPINES (http://www.colliers.com/Content/Repositories/Base/Markets/Philippines/English/Market_Report/PDFs/Knowledge_July07.pdf)

Philippine Property Market Overview
Market Conditions at July 2007
Market Forecast to July 2008

EXECUTIVE SUMMARY

Property Indicators: Reflating Land Values

• We are now reflating land values due to 1) increased pricing power of developers in both office and residential segments, 2) impressive take-up in residential pre-sales market and 3) pre-lease take-up in the office market considering that Manila has not historically been a strong pre-lease market.

• At the close of June, developable land in the CBD is estimated at an average of P235,000 per sq.m. – up by nearly 6% QoQ. In the alternative business district of Ortigas, our estimates point to an average land value of P114,750 per sq.m. Reportedly, a one hectare property in Ortigas was sold during the quarter for approximately P100,000 per square meter.

• For the period of January to March 2007, licenses approved by the HLURB slightly fell by 15% YoY to 75,764 units as against 89,113 units in the same period last year.

Office: 2007 Rents Up 20%

• The stock of office accommodation in the CBD will remain stagnant in the course of 2007 at 2.647 million square meters. A slight relief is expected in early 2008 with the completion of less than 10,000 square meters for the Ayala Center Glorietta 5 Building.

• At the close of June, CBD-wide vacancy fell to 3.4% from the previous quarter’s 3.7%. We expect the vacancy rate to further ease to less than 3% by the end of 2007. For the first six months of the year, the estimated absorption of office space in the Makati CBD was recorded at 12,281 square meters. Half year absorption represents 45% of our full year forecast of 27,281 square meters.

• Reflecting a tight supply market, the Premium Grade segment escalated by nearly 20% in the first six months of the year to an average of P1,018 per sq.m. per month. Rental levels are now at the peak 1997 levels. Expectations are for rents to further increase by 5% to 10%in the course of 2007 to an average of P1,062 per sq.m. per month.

• Premium Grade office capital values are up by nearly 9% in the first half of 2007 to an average of P105,000 per sq m. In the remainder of the year, our capital value forecast is P115,800 per sq.m.

Residential: Easing Rent Escalation in Some Locations

• For the first six months of 2007, net take-up for residential condominiums in the Makati CBD was estimated at 580 units. We expect full year take-up at 697 units – down by 5% YoY from 737 units in 2006 due to the lower quantum of residential units completing this year.

• Residential vacancy in the Makati CBD eased to 7.1% from the previous quarter’s 9.3%. In the course of 2007, expectations are for vacancies to further ease to 6% due to the easing supply pressure as Columns Tower 2 is the only project slated for completion during the year.

• Rents for luxury 3-BR units in the Makati CBD escalated by nearly 10% in the first six months of 2007 to an average of P519 per sq.m. per month or P135,000 per unit. Rents are just 5% off from the 1997 peak of P538 per sq.m. per month.

• Rockwell rents escalated by 2.3% to an average of P622 per sq.m. per month or P140,000 per month for a 3BR unit. However, it appears that rents are starting to cool down after the nearly 10% increase in rents throughout 2006.

• Fort Bonifacio residential rents have expanded by a meager 1.1% to an average of P559 per sq.m. per month or P162,000 per unit. Market expectation that the location would be flooded with an influx of new supply starting this year is starting to have a cooling effect on rents.

-TC-

July 14th, 2007, 06:48 PM

http://showbizandstyle.inquirer.net/lifestyle/lifestyle/view_article.php?article_id=76520

OFWs at the forefront of RP’s complete real estate event
By Charles E. Buban
Inquirer
07/14/2007

MANILA, Philippines -- She considers this event unprecedented and so far, the most challenging task she has helped organize.

Indeed, for Rosemarie Basa, the upcoming Philippine Real Estate Festival 2007 -- of which she chairs -- promises to be not just a venue where the vibrancy of the country’s real estate industry will be showcased but also a celebration of restoration of the market’s confidence.

“This four-day event happening from July 26 to 29 at the World Trade Center in Pasay City is something to look forward to. I consider this a landmark event since we were able to gather all the major stakeholders in both government and private sectors,” she said.

Basa added that hundreds of exhibitors have already confirmed and will be holding or participating in seminars on real estate, financing, career development, marketing, strategic planning and business opportunities scheduled during the event.

“The PREF 2007 also included in its program the staging of the 1st Miss Philippine Real Estate beauty pageant, the 14th anniversary celebration of Citizen Crime Watch/PNP Day, the 1st BizNews Asia Real Estate Who’s Who (BREW) Awards Night, the Fiesta Chinoy Day, as well as the 1st Kasaysayan ng Bahay (History of the House) Pilipino design competition,” Basa informed.

Timely

Basa believes the holding of the PREF 2007 is very timely considering that the country’s economic indicators are now at an all-time high.

“An extensive analysis of these indicators could well lead into a concrete picture of the role the real estate industry is currently playing to reach this remarkable economic sustainability and development that the country is enjoying right now,” she explained.

Basa shared that a recent data from the National Statistical Coordination Board revealed that the property sector had recorded the fastest growth rate among various monitored industries in recent months.

“In the fourth quarter of 2006, for example, gross revenues of the real estate sector grew by 40 percent compared to the same period in the previous year, which marks the 15th consecutive quarter of double-digit growth for the sector since 2003,” she reported.

OFW remittances

Basa attributed the industry’s strong performance to overseas Filipino workers (OFW) remittances -- estimated at $14 billion (about P643 billion) this year -- wherein a significant percentage will go to buying properties or be spent on home improvement,” she said.

This is why PREF 2007, Basa informed, has included holding free seminars on a wide array of topics on practical investments -- from managing on a tight budget to detecting fake land titles.

“We want to ensure the security of their investments, so we have invited all the national organizations and their members who are not only legitimate industry players but have the capability to offer their homebuyers the best package. On top of that, we will offer free international phone calls to families of OFWs here if they want to coordinate with their loved ones abroad on the prospect of buying properties here,” Basa said, adding that the different embassies and government agencies will be at the venue to entertain queries.

Basa said this is the reason a huge number of developers, contractors and realty-related service providers have already signed up for the event.

“We have reached out to several national organizations to join this event and they did after realizing that the PREF 2007 is not just a project of one group or individual. We also got confirmations from several key government officials as well as business leaders who will be sharing their expertise.

Indeed, this is one event that will gather all the groups and individuals as well as honor them for being responsible to the this enduring success that the Philippine real estate industry is reaping nowadays,” she said.

jonno

July 15th, 2007, 04:57 AM

^^

With the country on the verge of a property boom; let's be proactive and ensure that nothing like in 1997-98 would ever happen again. HLURB should be given more funding, power, teeth to ensure property buyers/investors are protected. Rules, rights, regulations of buyers, developers should be posted on HLURB website (currently, HLURB want you to "buy" their books for more info). I still know a lot of foreigners/balikbayans who wanted to invest in the property market here in the Philippines but unfortunately has no confidence on the "safety" of buying properties here. Many of them have checked the HLURB website but have found no relevant info that would ease their apprehensions. For example, the list of developers with License to Sell on HLURB website is updated only yearly.

Also, why don't the government set a compulsory "must know" information that real estate companies should include in their property consultants training?? We can't just have people selling products worth millions of pesos with them not having enough information about rules/ regulations/rights and other relevant stuff that concerns buyers/investors and property developers.

pushstars

July 15th, 2007, 07:41 AM

Is HLURB the regulatory body for this? I think government should provide a mechanism in where consumers and developers are protected from risks. I think they should focus on to avoid projects not being completed and consumers being protected from this.

jonno

July 15th, 2007, 09:17 AM

^^ ^^

Exactly right. And that's exactly the point man, even us are not even sure who's in charge of which. What's more for foreigners who wants to invest in properties here? How can they know it's a legit project? As far as I know, it's the HLURB that is in charge of issuing Licenses to Sell for developers. If you log on to their site however, they only update these lists once a year as if upgrading a website would cost millions of dollars. This would of course give room for scam developers to go on with their fraud dragging along with them legit developers because of the buyers distrust.

allan_dude

July 15th, 2007, 11:42 PM

Dubai World focuses on Philippines

Staff Report (Gulf News)
Published: July 14, 2007, 23:31

Dubai: Dubai World, the holding company for Nakheel, DP World and several other Dubai entities, is looking for potential projects in the Philippines.

Dubai World chairman Sultan Ahmad Bin Sulayem held talks with Philippines President Gloria Macapagal Arroyo on Friday to explore investment opportunities.

The talks covered Dubai World's interest in exploring investment in the Philippines in areas of ports, free trade zones, property development and the hospitality sector, according to a company statement.

The visit was arranged by the governor of Cebu Province, Gwendolyn Garcia, following her visit to Dubai in June, when she met senior Dubai World executives.

"Dubai World sees immense potential for growth in this country and we will actively explore the investment opportunities that are emerging here. The Philippines market will be considered an important part of our growth strategy for Asia," Bin Sulayem said in Manila.

Bin Sulayem was accompanied by UAE Ambassador to the Philippines Mohammad Ibrahim Al Juwaid, DP World chief executive officer Mohammad Sharaf and other officials.

---

Dubai World eyes Philippines projects (http://www.menafn.com/qn_news_story_s.asp?StoryId=1093159546)
by Safura Rahimi on Sunday, 15 July 2007

Dubai-based holding company Dubai World is looking at investment opportunities in the Philippines after a recent visit to the South Asian nation.

Talks between Dubai World chairman HE Sultan Ahmed Bin Sulayem and president of the Philippines, HE Gloria Macapagal Arroyo, covered the Dubai company's interest potential projects in the Philippines.

The company expressed interest in exploring infrastructure development programmes and investment in areas of ports, free zones, property development and the hospitality sector.

"Dubai World sees immense potential for growth in this country and we will actively explore the investment opportunities that are emerging here. The Philippines market will be considered an important part of our growth strategy for Asia," HE Sultan Ahmed Bin Sulayem said.

"We are very excited about the prospects of our visit to the Philippines, especially to Cebu. We want to do something in this beautiful island, and strengthen the bonds between the UAE and the Philippines. During our talks we identified several potential areas for investment and we will be studying them in depth to develop viable investment options," he added.

The government-owned company has been planning for major investments in Asia to increase its already extensive presence in the region.

The firm said Thursday it is looking to tap into the rapitdly growing economies of China and India by purchasing or expansding port facilities in the two booming nations.

---

Dubai World seeks to invest in Philippine market (http://www.menafn.com/qn_news_story_s.asp?StoryId=1093159546)
MENAFN - 15/07/2007

(MENAFN) The Chairman of Dubai World, the holding company which owns Nakheel, DP World and several other Dubai entities, said that the company is looking for potential projects in the Philippines, Gulf News reported.

Dubai World chairman, who held talks with Philippines President, said that the company is interested in exploring investment in the Philippines in areas of ports, free trade zones, property development and the hospitality sector.

He added that Dubai World sees immense potential for growth in the South East Asian country and will actively explore the investment opportunities that are emerging there.

---

Sultan Bin Sulayem Meets President Arroyo of the Philippines (press release) (http://www.albawaba.com/en/countries/Cyprus/215067)

The President of the Philippines, HE Gloria Macapagal Arroyo, received the Chairman of Dubai World, HE Sultan Ahmed Bin Sulayem, at her palace and expressed her support for any investment opportunities that the Dubai-based holding company could create in her country.

The talks covered Dubai World's interest in exploring investment in the Philippines in areas of Ports, Free Zones, property development and the hospitality sector.

The visit was arranged by the Governor of Cebu Province, Gwendolyn Garcia, following her visit to Dubai in June, when she discussed investment opportunities with senior Dubai World Executives.

Mr Bin Sulayem, who led a high-level delegation on the courtesy visit to the Malacanang Palace on Friday (July 13), said:

“We had a very successful meeting with Her Excellency, President Gloria Arroyo and we welcome the support she has promised to Dubai World’s involvement in infrastructure development programs in the Philippines. Dubai World sees immense potential for growth in this country and we will actively explore the investment opportunities that are emerging here. The Philippines market will be considered an important part of our growth strategy for Asia.”

Mr Bin Sulayem was accompanied on the palace visit by the UAE’s Ambassador to the Philippines, Mohammed Ibrahim Al Juwaid, Mohammed Sharaf, CEO, DP World, Peter Wong, DP World’s Asia Pacific Director, and Suhail Al Banna, Executive Vice President of DP World’s Asian Terminals.

Following meeting with the President in Manila, the Dubai World Chairman and other senior executives of DP World traveled to Cebu, where they attended a series of official functions.

Their discussions with Governor Garcia and her aides focused on building business relationships between the two sides.

Mr Bin Sulayem said:

“We are very excited about the prospects of our visit to the Philippines, especially to Cebu. We want to do something in this beautiful island, and strengthen the bonds between the UAE and the Philippines. During our talks we identified several potential areas for investment and we will be studying them in depth to develop viable investment options.”

During his visit Mr Bin Sulayem also addressed a business gathering organized by the Cebu Chamber of Commerce and Industry

Sinjin P.

July 16th, 2007, 05:46 AM

Real estate industry fears ‘consumer finance crisis’ (http://philstar.com/index.php?Business&p=52&type=2&sec=71&aid=20070715189)
By Ehda Dago-oc
Monday, July 16, 2007

While dollar earning Filipinos have caused the dynamic economy in the Philippines, the continued strengthening of the peso to the US dollar may cause a “consumer finance crisis” especially for real estate and retail.

In an economic briefing organized by China Trust (Philippines) Commercial Bank Corporation, Rolando Avante, the bank’s executive vice president and treasurer, warned that a growing concern on the declining of consumer demand, as OFWs are now keeping their money, instead of spending, due to the lesser value of their dollars.

Avante warned that in the middle-range real estate industry, wherein growth is fueled by the OFW market, a decline of demand in this particular segment is seen as dollar dominated income of Filipinos working abroad is now getting smaller, while they (OFWs) don’t get increases in the salaries.

Significantly, he said amortization of the real estate products does not change, and value of their income has declined, “it is worrisome, because OFW don’t get increases,” he warned.

Economic observers have seen a “red light” in the consumer demand for the Philippines, while the Philippine peso is seen to take stronger hold against the greenback.

He hopes that small and medium real estate developers have already taken their preparatory measures, in case consumer shock will happen.

For bigger developers on the other hand, he said these companies have already put in place preparatory shields if ever OFW market will take a slower movement.

The Philippine peso had already appreciated by 20 percent from P56 last year up to P45 levels these days. He said there is possibility that peso will continue to climb breaking P44 if the entry of dollar will not be well defended.

Aside from the growing entry of dollar remittances to the Philippines, there are also foreign bond investors, like the Japanese who are taking advantage of the strong peso, selling their yen to dollar dominated bonds, and invest it in the Philippines. This has pushed further the dollar reserves in the country.

Avante reported that in his own bank, they have three to four real estate developer clients, which have developments in middle-range housing projects, from P500,000 to P1 million, expressed observation of slower consumer demand from the OFW market.

The Philippine real estate industry, which has been affected heavily in the 1997 regional economic crisis, has experienced a rebound in the recent years, primarily because of the dollar-earning Filipino market.

He reiterated that the strong peso, although an indication of a good economic landscape in the Philippines in the macro level, could also triggered a slight fall down in the consumer demand—in the dollar-earning consumer based.

Generally, he said the Philippines is slowly building a good impression in the outside investors, because it has successfully taken out the “political risk” factor, meaning the environment much better, although it’s not yet the “ideal”.

tigidig14

July 16th, 2007, 07:10 AM

sa taas ng upa madaming magiging squatter sa pnas

-TC-

July 25th, 2007, 05:04 PM

ABCs of real estate investing (http://www.philstar.com/index.php?Real%20Estate&p=49&type=2&sec=37&aid=2007071971)

Philippine Star
Friday, July 20, 2007

A series of lectures on the different how to’s of Investing in Real Estate will be conducted by Urban Institute of Real Estate for prospective investors, developers, landowners and realty professionals who are expected to gain sufficient insights and confidence to finally implement proposed real estate investments. As real estate is now showing strong recovery, participants will learn the ABC’s of real estate principles and avoid costly mistakes that were normally suffered by inexperienced investors, and guiding them to a pleasant and successful real estate business.

Numerous issues concerning real estate investment such as opportunities, legal aspects, joint ventures, governmental rules, property management, taxation and marketing would be discussed in this series of seminars which would be conducted every Mondays and Wednesdays, 1:30 to 6 p.m., starting Aug. 8 to Sept. 10 at the Maximo Function Room, Second Floor, Max’s Restaurant, near exit of Glorietta 2, Ayala Center, Makati City.

The topics, which may be attended separately and are all stand alone are as follows:

Aug. 8 — Investing in Real Estate: Opportunities, Techniques & What are Needed to Learn before Investing;

Aug. 13 — Management of Rental Properties: How to Maximize Income of Rental Properties;

Aug. 15 – Joint Ventures and Syndications for Real Estate Projects;

Aug. 20 – Property Development Principles and Updates on HLURB Rules and Regulations;

Aug. 22 – Taxation of Real Estate Transactions;

Aug. 27 – How to Start and Manage A Successful Real Estate Brokerage Company;

Aug. 29 — How To’s of Real Estate Appraisal;

Sept. 3 — Real Estate Finance and Investment Analysis;

Sept. 5 — Making Big Money in Distressed Properties; and

Sept. 10 — Buying & Financing Your First Home.

This Lecture Series is accredited by DTI for CEP compliance and will have as lecturer Engr. Enrico Cruz, who has almost 40 years in real estate, engineering, construction, management and education. Cruz is also a licensed real estate consultant and 1st and 8th placer in the real estate appraiser’s and broker’s board examinations respectively, and was invested as a “Real Estate Fellow” by the Philippine Council of Real Estate Educators.

For other details or advance registration, Urban Institute may be reached a 681-0928 or 796-8019 or CP #0916-426-9174 OR CP No. 0921-683-9431 or by email at urbanet@pacific.net.ph.

3cr

July 27th, 2007, 10:35 AM

Court favors Parañaque government’s land claim
PhilStar
http://www.philstar.com/index.php?Metro&p=49&type=2&sec=26&aid=20070726140

Hundreds of informal settlers living on privately owned land in Parañaque City will soon be able to call their homes their own after a local court granted the city government a writ of possession in an expropriation case filed more than a year ago, Mayor Florencio Bernabe said yesterday.

He lauded the decision penned by Parañaque City Regional Trial Court (RTC) Branch 274 Judge Fortunito Madrona.

Some 200 families have been living on the 12,772-square meter property owned by Teoderico and Fidela Santos in Barangay Sto. Niño for the past 20 years.

“The property will be developed and subdivided into lots for distribution to the informal dwellers and ascertaining the legitimacy of the beneficiaries,” Bernabe said.

Madrona issued the writ of possession after 19 months of hearing, Bernabe’s petition to give the informal settlers the opportunity to own the land they have been occupying for 20 years.

Records show that the city government filed the petition in January 2006 and deposited P1,341,060, representing 15 percent of the property’s supposed value based on the tax declaration.

According to Bernabe, Madrona found that the city government sufficiently complied with the 1997 Rules of Civil Procedure and the Local Government Code in its bid to claim the land in behalf of the informal settlers.

Bernabe said the owners are still contesting the land valuation and are asking for a higher price, prompting the court to name commissioners who will look into the issue to ensure that the Santoses are justly compensated.

“Providing land to the city’s landless is one of my continuing priority programs designed to improve the quality of life of the disadvantaged sector and to stem one of the major causes of urban blight,” he said.

raf

July 27th, 2007, 07:14 PM

-TC-

July 30th, 2007, 06:22 AM

http://manilatimes.net/national/2007/july/30/yehey/business/20070730bus1.html
RP housing booms as US slumps
By Likha C. Cuevas-Miel, Reporter
Manila Times
July 30, 2007

REAL-estate agent Letty (name withheld upon request) was driving home after a long day when her cell phone rang. The caller was interested in
buying.

Houses and lots sell like hotcakes these days in the Philippines, in stark contrast to the United States, where a failing sub prime mortgage market has sent financial markets worldwide reeling.

The Philippine property market is booming, as can be seen by surging profits in blue-chip industry players like Megaworld Corp., which last week reported a 67-percent surge in profits on the back of scorching real-estate sales.

In a span of two months, Letty, for example, sold last year an P8.5-million 5-bedroom house and a 3-bedroom townhouse worth P4 million in a subdivision in Pasig. The buyers of both houses are relatives and dollars from abroad helped finance the acquisitions.

“About 80 percent of my clients are OFWs or Filipinos abroad who decide to buy permanent houses here,” she said. “It’s like the old times but the buyers are different.”

Before the financial crisis that crippled the Philippines and the rest of Asia, Letty was closing deals at an average of P5 million a month.

She started selling properties in 1997. It was the perfect time to be a real-estate agent.

Then in July that year, the peso wobbled and fell against the US dollar, while the local stock market came crashing down.

The effect of the crisis was not felt immediately—at least in Letty’s case—as she continued to sell properties through the rest of the year.

However, demand for housing slowed to a crawl in the years that followed, sending fellow agents looking for greener pastures.

“The problem was that most of my buyers were investors, not end-users.
When financial problems came, nobody wanted to buy properties anymore,” Letty said.

She wasn’t alone. Based on gross value added, the property sector still grew by 3.8 percent in 1997.

It then slowed to 1.6 percent and 0.6 percent in 1998 and 1999, respectively, before halting in 2000. The following year, the industry contracted.

Gonzalo Bongolan, Home Guaranty Corp. (HGC) president, said there was a glut in the real-estate sector after the Asian crisis so there was really no point in building more homes.

“They were just selling off the rest of the inventory [and] that’s the reason why the industry was slow to react. It had a lag time,” said the former stock market analyst.

With People Power 2 and 3 creating an unsavory investment environment, it was not surprising that people were afraid to buy houses. At that time, state-run HGC also suffered from heavy default rates of as high as 10 percent in the late 90s, from which it had failed to recover in the ensuing years.

Another problem the industry encountered just before and right after the crisis hit was a narrow market.

According to Alejandro Mañalac, Eton Properties executive sales director, the end-user buyers then were Chinese-Filipinos, who had the money then.

So the small market for end-users invited speculators.

The situation was compounded by the presence of small developers who wanted to ride on the boom, which in turn led to a supply glut. “After the smoke [the crisis] cleared only the big ones were left. Those with more credibility,” Mañalac said.

The executive said the current cycle of high property demand is different, with the near-absence of speculators and wider market reach courtesy of new technology.

With the advent of the Internet and cellular communication, sellers are now able to extend their services to Filipinos abroad and even to foreigners who want to buy properties where they could retire.

“Those [OFWs] who left 10 [to] 18 years [ago] have come back [and] they have money right now. They’re ready to buy a house, they’re ready to retire. We have a maturing market,” Mañalac said.

First-time homeowners also abound in the market, driving the demand for condominium units that big and small developers are only too happy to fill, he said. So they are now building left and right.

Despite the dramatic increase in construction, a bubble is not yet on the horizon since supply still lags demand, Eric Cruz, executive vice-president of engineering and construction firm FF Cruz & Co., said.

“The bubble bursts only when investors are not able to dispose of their property and that scenario is remote,” he said.

He said that for the industry to experience a longer bull cycle, there must be more programs to help minimum wage earners afford houses.

Cielito Habito, Ateneo de Manila University economics professor, said the business-process outsourcing (BPO) industry is supporting the real property boom, which was absent in the pre-Asian crisis cycle.

And the boom is fundamentally supported as “all the other economic circumstances would point to relatively low interest rates, which drive real estate,” he said.

The industry will likely stay afloat for a while since property prices just started to pick-up, according to Colliers International, citing reflated land values in the Philippines.

“After six years of continuous decline, we believe that land value appreciation is justified by increased pricing power of developers in both office and residential segments,” the property consultant said.

Other factors pointing to an up trend are the “impressive” take-up in residential presales market, and the prelease take-up in the office market “considering that Manila has not historically been a strong prelease market.”

Industry insiders said the boom started last year, while others said it’s this year as the country is still seeing the onset of a bull market. However, many are cautious about pinning a date on when the party will die down.

For the meantime, Letty is just happy to assist clients who are house-hunting from one subdivision to another. And she is not alone.

“About 50 percent of those who left [after the crisis] already came back,” she said.

So happy times are here again.

3cr

August 1st, 2007, 12:52 PM

No to boom and bust
By Mary Ann Ll. Reyes
PhilStar
http://www.philstar.com/index.php?Business&p=49&type=2&sec=27&aid=2007073179

I had an interesting talk with Federal Land president Alfred Ty, younger son of banking, real estate, and automobile tycoon George Ty, who shared with us valuable insights about the state of the real property sector in the country.

Alfred, who is just slightly older than the 35-year-old company which he now heads (Federal Homes started in July 1972 and became Federal Land in 2002), disagrees with the notion that the property sector has a 10-year cycle and since the current boom started eight years ago, then we should be at the tail end.

Don’t be fooled by Alfred’s youth though. As corporate secretary of Metrobank, vice-chairman of Toyota Motors Philippines, and president of the Metrobank Group’s property arm, Alfred definitely knows what he’s talking about. His wearing several hats gives him the distinct advantage of seeing the business from different perspectives.

We can’t help but commiserate with pessimists who believe that the good times are about to end. After all, these are people who lost their shirts in the ‘90s when the real estate bubble burst.

But Alfred thinks otherwise. After all, he wouldn’t be investing P8 billion (initial investment in at least 10 new projects) over the next 12 months, and much more in the next few years (one of his projects is estimated to cost at least P20 billion) if he doesn’t believe that the fundamentals are strong and sound.

Assuming that there indeed is a 10-year cycle, he believes that this can definitely be extended for a longer period by government putting into place the needed policy environment.

Of course, the pessimists (victims of the ‘90s real estate disaster) may have failed to take into account the fact that the banks are healthier, more liquid, and are focusing on consumer lending, that developers are becoming more resourceful in tapping new markets here and abroad, that the Philippines is becoming a call center and BPO haven, and of course the phenomenon that is OFW remittances. Many of these were not present in the ‘90s.

There are more sectors (banking for one) that are investing in the real estate sector. More than 10 percent of OFW remittances is spent for buying real property. Almost all the big names in business have joined the property bandwagon. These are people who are not going to risk their names, reputation, and capital. Without doubt, the local property sector will be here for the long run.

3cr

August 2nd, 2007, 11:31 AM

Philrealty eyes debt-equity swap with creditors
By Zinnia B. Dela Peña
PhilStar
http://www.philstar.com/index.php?Business&p=49&type=2&sec=27&aid=2007080140

Philippine Realty & Holdings Corp. (Philrealty) is looking at converting creditors’ debt into equity in the listed property firm.

Philrealty president Amador C. Bacani said the company’s debt has been reduced to P609 million from P829 million last year.

He said the property development firm is also negotiating for a P350 million loan to finance the resumption of work at its Andrea North Skyline Tower.

Bacani said the company would need P900 million to finish the Skyline Tower, expecting this project to be completed by the end of next year.

He said Philrealty is also considering selling some assets, including the 2,800-square meter lot in Fort Bonifacio, Taguig and other properties in the provinces, to complete the construction of Andrea North Skyline.

Additional funding for the project will also come from pre-selling of residential units.

He said the company will continue to undertake measures aimed at reducing its debt to a more manageable level.

Bacani said the second tower of Icon Residences at the Fort Bonifacio Global City — its joint venture with Excell Property Ventures Inc. — is already 75 percent sold. Construction of the substructure started in January this year with Tower 1 scheduled for completion by mid-2007 and Tower 2 by 2009.

“With the prevailing favorable economic environment, which appear to be sustainable provided progress in containing the government’s budget deficit continues, we are also re-evaluating the company’s other projects which were deferred because of the crises that confronted us. Once market confidence is regained with the resumption of work at the Skyline Tower, we shall aim to recover our former standing in the real estate industry with a record of delivering trendsetting landmark projects,” Bacani said.

Since 1998, Philrealty has offered land properties to banks as payment for its obligations through dacion en pago to substantially reduce its obligations.

3cr

August 16th, 2007, 10:39 AM

Philippines seen leading property boom in Asia
By Ronnel Domingo
Inquirer
http://business.inquirer.net/money/breakingnews/view_article.php?article_id=82908

A global boom in housing prices has put the Philippines in the lead of an Asian rally as of the first quarter, according to a study made by online research firm Global Property Guide.

The study considered property prices as end-March, covering 27 countries and territories, including nine in the Asia-Pacific region.

Research findings show that first-quarter nominal prices in the Philippines rose 14.29 percent compared to year-ago level, higher than 13.75 percent in Singapore.

South Korea, where prices jumped 11.64 percent, completes a troika of markets in the Asia-Pacific region that showed year-on-year improvement as well as two-digit growths.

Still, Singapore led the region in terms of real price improvements, registering an increase of 13.19 percent year-on-year.

Philippine prices went up 10.04 percent while those in South Korea jumped by 9.36 percent.

“The house price boom is now moving toward Asia-Pacific,” the GPP study said. “Property prices in countries affected by the Asian crisis are showing strong signs of recovery, prompting fears that a property bubble is developing anew in the region.”

Global Property Guide senior economist Prince Christian Cruz said the current economic and monetary conditions suggest continued strong demand for housing in countries affected by the crisis.

“All economies affected by the Asian crisis grew by five percent in 2006,” Cruz said.

“GDP growth from 2002 to 2006 has been stronger than during the crisis period (1997 to 2001), although still slower compared to [the few years before the crisis set in],” he added.

Cruz said income per person in Indonesia, Hong Kong, South Korea and the Philippines were at an all time high. Here, the rate of increase was placed at 24 percent.

Global Property Guide said the Philippine real estate sector started its recovery in 2004, boosted by the business process outsourcing industry.

It added that with growing demand from overseas-based Filipinos, condominium projects were rising all over Manila and condominium prices and rents were going up.

Also, demand for office space for call centers and other business process outsourcing operations sparked the revival of the sector.

3cr

August 19th, 2007, 11:57 AM

Special Feature: 2nd Quarter Real Estate Report

(Business World (Philippines) Via Thomson Dialog NewsEdge) Water levels may have gone up this rainy season, raising the alarm bells for some sectors. But for the resilient real estate industry, which is now awash with investments, the rainy spell does not bring on the blues as the sector awaits to be flooded with more projects.

Having posted significant growth in the past four years, the local property sector looks more bent than ever in beating the dry spell that ravaged the industry in the late 1990s.

In the past two weeks alone, Eton Properties, Inc. launched the 41- storey Eton Emerald Lofts, Rockwell Land Corp. started the construction for the much-anticipated Number One Rockwell, DMCI Homes partnered with Equitable PCI Bank in developing the Riverside Residences, and One Asia Development Corp. jump-started its P100-million business park in Binan, Laguna.

Despite the storm of new projects, David Leechiu, president and general manager of property consultancy firm Leechiu & Associates, insists that supply across all segments remains tight, a lack that at this rate is expected to be relieved no sooner than by June next year.

Coupled with a corresponding deficit in quality stock, these factors are mainly responsible for the escalation of rent values in prime locations, although a widespread increase in land values is yet to be seen.

"Prices have stayed generally flat across Metro Manila and we are nowhere near pre-crisis values yet except in Fort Bonifacio, which makes it the safest place to invest in at the moment," Mr. Leechiu said.

Land values at Fort Bonifacio in Taguig dropped by as much as 50% in the 1997 crisis but have seen a hundred percent increase since the Bonifacio West Development Corp. -a joint venture of Greenfield Development Corp. and Ayala Land Corp. - took over its development, making the area the country's top sales performer in recent months.

Of the central business districts, Makati still holds the prime spot, with average asking prices ranging from P250,000 to P300,000 per square meter. Ortigas, which reached a low of P90,000 per square meter from a peak of P180,000 per square meter in 1997, is now trading between P110,000 and P120,000 per square meter, Mr. Leechiu said.

Despite its 100% occupancy rate in office space, Fort Bonifacio, remains comparatively cheap at P175,000 to P215,000 per square meter, making it a favorite alternative to the Makati central business district.

"We now see a lot of migration to Fort Bonifacio in all segments. Being in close proximity to Makati, many locators choose Fort Bonifacio because it has a well-planned, well-constructed environment that is only one step away from the Makati facilities that they have gotten used to," he said.

According to the latest Colliers International Philippine Property Overview, there had been a 20% increase in office space rents in the second quarter due primarily to the dearth of quality office supply, a factor that has hindered companies from opening businesses in the country since 2005.

Monthly lease rates for premium office space in Makati are now at the P1,200-per-square meter level while Fort Bonifacio is up to P750 per square meter. Meanwhile, for other districts, monthly lease rates are still at the P400- to P600-per-square meter transaction range.

Mr. Leechiu has pegged Fort Bonifacio's annual rate increase at seven to eight percent for the next three to four years, while Makati accrual is calculated at five percent for the next two to three years before slowing down to two percent.

As available space in these two areas will continue to be limited, a significant amount of future office space supply can be found from emerging business districts such as Eastwood City, Binondo and Old Manila.

Next year will bring good news to the business process outsourcing (BPO) sector, which continues to be the main driver for office space demand, as the number of available supply coming on-stream will double towards the third and fourth quarter, offering more quality stock to choose from.

Tight supply in commercial space will be slightly relieved with the completion of the Ayala Center Building Glorietta 5 and the Dela Rosa e- Services Building in Makati, the Total Corporate Center in Fort Bonifacio, and the One E-Com Center at the SM Central Business Park in the Bay area before mid-2008.

Residential development

And as Metro Manila population continues to increase, condo living is fast becoming the habitat of choice for reasons of cost and practicability.

An estimated 23,000 units is due for completion before 2010, 60% of which will be situated in Fort Bonifacio and Makati, with the remaining 40% scattered across Quezon City, Mandaluyong, Las Pinas and other Metro Manila districts. A big chunk of supply will cater to mid to upper market, while small percentage of the total is targeted for the low-end market.

The steady inflow of overseas foreign worker (OFW) remittances, now reaching all-time highs, assures the continuance of strong demand in the residential market.

"Lately, we have seen a shift from semi-skilled workers to high-end professionals leaving the country to work abroad and despite their high- paying jobs, they are still not covered by expatriate packages where the company pays for the whole family's expenses. This in turn becomes a good motivator for OFWs to continue sending money to the Philippines," Mr. Leechiu pointed out.

Single-digit mortgage rates and easier payment schemes will result in more retail purchases from the middle class in the years to come. For professionals, Mr. Leechiu said there's a growing preference for centrally located condominium units over suburban houses in distant locations such as Las Pinas and Rizal.

Another significant source of investment demand are the local families who had parked money abroad during the Asian financial slump, but are now pre-terminating their placements and transferring them back to the Philippines.

Despite visible demand and propitious property forecasts, Mr. Leechiu warns developers against building too much stock. With debt restructuring being made available to developers both big and small, real estate corporations have been able to raise bonds at a much lower rate.

"These companies have done IPOs or secondary or even third offerings and raised a lot of cash through the stock market. They've been able to joint venture with other institutional big players. This means that there is a lot of money flowing into the system," he said.

Instead, Mr. Leechiu reminds developers to consciously watch the demand and supply situation.

[I]Copyright 2007 Business World Publishing Corporation, Source: The Financial Times Limited

3cr

August 21st, 2007, 11:08 AM

PSE supports credit bureaus
By Zinnia B. Dela Peña
PhilStar
http://www.philstar.com/index.php?Business&p=49&type=2&sec=27&aid=2007082046

Amid a global sell-off in stocks triggered by increasing uneasiness on the mortgage and corporate lending markets in the US, the Philippine Stock Exchange (PSE) is seeking the passage of the Credit Information System Act (CISA) to further strengthen the country’s financial system.

The CISA aims to put in place an extensive and reliable system for the collection and dissemination of fair and accurate credit information to promote and support credit-based economic activities. The proposed measure, authored by Sen. Edgardo Angara, is now pending in the Senate.

PSE president and chief executive officer Francis Lim said the proposed legislation will help the country steer away from the subprime lending problem that the US is facing.

Under the proposal, a credit information corporation will be established to consolidate credit-related data that banks, their affiliates and subsidiaries are legally mandated to submit.

Credit bureaus will be able to serve as reliable source of information to allow lenders to accurately evaluate risks and select between credit-worthy and poor-quality borrowers.

Financial markets worldwide tumbled last week as investors fret over the increasing loan defaults among subprime borrowers. With the exodus of foreign funds in the PSE, the market has wiped out all its gains for the year.

Lim, however, believes that the local stock market remains fundamentally sound.

“We in the PSE remain confident that, notwithstanding the PSE’s setback, our stock market still stands on solid macro-economic ground. Our listed companies remain profitable; interest rates, along with inflation rates, remain stable while the country’s economic growth forecasts look attainable. So we have no reason to doubt the strong fundamentals supporting our stock market,” he said.

Lim pointed out that the Philippine financial market does not face a risk similar to what is confronting the US stock market.

He said the Philippines needs the CISA just to make sure its financial system can count on an additional layer of support if global repercussions from the US sub-prime lending problem were to linger.

“Nevertheless, the proposed CISA will lessen the likelihood of such loan defaults by making the credit investigation process less tedious and less costly while at the same time, increasing the accuracy of credit information to a reliable level,” Lim said.

Subprime loans represent borrowings of persons with blemished or poor credit histories. The loans, which carry higher interest rates, often expose the lenders to higher credit risks.

“An unreliable credit information system also stifles economic growth because it reinforces the sense of distrust of banks to extend loans. But if the banks are sure that a client is credit-worthy, then they will not entertain doubts about approving a loan; and more money will flow to those who need it, creating more economic activity,” Lim said.

______________________________

Bourse wants Angara bill passed to cushion crisis
Daily Tribune
http://www.tribune.net.ph/business/20070821bus1.html

The local stock market sounded an appeal yesterday for legislative rescue amid the turbulence in global financial markets by approving a proposed law designed to lessen credit risks and loan defaults.

In a press statement, the Philippine Stock Exchange (PSE) said it is seeking urgent help from lawmakers to stabilize the local stock market.

PSE president Francis Lim said the enactment of the proposed Credit Information System Act (Cisa) will help the country steer away from the sub-prime lending problem now bothering the US.

The proposed Cisa, which is authored by Sen. Edgardo Angara, is now pending in the Senate.

Local financial markets were closed yesterday for a public holiday. Trading resumes today.

Analysts said trading today will take its cue from the US stock market amid the continuing global concerns over the credit problems in the United States.

They said the local bourse had failed to react to favorable local news as investors remain too caught up in fears over the tightening of the global credit market due to problems in the US housing market.

For the week to Aug. 17, the composite index fell 12.1 percent to 2,884.34 points, its lowest finish since Dec. 27 last year.

Average daily turnover fell to 3.26 billion shares worth P4.3 billion from 4.36-billion shares worth P5 billion in the previous week.

“The Dow Jones industrial average is close to an important support level at 12,800 level. A rebound in the US market will propel the local market back above 3,000,” forecast Jose Vistan of AB Capital Securities.

But he warned that “a break of the 12,800 support (level) can have disastrous consequences.”

Asian markets, alongside global markets elsewhere in the world, have been sold-off since late July when the sub-prime problems associated with risky home loans first became evident through losses to major New York hedge funds.

Falls on the stock markets have accelerated since then, when most benchmarks were trading at record or multi year-highs.

Dealers, however, remain uncertain how far the markets can go before bottoming out because many feel the full extent of the sub-prime problems is yet to be made public.

Major stock exchanges all over the world, including the local bourse, started suffering from massive sell-offs, triggered by nervous investors, after US lenders noted an increase in loan defaults among sub-prime borrowers. The selling frenzy has wiped out the record-breaking gains this year of the PSEi, the main barometer of local stock price movements.

“The PSE remain confident that, notwithstanding the PSEi’s setback, the stock market still stands on solid macro-economic ground,” Lim pointed out. “Our listed companies remain profitable; interest rates, along with inflation rates, remain stable; while the country’s economic growth forecasts look attainable. So we have no reason to doubt the strong fundamentals supporting our stock market,” Lim said.

“But we need Cisa just to make sure our financial system can count on an additional layer of support as buffer, if global repercussions from the US sub-prime lending problem were to linger,” Lim stressed.

Sub-prime loans represent borrowings of persons with blemished or limited credit histories. The loans, which carry higher interest rates, often expose the lenders to higher credit risks.

The US stock market started to suffer late last month from massive sell-offs due to concerns over the sub-prime mortgage market following the collapse of big US hedge funds with heavy investments in doubtful sub-prime mortgages. The collapse of the hedge funds prompted major credit rating agencies to downgrade sub-prime mortgage securities.

“Let me stress that our financial market does not face a risk similar to what is confronting our US counterpart,” Lim pointed out. “Nevertheless, the proposed Cisa will lessen the likelihood of such loan defaults by making the credit investigation process less tedious and less costly, while at the same time, increasing the accuracy of credit information to a reliable level.

“Gathering accurate information about a borrower lessens the likelihood of a dreaded business problem in the form of a loan default,” Lim explained. “So, if we liken the US sub-prime lending problem to an ailment, then the Cisa will be a welcome vaccine that the lawmakers will be administering on our credit information system,” Lim explained.

“More than ever, we need such a vaccine shot so we can lessen chances that a crisis similar to what hit US will afflict our financial system,” he explained. “Definitely, the image and fundamentals of our stock market will be affected, if our banks suffer a similar increase in loan defaults.”

Cisa will create the Credit Information Corporation (CIC), which will set the standards for credit reporting operations. The CIC’s goal is to improve the availability and cost of credit to borrowers while greatly reducing the lender’s credit risk, resulting in a more stable and consistent financial system.

-TC-

August 29th, 2007, 07:37 PM

http://business.inquirer.net/money/topstories/view_article.php?article_id=85314

Ayala Land bullish on prospects despite US sub-prime woes
By Rocel Felix
08/29/2007

MANILA, Philippines -- Ayala land Inc., the Philippines' biggest real estate developer, said it remains bullish on the prospects of the local property sector despite prevailing worry over possible further fallout from the US sub-prime mortgage crisis.

The optimism is due to its robust domestic sales and an expanding market mostly made up of overseas Filipino workers, company officials said.

"Our operating results are on track and healthy (and) the market is moving in our favor," Ayala Land president and chief executive Jaime Ayala told stockholders' at a special meeting Tuesday.

He said the company is watching developments in the US sub-prime sector to determine if this would make a direct impact on sales to Filipinos working and residing in the US.

"We are closely watching it with respect to our OFW (overseas Filipino workers) market. Some of our potential buyers may have existing mortgages, but since these problems are quite recent, we haven't assessed what it would mean for our future sales."

Filipinos working abroad send home at least $1.0 billion in remittances every month. In the first half of this year, remittances rose 18.1 percent from a year earlier to a record $7.0 billion.

While the US is a significant market for Ayala Land, chief finance officer Jaime Ysmael said the company's residential projects are expected to continue enjoying a high take-up rate despite the current sub-prime problems in the US.

"We have a highly diversified market not just in the US but also in Europe and the Middle East. Besides, US sales are focused on the upscale market," said Ysmael.

"If the US problem drags on, we can still count on our growing overseas markets elsewhere."

In the near-term, Filipinos living and working in the US will likely wait for the sub-prime turmoil to subside before making firm investments in the Philippine property sector, said Delfin Lazaro, Ayala board director and chief finance officer of parent company Ayala Corp.

"Because of the ongoing uncertainty, there may be a little bit of reluctance among Filipinos in the US to make big commitments. We can expect a period when people will be more cautious and (would rather) wait to see how the situation will play out before they make a judgment call," said Lazaro.

In recent years, Ayala Land's offshore sales, mostly to OFWs, accounted for 37 percent of its residential sales.

Its ongoing construction of new high-end residential projects and the expansion of mall and office spaces has also generated strong foreign investor interest.

This has prompted Ayala Land to set a stock rights offer of 13 billion preferred shares from September 10-14.

Ayala Land has yet to set the offer price.

The preferred shares will be non-voting, non-cumulative and will not be listed on the stock exchange.

"The preferred share offering will address the foreign ownership limit of 40 percent since we are already nearing that cap," said Ayala Land chairman Fernando Zobel de Ayala.

"This is an accepted mechanism to address the issue. Foreign investors should be able to freely and actively trade, and move in and out in a very large way, otherwise they will lose interest in the stock," Zobel de Ayala said.

He said the preferred share offering has been getting "fairly positive feedback" from foreign institutional investors, without elaborating.

=========================================================
http://business.inquirer.net/money/breakingnews/view_article.php?article_id=85301

Despite US subprime crisis, firm launches Makati condo
Inquirer
08/29/2007

Real estate developer Century Properties Inc. launched Tuesday its Gramercy Residences high-end condominium project in its Century City development on Kalayaan Avenue in Makati City, saying it expected demand for its projects to remain firm despite the subprime credit crisis in the United States.

Its chairman Jose Eduardo Antonio said the company was counting on the changing nature of property buyers, which he said had evolved significantly from before the 1997 East Asian financial crisis.

“In 1997, most buyers were speculative," Antonio said. "They bought like stocks on the stock market. Today, most of our buyers are end-users.”

He added that Century Properties had a “very strong foundation of buyers" especially from overseas that it could rely on to see the project through.

“Many of our buyers are expatriate Filipinos or retirees,” he said. “Our sales are not affected by the credit concerns abroad.”

Prices at the company’s Gramercy Residences range from P2.6 million to P18.0 million, for sizes of 26 square meters for studio units to 160 square meters for three-bedroom loft-type units.

Century Properties chief operating officer Jose Victor Antonio said total project cost was expected to reach P5.5 billion, which he said would come from internally generated funds.

Gramercy will have at least 65 floors. It will have 1,000 units in flat and loft configurations.

Groundbreaking is planned for the fourth quarter of 2007.

chocolato1000

August 30th, 2007, 10:59 AM

US subprime woes seen eating into RP banks’ profits

Credit-linked notes invested in RP bonds

By Doris Dumlao
Inquirer
Last updated 03:47am (Mla time) 08/30/2007

The global financial market volatility triggered by the US credit crunch is expected to depress Philippine banks’ gains from treasury operations and eat into their overall profitability in the third quarter.

And the pressure is not coming not from collateralized debt obligations (CDOs), but from another type of structured product called credit-linked notes, or CLNs, that are heavily invested in the Philippine government’s foreign currency-denominated bonds, referred to as "ROPs."

“The problem is with these CLNs whose valuations have gone down and this will be reflected when we do the marking-to-market,” one banker said.

“The first semester is good but the third quarter is really bad,” the banker said.

CDOs are a type of security backed by assets and a structured credit product that serves as an important funding vehicle for portfolio investments in risky assets like the subprime mortgage market in the United States.

Although CDOs comprise less than two percent of the banking system’s total assets, based on central bank data, the sector has a big exposure to many other instruments that are heavily invested in ROPs.

Poor market sentiment triggered by the problematic subprime mortgage market in the US has weighed down on the values of ROPs and other emerging market IOUs.

“There will surely be an impact on profitability but how big or how large the impact will be, the BSP [Bangko Sentral ng Pilipinas, the central bank] still has to evaluate that,” BSP Deputy Governor Diwa Guinigundo said.

“But as the market digests all the news, their action in the end will be to go back to fundamentals,” he said.

He said that with the country’s improved fiscal position, rising foreign reserves and external surpluses, which indicate a capability to repay foreign obligations, foreign investors would again warm up to Philippine investments.

Offering some relief from turbulent global markets and tougher banking regulations, the Philippine government is drawing up a new mechanism to help domestic holders of ROPs shift to peso-denominated assets.

The conversion scheme aims to keep the ROPs attractive to residents, especially to the banking system’s foreign currency deposit units (FCDUs) given this year’s implementation by the Bangko Sentral ng Pilipinas of stiffer capital adequacy requirements, Finance Undersecretary Roberto Tan said.

He noted that the national government and the BSP were now working together to study the dollar-to-peso risk conversion mechanism, which will be unlike global bond swaps pursued in the past. The government hopes to finalize and implement the scheme within this year.

According to estimates by the International Monetary Fund last year, more than 80 percent of domestically held ROPs were with the banking system.

The high “home bias,” or domestic ownership, of foreign-currency bonds issued by the government has somehow reduced the volatility of ROPs over the years, but the same exposure could cause potential balance sheet vulnerabilities in times of offshore market turmoil, the IMF warned.

3cr

September 1st, 2007, 10:59 AM

RP banks’ health improving but threats remain — Fitch
Daily Tribune
http://www.tribune.net.ph/business/20070831bus3.html

London-based credit watchdog Fitch Ratings noted local banks’ improved financial health due to better asset quality and enhanced capitalization over the past 18 months.

In a statement, Fitch said improvement of asset quality of Philippine banks was due mainly to disposal of non-performing loans (NPLs) and some foreclosed properties, rising property prices on the remaining foreclosed properties, greater provisioning and balance-sheet growth.

“Most banks have satisfactorily provided for NPLs, particularly given that deterioration in loan quality is unlikely, owing to limited loan growth in recent years and generally benign economic outlook,” it said.

It, however, noted that provisioning for foreclosed properties remains low.

Prices of high-quality commercial office spaces and higher-end residences are increasing, it said, but “price growth has not been so great in other markets, where much of the banks’ assets lie.”

It further said “in addition, many banks still maintain a significant amount of other assets that are either impaired or of questionable value, including deferred losses subordinated debt issued by special purpose vehicles (SPVs) that purchased such NPLs and foreclosed properties, goodwill, and deferred tax assets.”

Thus, the agency expects local banks’ financial health to “come under some pressure.”

Fitch said even if some banks were able to raise common and/or hybrid capital as well as subordinated debt due to upbeat equity and debt markets “assets quality remains a key challenge for a number of banks.”

“Some weaker banks may necessitate additional capital raisings,” it pointed out.

In terms of profitability, the agency said banks’ margin remain high as most banks continue to earn from their large holdings of long-term, fixed-rate government debt papers as well as fee income from various services and products particularly remittance service and trust sales.

The agency, however, said “they (banks’ profitability) have been decreasing as a result of rising competition and a declining interest rate environment.”

“Fitch expects that earnings are likely to come under some pressure given the steepening yield curve,” it said.

-TC-

September 9th, 2007, 06:44 PM

http://showbizandstyle.inquirer.net/lifestyle/lifestyle/view_article.php?article_id=87381

Be secure with developer before settling in
By Tessa Salazar
Inquirer
09/08/2007

MANILA, Philippines—Property experts note that aside from “good sign” the deluge of condo developments brings for the Philippine property market, it gives prospective buyers more choices in terms of size, design, location and price.

Global Property Guide’s chief economist Prince Christian R. Cruz notes that the more options available, the better it is for buyers.

Richard Raymundo, Colliers International’s director for research and consultancy, says that as with other industries, a more robust property sector would contribute more to the economy and also increase property values. He also says another positive result of a property sector boom is increased employment for the construction outfits.

Good track record

But are low-priced condominium developments enough for you to “bite the bait,” so to speak? Without driving you back to overpriced condo units from reputable developers, experts remind Filipino condo unit buyers not to commit the common mistake of buyers in the past. If you’re considering buying from condo developers without proven track records, don’t just take their word for it. Investigate.

“Residential units are sold on a preselling basis in the Philippines. Buying from a developer with a good track record gives an assurance that it will be delivered on time and with the quality agreed on,” Raymundo advises.

Buying a condominium in the Philippines “is very tricky,” Cruz notes, and he reminds buyers to seek first the developer’s track record in terms of reliability, service and quality.

“The company’s reputation in terms of structural design is very important. It is easy to check the size and layout of condo units, but to check whether substandard materials were used or that the building can withstand typhoons and earthquakes is difficult.”

Cruz stresses that the Philippines is located along the Pacific Ring of Fire, where earthquakes and volcanic eruptions constantly threaten the land. “Completely surrounded by water, we are also under constant threat of typhoons and flood.”

Life of a condo

Cruz says the building’s life actually depends on its structural design and maintenance. “In other countries, a well-maintained building can last up to 100 years without any major renovations or repair. In the Philippines, a building’s life span is probably shorter due to harsher environmental conditions.”

He adds that condominiums are set like a corporation. What the unit owner actually owns are shares to the corporation proportional to the unit’s size. Contrary to popular belief, the owner does not lose ownership of the unit after 50 years, according to the Condominium Act (RA 4726). The owner of a condo unit as a shareholder in a company has a say on what would be done to the condominium building.

Association dues

Raymundo says a condominium is run under a condominium corporation.

“That is why there are condominium unit owners’ meetings held to decide on issues like property management, special capital expenditure, condominium rules and regulations. This said, the financial position and how the association dues are arrived at have to be transparent to all condominium owners.”

Cruz says that as the condominium building gets older, association dues used for maintenance typically gets higher.

“If unit owners feel that association dues are too high, they have the right to see the company’s audited financial statement. They should remember that they are not mere tenants in the building, they are stockholders. The property manager should serve at the owners’ pleasure and not the other way around. Active participation in the condominium board could prevent this from happening in the first place.

Ask, ask, ask some more

Cruz says condo buyers should ask questions, not just from the real estate agent and the developer, but more importantly, from prospective neighbors. These include other condo owners and people within the locality.

“They know if it floods in the area, if there are serious peace and order problems, or if the garbage is regularly collected. These are simple things that are often neglected but are very essential.”

What rights do condo unit owners have after the building has lived out its supposed life span? How would an owner know if association dues are used properly? Questions like these have to be answered even early on.

Raymundo says that each building owner has a proportionate right to the land on which the building stands. Once the building is economically obsolete, the land, however, retains value.

“The property can be redeveloped with each unit owner having a proportionate right or share in the land value. For example, if there is a 10,000-sq-m condominium and Owner A owns 5,000 sq m, Owner A has a right to 50 percent of the land and its value,” Raymundo says.

Some condominium developers experience difficulties forecasting market demand, Cruz says. According to him, not all developers conduct a proper market study before building a condo building. Since there are always chronological gaps between planning, construction and marketing, several factors such as customer preferences, economic conditions and construction costs, may change.

“There can be a mismatch between what is available and what is demanded, especially in terms of unit sizes. While this can be remedied by merging or dividing units, this is costly and can affect the building’s structural integrity,” Cruz reminds.

tough

September 11th, 2007, 09:40 PM

Buying real property in RP like living in a first-world country at third-world prices

Cagayan de Oro City (11 September) -- One of the world's largest shipping companies, Bejing-based China Ocean Shipping Co., is studying whether to build a multi billion- dollar cargo hub near Manila, company officials say.

This, as the South Korean shipbuilder Hanjin Heavy Industries & Construction Co. is investing $1.7 billion in a new shipyard at a former US Naval Base in Subic Bay attracted by the skilled, English-speaking work force and low costs offered by our coutrymen.

Meanwhile, James Hookway, in his article "For Philippine Economy, Harsh Remedies Pay Off: A Risky Tax Increase by Arroyo Helps Spur New Investments" published by the Wall Street Journal Asia in Aug. 13, 2007, said more than 10 million Filipino expatriates working abroad have taken notice.

"They are now sending home $14 billion a year, double of what they sent five years ago, as government figures indicate," he said.

Economists see this as a relatively secure source of revenue. While 35% of these expatriates work in the US, there are also large pockets in Europe, the Middle East and East Asia. That geographical diversity could provide some insulation against a downturn in the US.

Hookway said the remittances aren't just going to support families, but into the stock market and property investments.

In fact, Ayala Land, one of the country's biggest real-estate companies, says that in 2006, 37% of their revenue came from Filipinos overseas buying land and condominiums, up from 26% the year before and just 16% in 2004.

Recently, the company's chief financial officer, Jaime Ysmael, told shareholders that if economic problems in the US deepen, Ayala Land can still count on Filipinos working in Europe and the Middle East.

Norma Ravanzo, a 58-year old retired nurse from Houston, is one such investor. An American citizen for more than 30 years, Ravanzo is planning to return to her homeland with her husband, who was also born in the Philippines.

Encouraged by the economic progress and improving living condition, she bought property in Cebu City, Manila's financial district and a retirement home in Subic Bay. "It's like living in a first-world community at third-world prices," Ravanzo describes. (PIA 10)

Philippine Information Agency (http://www.pia.gov.ph/?m=12&fi=p070911.htm&no=58)

-TC-

September 17th, 2007, 03:14 PM

http://business.inquirer.net/money/breakingnews/view_article.php?article_id=88915

Banks' property loans rise 3.8% to P218B

By Doris Dumlao
Inquirer
09/16/2007

WITH PROPERTY prices rebounding a decade after the Asian currency crisis, Philippine banks are becoming more confident of increasing their exposure in the real estate sector, whether in the form of loans backed by property assets or securities issued by property developers.

Real estate exposure of commercial banks grew 3.8 percent to P218 billion in the second quarter from a year ago as real estate-backed loans increased by P7.7 billion, the Bangko Sentral ng Pilipinas reported on Friday.

Compared to a quarter ago, total exposure also expanded by about 3.8 percent from the P210 billion in real estate-backed assets in their books as of end-March. During the same period, banks' investments in securities issued by real estate companies grew by P200 million.

The majority or 96.5 percent of total real estate loans were held by the bank proper while the remaining 3.5 percent represented assets managed by their trust departments.

"The expansion was driven mainly by the bank proper, where several banks posted net increases in their real estate loans during the quarter, mostly due to new loan releases to property developers," the Philippine central bank reported.

The industry's combined real estate loans grew by 4.2 percent to P192.2 billion from P184.5 billion in the previous quarter. As a result, the ratio of real estate loans to total loan portfolio, excluding interbank loans, rose to 11.5 percent from the previous quarter's 10.6 percent.

Real estate loans granted for the construction and development of real estate for commercial purposes including infrastructure projects accounted for 81.2 percent or P156.2 billion of the total while the remaining 18.8 percent or P36 billion were granted for the acquisition of residential units by individual homeowners/borrowers.

There was likewise some improvement in terms of assets backed by real estate.

Past due real estate loans fell by 9.6 percent to P18.1 billion from the previous quarter's P20 billion.

"The improvement was mainly due to the sale of delinquent loans to SPV (Special Purpose Vehicle) as well as rigorous collection, settlement, restructuring and foreclosure efforts," the BSP said.

The extended SPV Law, which will expire in April next year, waives some of the taxes and reduced fees usually collected in the sale or transfer of assets, to encourage banks to clean up those bad assets that piled up during the Asian crisis. It also scraps the documentary stamp tax, capital gains tax and e-VAT (expanded value added tax) and reduced the registration/transfer fees by 50 percent.

Thus, the ratio of soured real estate loans to total loans eased to 9.4 percent from the previous quarter's 10.8 percent. This ratio was likewise an improvement from the year-ago ratio of 13.3 percent.

-TC-

September 17th, 2007, 03:17 PM

http://www.bworldonline.com/BW091707/content.php?id=051

Office space supply to remain tight next year

Ruby Anne M. Rubio
BusinessWorld
September 17, 2007

SUPPLY OF OFFICE spaces will likely continue to remain tight until the second half of 2008, even after nine developments come on line to add another 237,000 square meters to existing supply, real estate money management and services firm Jones Lang LaSalle said.

In her office market analysis dated September 2007, Jones Lang LaSalle Philippines research head Kathy Marcelo said new supply for Grade A office, averaging 21,000 square meters annually since 2001, has "significantly lagged" behind the pickup in demand that has been driven particularly by business process outsourcing (BPO) activity.

"It is clear that the office market in Metro Manila is going through a tightening phase, with occupiers largely at the mercy of landlords. We advise occupiers to try and commit as early as possible, to look at decentralized options or to reduce exposure through flexible space planning strategies. With limited supply and a likely continuation of the demand scenario over the next 12 months, there are few other options," Ms. Marcelo said in Occupier Trends.

However, she believed there are "considerable" opportunities for occupiers who are looking to dispose of existing space, especially if it is "well located."

"Likewise, there are opportunities should occupiers look to leverage their covenant by selling owned space or refinancing given the likely outlook for interest rates," she said.

Ms. Marcelo noted BPO activity continues to account for bulk of leasing transactions in Manila’s prime office areas. While absorption for the first semester exceeded 25,000 square meters, she said this represents a "considerable slowdown" from previous periods.

Over the three years to 2006, annual absorption in Makati City alone was 48,000 square meters every six months, or close to 100,000 square meters per year.

"There are a number of reasons for this slowdown. However, the main one appears to be lack of quality space available and a falling vacancy rate, which goes hand in hand with the absorption levels experienced over the last three and a half years. The outlook for demand remains strong, limiting opportunities for occupiers. Given also that available vacant space now amounts to approximately one year’s average absorption, we expect market tightness to continue to impact on rental growth, which until recently had been moderate," she said.

But the good news is that market tightness and outlook around rentals is encouraging more developers to propose additional supply across Metro Manila.

The strong demand boosted by the entry of the BPO firms in 2000 has driven the market to expand beyond the Makati and Ortigas central business districts into emerging central business districts such as Bonifacio Global City, Eastwood City and Filinvest Corporate City.

Ms. Marcelo earlier said the strong demand has driven developers to provide purpose-built properties that suit specifications of these long-term leases and further encouraged pre-leasing commitments.

-TC-

September 17th, 2007, 03:22 PM

http://business.inquirer.net/money/features/view_article.php?article_id=88935

Hot property sector shows no sign of cooling down
By Elizabeth Sanchez-Lacson
Inquirer
09/16/2007

HAS THE Philippine property sector lost its sizzle as financial markets cool down after the subprime mortgage fright in the United States?

In 2005, property companies and analysts lauded the start of a property boom--which had been long anticipated since 1997--largely due to a growing outsourcing industry that has spurred demand for office spaces, very low interest rates on housing loans, and an increasing appetite for homes from overseas Filipino workers (OFWs).

Two years later, industry analysts still believe that property investments are still a hot item, as reflected by resilient local and even overseas demand even if subprime mortgages have tightened credit access in the US, considered a relatively important market for home buyers of Philippine properties.

Market fears of a loss of a major growth driver in terms of residential sales from OFWs are, by far, also overstated, analysts said.

Subprime mortgages are mortgages granted to a borrower with a less-than-perfect credit report or those who have either missed or have been late in payments on a debt. The lure of subprime loans is that it does not require collateral.

Concerns about the massive housing and mortgage markets have swept the globe in the last few months, prompting sharp falls and jittery Asian and European stock markets and have prodded the Federal Reserve to prepare a policy response to a possible credit deterioration.

Analysts said the effects are hardly felt here, and may be manifested in the decision-making of OFWs towards investments.

"Right now, on the average, half of the inventory (of property firms) is sold abroad to investors in the US, Europe and the Middle East. For Filipinos in the United States who are excessively leveraged and who may have availed of subprime loans, they could have second thoughts in borrowing to buy property in the Philippines," Victor Asuncion, director for global research and consulting at CB Richard Ellis said.

Filipinos living in Europe and the Middle East are quite insulated which could tilt marketing initiatives by local property firms towards these markets and other new markets as well for their projects.

The continued entry of professionals--such as nurses, teachers, physical therapists-- in the US is also a source of relief for property firms, says Asuncion, since property firms can tap into this growing market for their marketing initiatives.

Limited damage

In a research study, ATR Kim Eng Securities head of research Edgar Bancod said the extent of the damage of subprime loans on local banks and real-estate firms is likely to be limited.

The Philippine central bank said the exposure of Philippine financial institutions to collateralized debt obligations (structured finance product that typically protects a diversified pool of debt assets) is limited to 0.2 percent of total industry assets.

Bancod says this is equivalent to roughly P10 billion or $217 million.

Additionally, CDOs held by Philippine banks are made up of only A to triple A rated paper which meant that local banks have zero exposure to subprime assets.

Bancod also said a closer look will show that concerns that subprime woes could hurt real-estate earnings is quite overdone.

In the case of Ayala Land, the country's largest property company, Bancod said the impact on sales of the "total" loss of business from Filipinos based in the US will be capped at 4.1 percent mainly because ALI has diversified products and markets.

Manageable risks

ALI corporate spokesperson Alfonso Reyes confirmed this, citing three reasons why the risks are manageable.

"We are still in the process of evaluating the potential impact of the US subprime crisis on our potential overseas sales. However we believe that any effects will be quite manageable for three reasons: first is that while the US is an important market, our overseas sales are very diversified now with strong contributions from Europe, Japan and the Middle-East," Reyes said.

Secondly, he said ALI's product lines have become more diversified in recent years and that a lot of the company's product launches have been in the middle- income and affordable segments whereas its US buyers historically have gravitated towards high-end projects.

Finally, the profiles of ALI's US-based buyers are from those with established professions and of strong credit standing. "In fact most of them pay cash," Reyes said.

Sales to OFWs accounted for 34 percent of ALI's first half residential sales. "Therefore they are a large and important segment which we will continue to focus our marketing efforts on," Reyes added.

Lessons from the past

Since the Asian financial crisis in 1997, interest rates have drastically dropped to never before seen levels at a fixed rate of 11 percent on a 25-year housing mortgage and in some cases such as Pag-IBIG loans, to as low as 6 to 7 percent for a P750,000 loan for 25 years.

This is compared with a 16 to 19 percent floating rate for the same term (25 years) during the crisis times (1997).

With such favorable conditions, analysts said long gone were the days that the property market was teeming with speculators or those that buy property and will sell them at higher rates.

"Banks in the Philippines are also very conservative , whereas in the US, they can lend to a buyer without collateral, requiring only interest payments. We learned our lesson in 1997 and the BSP is critical of banks' activities," Asuncion said.
[B]
Track record

Aside from this, home buyers are also critical of the property developer's track record and the location of the project.

Proof of this is the rise in prices for prime locations. For instance, office rental rates have grown in the last three years to P1,100 a square meter in Makati, P650 to P700/sqm in Fort Bonifacio Global City in Taguig, and P550/sqm in Ortigas, Pasig City, Asuncion said.

The latest offering by Eton Properties of the Lucio Tan Group for its residential condominium in Greenbelt sold for P93,000/sqm between February to August and grew to P100,000/sqm today.

The Ayala Land Residences in Greenbelt also sold for P100,000/sqm last year and is today selling at P115,000/sqm.

Filinvest Land Inc. is also raising condominium prices at its Alabang development by 5 percent starting Sept. 1, Asuncion said.

"It's in specific markets. Buyers are very critical," Asuncion said.
Asuncion also said that demand for business process outsourcing firms have remained resilient, with office spaces pre-leased until 2009.

Bancod also said that, if a US economic slowdown looms, this would put pressure on US companies' revenues which could prod these companies to take advantage of offshore services to lower costs and improve profit margins.

"In this way, the subprime scare (for Philippine properties) may be offset by office sales, which remain buoyant," Bancod said.

3cr

September 19th, 2007, 09:03 AM

SC affirms Taguig’s jurisdiction over prime lots at the Fort
Malaya
http://www.malaya.com.ph/sept19/metro2.htm

THE Supreme Court on Tuesday affirmed the territorial jurisdiction of Taguig City over prime lots in the Fort Bonifacio military reservation which are also being claimed by Makati City.

The SC en banc denied for lack of merit the petition filed by Makati seeking a reversal of the Court of Appeals’ decision denying its motion for reconsideration to declare the preliminary injunction over the area subject of the boundary conflict as functus officio, or to be dissolved.

Functus officio has been defined as legally defunct.

The SC said the CA did not err when it affirmed the orders of Branch 153 of the Pasig regional trial court denying Makati’s bid to claim what is known as the "inner Fort" or the camp proper.

All magistrates concurred with the decision except Associate Justice Dante Tinga who took no part due to his relation with current Taguig Mayor Freddie Tinga and his previous position as mayor of Taguig.

The high court agreed with the arguments of Taguig that there was nothing unlawful or improper in its construction of a police station in any part of the "inner Fort," considering that it was only exercising its jurisdiction.

Taguig filed with the Pasig RTC on Nov. 22, 1993 a complaint for judicial confirmation of the territory and boundary limits of Taguig. In its complaint, Taguig described its territory as having a total land area of 4,520.6913 hectares, bounded on the northwest by Makati; on the north by the Pasig River, Pateros and Pasig; on the east by Taytay; on the south by Muntinlupa, and on the west by Parañaque.

The complaint alleged that despite several documents and by virtue of Presidential Proclamations 2475 and 518, dated Jan. 7, 1986 and Jan. 31, 1990, respectively, certain parcels of land inside the Fort were erroneously declared as situated within Makati.

Through the said proclamations, Makati got 74 hectares of wide open spaces consisting of farmlands in Cembo, South Cembo, West Rembo, Comembo, Pembo and Pitogo, over all of which Makati has since 1985 been unlawfully exercising jurisdiction.

3cr

September 24th, 2007, 10:23 AM

ALI set to start its biggest project ever
By Zinnia B. Dela Peña
Monday, September 24, 2007
PhilStar
http://www.philstar.com/index.php?Business&p=49&type=2&sec=27

Property giant Ayala Land Inc. is set to embark on its biggest project to date, the Nuvali township in Canlubang, Laguna, which is seven times the size of the Makati Central Business District.

The Nuvali community, to rise on a 1,600 hectare property, is being positioned as a regional center with retail, commercial, business process outsourcing, residential, transport and even recreational components. It will be developed over a period of 30 years and will stretch from Sta. Rosa to Canlubang to Cabuyao.

The project will have essential support facilities and amenities such as retail and service outlets, schools, training centers, residential facilities, sports and recreational amenities.

About eight hectares will comprise a lake and park.

Ayala Land will kick off the Nuvali community with the construction of an IT campus named Technopod. The first building, a four-story structure, will offer 10,805 square meters of office space and is slated for completion in 2008.

The project’s residential component is seen to create the “Next Forbes Park”. Around 70 hectares have been allotted for the residential component.

Only 380 lots will be made available, with residential lots priced at around P8,000 square meters and P20,000 for the commercial lots.

The residential project will have two phases — the first phase having 113 lots and phase 2 with 270 lots.

Nuvali is also expected to evolve into a university town housing Don Bosco College, De La Salle University, St. Scholastica’s College, University of Sto. Tomas, among others. Ateneo, University of Asia & the Pacific and Xavier School reportedly have parcels of land there there.

The Canlubang project follows the P6-billion investment of ALI over the next five to 10 years for the development of the 38-hectare property of the University of the Philippines (UP) into a fully integrated information technology (IT) and IT-enabled services community.

ALI, a unit of conglomerate Ayala Corp. , has set a capital spending budget of P16.2 billion this year, up 17 percent from P13.8 billion in 2006.

Ayala Land, builder of upscale malls, quaint residential villages, and residential and office condominiums, reported a seven-percent rise in net income last year to P3.9 billion.

-TC-

October 1st, 2007, 12:42 PM

http://business.inquirer.net/money/breakingnews/view_article.php?article_id=91832

Property boom set to continue with demand, rate cuts
By Rocel Felix
Thomson Financial
10/01/2007

MANILA, Philippines -- The outlook for the Philippine property sector remains bullish, with the recent interest rate cut by the Federal Reserve and expectations of further cuts before the end of the year likely to support demand for new homes, offices and commercial space in the near term, analysts said Monday.

The sector has shown no signs of a slowdown, despite the recent worry about the fallout from the sub-prime mortgage crisis in the US.

"The benefits of a rate cut by the Fed, looked at favorably by other countries, should also extend to the property sector here," said Jose Vistan, research director of AB Capital Securities.

Vistan said growth in the sector will get a further boost if the Philippine central bank trims interest rates.

Central bank governor Amando Tetangco said recently that the Fed's cut gives more room to adjust Philippine rates, but that it is still keeping an eye on upside risks for inflation such as volatile crude oil prices, which could hurt the economy.

Analysts polled by Thomson Financial said they expect the central bank to cut its key rates by at least 25 basis points at its policy-setting meeting on Thursday.

This, said Vistan, "will mean cheaper borrowing costs for both home buyers and developers catering to the office space market."

The bullish outlook for the sector was evident in Monday's stock trading, which saw property heavyweights Megaworld Corp., Ayala Land Inc. and Robinsons Land Corp. maintaining the sector's strength.

The property index rose 2.3 percent on the first trading day for the fourth quarter, adding to last week's 7.6 percent gain.

Megaworld Corp. surged 40 centavos or 11.6 percent to P3.85.

Ayala Land, the nation's biggest property developer, was up 25 centavos or 1.5 percent at P16.50.

Robinsons Land jumped 75 centavos or 4.6 percent to P17.25.

IN THE PIPELINE

At the recent launch of Ayala Land's biggest property project to date, company president and chief executive Jaime Ayala said the company is confident that the boom in the property sector will be sustained this year despite lingering concerns over the housing and credit problems in the US.

Ayala Land is spending P3.5 billion on the first phase of its Nuvali township project south of the Makati financial district in metropolitan Manila.

The Nuvali township will be seven times larger than Makati's business center. It is envisioned as a self-contained community with retail, commercial, business process outsourcing (BPO), residential, transportation and recreational components.

"We're confident about the property market in the Philippines with the low interest rate environment, strong economic growth in the last two quarters and the investment climate. Our buyers are really interested in investing in our properties," Ayala said.

Megaworld, focusing on middle-income residential property and call center and BPO leasing, launched two new projects in the second quarter. It also acquired two properties for future development.

The company is negotiating with the government to buy an old airport in
central Philippines which it plans to convert into a hub for major BPO companies.

"We are seeing a very strong local market, especially in the residential mid-market, where most of our buyers are first-time home owners. We are also quite optimistic about the BPO industry, which would sustain our sales," said Megaworld chief executive Kingson Sian.

SM Investments Corp, the holding company of tycoon Henry Sy which is known more for putting up shopping malls, is also betting on high-end residential developments.

SM Investments is developing the first phase of a P6-billion coastal resort in the south of the main Philippine island of Luzon. The initial phase of the 5,700-hectare Hamilo Coast project involves the construction of Pico de Loro Cove, a 40-hectare, medium-rise, low-density condominium, with 227 of the 1,500 apartments expected to be completed this year. Pico de Loro will be the first of 11 buildings to be constructed in Hamilo Coast's 13 coves.

Another business magnate, Lucio Tan, is taking advantage of the property boom, reviving dormant listed company Balabac Resources and Holdings Co. Inc. early this year and renaming it Eton Properties Philippines Inc.

Eton is specializing in high-end and middle-income residences, information technology and BPO office developments, and township projects.

This year alone, Eton has launched three projects in Manila -- Eton Greenbelt Residences, Makati Eton Emerald Loft and Eton Baypark Manila.

The company is set to launch its first BPO project and is making plans for a 10-hectare property in Manila and for a hotel, residential, leisure and retirement village on a 36-hectare property near the central Philippine city of Cebu.

WORRIES OVERBLOWN

Some analysts believe worries over sub-prime and credit concerns in the US are overblown.

"I don't think that those issues will really hit hard the local homebuilders.

There are very few institutions exposed to collateralized debt obligations and even then their exposure is insignificant," said Vistan of AB Capital.

With much of the property sector's rise being fueled by money coming from the more than eight million Filipinos working overseas, demand should be sustainable, said Ron Rodrigo, research director of Unicapital Securities.

In the first half, remittances from Filipinos working overseas grew 18.1 percent to $7 billion from $5.9 billion a year before. The central bank is expecting remittances to hit a record $14 billion this year.

"A large chunk of the money coming in from those working abroad goes into buying new homes and rebuilding existing ones. This is keeping the property sector alive," Rodrigo said.

Bank of the Philippine Islands global remittance vice-president Raul Dimayuga said overseas customers of Ayala Land are mostly skilled and professional workers.

"One has to remember that these buyers in the US, for instance, have well-established professions. They are likely to already have homes in the US and generally cannot be categorized as sub-prime borrowers. They are affluent in a way, and those that do buy properties in the Philippines either do it as an investment or as a place for retirement."

Aside from the strong sales of residential developments, the property sector is also getting a boost from growing demand for office and commercial space.

"This is unlike in the 1997 Asian financial crisis, when property prices were artificial and property companies focused on residential projects. Today, though, companies are also enjoying demand for BPO offices," said Rodrigo of Unicapital.

He said revenue from office and commercial space gives property companies a steady source of recurring income.

"It somehow makes them less vulnerable. The situation is favorable for companies and home buyers, since demand is also being supported by low interest rates, where payment terms are more flexible," said Rodrigo.

STRONG TAKE-UP

Independent property consultants believe that demand for developments in both the residential and office segments will continue to grow in the near term.

Colliers International Philippines, in its latest quarterly research report, said that in the first half the net take-up for residential condominiums in Makati was about 580 apartments.

It estimated full-year take-up at just 697 apartments, down 5.0 percent from 737 in 2006 because fewer apartments are expected to be completed this year.

On the other hand, rents for upmarket three-bedroom apartments in Makati rose nearly 10 percent in the first half, with rents averaging P519.00 per square meter, just 5 percent off the 1997 peak of P538.00.

Colliers said office rentals in the premium-grade segment reflect tight supply, as rents escalated nearly 20 percent in the first half to about P1,018.00 per square meter, the peak level in 1997 before the Asian financial crisis struck.

"Expectations are for rents to further increase by 5-10 percent in the course of 2007 to an average of 1,062 pesos per square meter," Colliers said.

Land values have also increased, with developable land in Makati's business district up 6.0 percent in the second quarter at an average of P235,000 per square meter from P222,500 in the first quarter.

In metropolitan Manila's alternative business district of Ortigas, land values have gone up to an average of P114,750 per square meter, 7.0 percent more than the first quarter's P107,500.

The stock of retail space in metropolitan Manila expanded by almost 5.0 percent in the second quarter, with the completion of Ayala Land's latest mall, the 200,000 square-meter Triangle North of Makati.

"There is still a lot of room for property companies to expand, especially for the residential segment, which is not yet saturated," said Sian of Megaworld.

Sian said Megaworld expects its real estate net sales this year to hit P10 billion, up from P6.16 billion last year, banking on brisk sales of apartments in its condominium developments.

He said about 80 percent of Megaworld's sales are domestic sales and the rest overseas sales, half of them in the US market.

"Our buyers in the US are those that have been working there for more than 20 years, and have built up quite a bit of wealth. These are relatively well-off people and are creditworthy. They are not really a market for sub-prime mortgages," Sian said.

The property index gained 29 percent in the first three quarters, offsetting the slide in the second quarter. It is expected to rise further in the fourth quarter, said Lawrence de Leon, an analyst for Accord Capital Equities.

"With a rate cut looming in the fourth quarter, I expect property shares to go up further. Lower interest rates will encourage more buying, especially from Filipinos working abroad. It will spur bigger demand for property."

But Regina Capital Development Corp. vice-president for marketing Gomer Tan said that with or without a rate cut, property stocks are unlikely to lose their appeal, given their attractive valuations relative to the sector's earnings potential.

-TC-

October 1st, 2007, 01:03 PM

http://business.inquirer.net/money/breakingnews/view_article.php?article_id=91625

Infrastructure work seen to peak in 3 years

Inquirer
09/30/2007

MANILA, Philippines--THE CONSTRUCTION sector in three to five years will experience a boom, helped by low inflation levels and an expanding real estate sector, according to property consultant CB Richard Ellis Philippines Inc.

Inflation, or the rise in prices of goods and services, greatly affects the material and labor costs. Inflation has fallen to single digit-levels, with the lowest rate recorded at 2.2 percent in March 2007.

A real estate boom usually precedes a construction boom, ensuring that demand will sustain the latter.

The real estate boom was perceived to have started in 2005, largely due to a growing outsourcing industry that has spurred demand for office spaces, very low interest rates on housing loans, and an increasing appetite for homes among overseas Filipino workers.

The continuous rise in office space take-up, 70 percent of which come from business process outsourcing (BPO) firms, have spurred office developers to start building again since 2006, albeit at a more cautious manner, such as by pre-leasing the space before projects are completed, said Victor Asuncion, CBRE director for Global Research and Consultancy Services.

"The macroeconomic fundamentals are strong, and so is BPO demand," added Rick Santos, CBRE chairman.

The property consultant said office building supply this year will reach 232,180 square meters, and will grow to 330,425 square meters in 2008 based on commitments by certain firms.

In 2009, commitments to build office space have reached a total of 105,909 square meters.

On the other hand, demand for office space is seen at 220,000 square meters in 2007, almost matching the projected office supply, and will grow 10 to 15 percent a year, CBRE director Paul Ryan Isip said.

The construction boom is also underscored by the estimated 21-percent growth in construction sales in the first semester, as measured by gross value added (GVA).

GVA is a key performance indicator of the construction sector, and is derived by deducting the intermediate goods used in production, such as raw materials, fuel, advertising and other non-industrial overhead costs, from the total value of output or construction sales using 1985 prices as the base year, CBRE noted.

GVA grew almost 21 percent to P29.87 billion in the first half, from P24.76 billion in the same period in 2006, data from the National Statistical Coordination Board showed.

With high-rise residential condominiums, supply is expected to reach nearly 4,500 units in 2008, from over 4,000 in 2007. Asuncion estimates demand right now is for half of the projected supply 4,500 units, with demand mostly coming from BPO workers and middle-class families.

"Most developers nowadays are pre-selling their projects before they break ground to eliminate the risk of speculative demand," Asuncion said.

"Moreover, [developers were] able to increase project profitability with the inflow of installment payments from buyers."

CBRE also said the voluntary freeze on major construction work is starting to melt, with activities from both the public and private sectors flourishing.

For the public sector, the Arroyo administration has lined up infrastructure projects for completion by 2010. In the private sector, construction projects are ongoing in Metro Baguio, Metro Cebu and Metro Davao.

kiretoce

October 1st, 2007, 05:36 PM

Property boom set to continue with demand, rate cuts (http://business.inquirer.net/money/breakingnews/view_article.php?article_id=91832)

MANILA, Philippines -- The outlook for the Philippine property sector remains bullish, with the recent interest rate cut by the Federal Reserve and expectations of further cuts before the end of the year likely to support demand for new homes, offices and commercial space in the near term, analysts said Monday.

The sector has shown no signs of a slowdown, despite the recent worry about the fallout from the sub-prime mortgage crisis in the US.

"The benefits of a rate cut by the Fed, looked at favorably by other countries, should also extend to the property sector here," said Jose Vistan, research director of AB Capital Securities.

Vistan said growth in the sector will get a further boost if the Philippine central bank trims interest rates.

Central bank governor Amando Tetangco said recently that the Fed's cut gives more room to adjust Philippine rates, but that it is still keeping an eye on upside risks for inflation such as volatile crude oil prices, which could hurt the economy.

Analysts polled by Thomson Financial said they expect the central bank to cut its key rates by at least 25 basis points at its policy-setting meeting on Thursday.

This, said Vistan, "will mean cheaper borrowing costs for both home buyers and developers catering to the office space market."

The bullish outlook for the sector was evident in Monday's stock trading, which saw property heavyweights Megaworld Corp., Ayala Land Inc. and Robinsons Land Corp. maintaining the sector's strength.

The property index rose 2.3 percent on the first trading day for the fourth quarter, adding to last week's 7.6 percent gain.

Megaworld Corp. surged 40 centavos or 11.6 percent to P3.85.

Ayala Land, the nation's biggest property developer, was up 25 centavos or 1.5 percent at P16.50.

Robinsons Land jumped 75 centavos or 4.6 percent to P17.25.

IN THE PIPELINE

At the recent launch of Ayala Land's biggest property project to date, company president and chief executive Jaime Ayala said the company is confident that the boom in the property sector will be sustained this year despite lingering concerns over the housing and credit problems in the US.

Ayala Land is spending P3.5 billion on the first phase of its Nuvali township project south of the Makati financial district in metropolitan Manila.

The Nuvali township will be seven times larger than Makati's business center. It is envisioned as a self-contained community with retail, commercial, business process outsourcing (BPO), residential, transportation and recreational components.

"We're confident about the property market in the Philippines with the low interest rate environment, strong economic growth in the last two quarters and the investment climate. Our buyers are really interested in investing in our properties," Ayala said.

Megaworld, focusing on middle-income residential property and call center and BPO leasing, launched two new projects in the second quarter. It also acquired two properties for future development.

The company is negotiating with the government to buy an old airport in central Philippines which it plans to convert into a hub for major BPO companies.

"We are seeing a very strong local market, especially in the residential mid-market, where most of our buyers are first-time home owners. We are also quite optimistic about the BPO industry, which would sustain our sales," said Megaworld chief executive Kingson Sian.

SM Investments Corp, the holding company of tycoon Henry Sy which is known more for putting up shopping malls, is also betting on high-end residential developments.

SM Investments is developing the first phase of a P6-billion coastal resort in the south of the main Philippine island of Luzon. The initial phase of the 5,700-hectare Hamilo Coast project involves the construction of Pico de Loro Cove, a 40-hectare, medium-rise, low-density condominium, with 227 of the 1,500 apartments expected to be completed this year. Pico de Loro will be the first of 11 buildings to be constructed in Hamilo Coast's 13 coves.

Another business magnate, Lucio Tan, is taking advantage of the property boom, reviving dormant listed company Balabac Resources and Holdings Co. Inc. early this year and renaming it Eton Properties Philippines Inc.

Eton is specializing in high-end and middle-income residences, information technology and BPO office developments, and township projects.

This year alone, Eton has launched three projects in Manila -- Eton Greenbelt Residences, Makati Eton Emerald Loft and Eton Baypark Manila.

The company is set to launch its first BPO project and is making plans for a 10-hectare property in Manila and for a hotel, residential, leisure and retirement village on a 36-hectare property near the central Philippine city of Cebu.

WORRIES OVERBLOWN

Some analysts believe worries over sub-prime and credit concerns in the US are overblown.

"I don't think that those issues will really hit hard the local homebuilders.

There are very few institutions exposed to collateralized debt obligations and even then their exposure is insignificant," said Vistan of AB Capital.

With much of the property sector's rise being fueled by money coming from the more than eight million Filipinos working overseas, demand should be sustainable, said Ron Rodrigo, research director of Unicapital Securities.

In the first half, remittances from Filipinos working overseas grew 18.1 percent to $7 billion from $5.9 billion a year before. The central bank is expecting remittances to hit a record $14 billion this year.

"A large chunk of the money coming in from those working abroad goes into buying new homes and rebuilding existing ones. This is keeping the property sector alive," Rodrigo said.

Bank of the Philippine Islands global remittance vice-president Raul Dimayuga said overseas customers of Ayala Land are mostly skilled and professional workers.

"One has to remember that these buyers in the US, for instance, have well-established professions. They are likely to already have homes in the US and generally cannot be categorized as sub-prime borrowers. They are affluent in a way, and those that do buy properties in the Philippines either do it as an investment or as a place for retirement."

Aside from the strong sales of residential developments, the property sector is also getting a boost from growing demand for office and commercial space.

"This is unlike in the 1997 Asian financial crisis, when property prices were artificial and property companies focused on residential projects. Today, though, companies are also enjoying demand for BPO offices," said Rodrigo of Unicapital.

He said revenue from office and commercial space gives property companies a steady source of recurring income.

"It somehow makes them less vulnerable. The situation is favorable for companies and home buyers, since demand is also being supported by low interest rates, where payment terms are more flexible," said Rodrigo.

STRONG TAKE-UP

Independent property consultants believe that demand for developments in both the residential and office segments will continue to grow in the near term.

Colliers International Philippines, in its latest quarterly research report, said that in the first half the net take-up for residential condominiums in Makati was about 580 apartments.

It estimated full-year take-up at just 697 apartments, down 5.0 percent from 737 in 2006 because fewer apartments are expected to be completed this year.

On the other hand, rents for upmarket three-bedroom apartments in Makati rose nearly 10 percent in the first half, with rents averaging P519.00 per square meter, just 5 percent off the 1997 peak of P538.00.

Colliers said office rentals in the premium-grade segment reflect tight supply, as rents escalated nearly 20 percent in the first half to about P1,018.00 per square meter, the peak level in 1997 before the Asian financial crisis struck.

"Expectations are for rents to further increase by 5-10 percent in the course of 2007 to an average of 1,062 pesos per square meter," Colliers said.

Land values have also increased, with developable land in Makati's business district up 6.0 percent in the second quarter at an average of P235,000 per square meter from P222,500 in the first quarter.

In metropolitan Manila's alternative business district of Ortigas, land values have gone up to an average of P114,750 per square meter, 7.0 percent more than the first quarter's P107,500.

The stock of retail space in metropolitan Manila expanded by almost 5.0 percent in the second quarter, with the completion of Ayala Land's latest mall, the 200,000 square-meter Triangle North of Makati.

"There is still a lot of room for property companies to expand, especially for the residential segment, which is not yet saturated," said Sian of Megaworld.

Sian said Megaworld expects its real estate net sales this year to hit P10 billion, up from P6.16 billion last year, banking on brisk sales of apartments in its condominium developments.

He said about 80 percent of Megaworld's sales are domestic sales and the rest overseas sales, half of them in the US market.

"Our buyers in the US are those that have been working there for more than 20 years, and have built up quite a bit of wealth. These are relatively well-off people and are creditworthy. They are not really a market for sub-prime mortgages," Sian said.

The property index gained 29 percent in the first three quarters, offsetting the slide in the second quarter. It is expected to rise further in the fourth quarter, said Lawrence de Leon, an analyst for Accord Capital Equities.

"With a rate cut looming in the fourth quarter, I expect property shares to go up further. Lower interest rates will encourage more buying, especially from Filipinos working abroad. It will spur bigger demand for property."

But Regina Capital Development Corp. vice-president for marketing Gomer Tan said that with or without a rate cut, property stocks are unlikely to lose their appeal, given their attractive valuations relative to the sector's earnings potential.

tafftrader

October 8th, 2007, 04:40 AM

Dvorak

October 8th, 2007, 09:23 AM

for banks, the maximum loanable year is only 20 years I think. Try Banco De Oro and MetroBank.

I'm doing some market research on the local mortgage market. Unfortunately the banks websites don't give enough information on mortgages(home-loans). Does anyone know who offers the best deal on a 20-30 year mortgage? What are the requirements etc?

gen1

October 8th, 2007, 10:35 AM

Chinabank agressively prices her loans

Raven83

October 8th, 2007, 07:16 PM

I'm doing some market research on the local mortgage market. Unfortunately the banks websites don't give enough information on mortgages(home-loans). Does anyone know who offers the best deal on a 20-30 year mortgage? What are the requirements etc?

Honestly based on my experience, loan interest could get so low as they can specially these days....recently I made a loan for our business expansion. I ordered some machineries from China. My usual loan banker from DBP anticipated that he will be the first person that I will talk to about financing till a Metrobank agent which I accidentaly bump into while in a stockmarket seminar suddenly offered me a lower rate..and take note! Metrobank, these guys have a reputation to be stingy.

The only thing that I have to present them was a written busines plan on how can I pay them, and give them a short tour of our small factory and opened my financial and order books for them...later I got my loan in a rate that was 20% lower than that of DBP, the DBP guys became somewhat dissappointed to me and said they can offer me much lower rates:nuts: I told them probably talk to them next year:lol: ...

My tip is be friendly with your local banks,know their officers and ranks and their file, give gifts during christmas, last year I began investing on UITF's of BDO and I began to hunt for connections within its ranks,after gaining their rappor I later became on their prioriy list in the IPO's that they handle,not mention I got automatic approval for credit loans 3 times of my total deposit and trust funds. They offered me several loan terms but for our business but I'm reserving them for now since I'm planning to build a 20 to 30 doors townhomes/apartments in my vacant lot San Jose Del Monte Bulacan next year. In which I wanted them to be my financier.

What's good about BDO is that they have readily available advisers when it comes to real estate investments(legal,contruction etc) and will give you access to statistics and demographic data (I guess it came from SM research team). Not that this probably applies to all but that what happened to my friend who build his 6 storey commercial establishment near Binondo....

banks that gives the best credit terms?

honestly it depends on:

1) how you haggle
2) your reputation to your banker(s)
3) the who do you know,thingie...(guanxi)

just an honest opinion,remember this is Philippines, there's really no such thing as fixed rate, if you know how to battle with the terms:lol:

good luck!;)

tafftrader

October 9th, 2007, 03:47 AM

you've lost me again with the taglish....:nuts:

bustero

October 9th, 2007, 09:18 AM

Taff trader try out the megaworld site as they originate their own source.

Also the Pagibig site which is a baseline for housing.

I know Allied has offered a special 8.38 10 year fixed on a 20 year loan. Quite a stir in the local market.

tafftrader

October 9th, 2007, 12:25 PM

8.38%, interesting! if this mortagage market develops then we will see a "real" boom in property prices.

Dvorak

October 9th, 2007, 01:16 PM

did they offer this for any housing loan?? I thought only for the ETON project.

Taff trader try out the megaworld site as they originate their own source.

Also the Pagibig site which is a baseline for housing.

I know Allied has offered a special 8.38 10 year fixed on a 20 year loan. Quite a stir in the local market.

tootsjap

October 9th, 2007, 04:11 PM

Most banks offer 8.75% annual repricing with terms as long as 25 years. This will go even lower after the BSP recently lowered interest rates.

bustero

October 17th, 2007, 06:21 AM

did they offer this for any housing loan?? I thought only for the ETON project.

You're right , I confirmed if they would offer it for our projects and they said pang Eton lang nga! But Tootsjap is right 8.75 is easy right now and with a good possibility of lower rates soon. Good for buyers.

tonyboy

October 23rd, 2007, 05:18 PM

^^that's good news, peter! does the lower rate also apply for refinancing or only for new home loans?

Dvorak

October 24th, 2007, 06:22 AM

waaa sana ma refinance ko na yung loan namin sa pag-ibig.. by january.. nasa name ko na yung CCT.. so baka madali na ang processing baka pumayag na ang mga banks..

tonyboy

October 25th, 2007, 05:54 PM

^^ can dual citizens apply for pagiibig home loans also?

we paid off our metro bank mortgage loan..almost same as cash within 15 months. unfortunately our total investment portfolio has changed drastically to being house-rich but cash-poor.

we're now thinking about a possible re-financing option but metro bank personnel at makati ave. office has problems communicating with us via our pc (with the new slow vista) to their website and vice versa. our long distance telephone bills are getting way out of hand. :(

tafftrader

October 25th, 2007, 05:58 PM

Dvorak

October 25th, 2007, 06:05 PM

Pag-ibig has a program for OFWs.. so I'm sure a dual citizen can apply too, just apply for membership, give 2 years' contribution and you can already avail of their loan, check out their website.. however, banks now has cheaper rates.

^^ can dual citizens apply for pagiibig home loans also?

we paid off our metro bank mortgage loan..almost same as cash within 15 months. unfortunately our total investment portfolio has changed drastically to being house-rich but cash-poor.

we're now thinking about a possible re-financing option but metro bank personnel at makati ave. office has problems communicating with us via our pc (with the new slow vista) to their website and vice versa. our long distance telephone bills are getting way out of hand. :(

-TC-

October 30th, 2007, 11:09 PM

http://www.bworld.com.ph/BW103007/content.php?id=002

Selling sans licenses

Jennee Grace U. Rubrico
BusinessWorld
October 30, 2007

First of two parts

EARLIER THIS MONTH, the Housing and Land Use Regulatory Board (HLURB) told Century Properties, Inc., one of the oldest property developers in the country, to stop selling its Gramercy Residences @Century City project in Makati.

The company’s application for a selling permit remained pending, the HLURB declared, and it scored the developer for coming out with advertisements for the project in July and September.

Century Properties officials countered that the advertisements the regulator referred to were actually press releases that came out in newspapers, and said the practice of selling while a license application remained pending was actually an industry-wide practice.

"Due to the extended length of time in filling and getting approval for permits in the Philippines, a majority of reputable Philippine developers start pre-selling their projects without a license to sell," Century Properties Chief Operating Officer Jose Victor Antonio said in a statement sent to BusinessWorld when the notice of violation was released to media.

"The problem is not unique to Century Properties, it affect[s] all major developers," he said.

HLURB officials all but confirmed this, with the agency’s Executive Officer and Commissioner Romulo Q. Fabul saying the notice of violation sent to Century Properties was but one of 149 the regulator had issued since the start of the year, said. The list includes practically all of the major property developers, he said.

"You cannot sell without [a] license to sell. It is a reasonable assurance that the papers are in order and the developer’s warranty, approved plan, ownership and capacity to develop are in place," he said.

Under Presidential Decree 957 or the Subdivision and Condominium Buyer’s Protective Decree — the law that governs the HLURB — property developers cannot sell subdivision lots or condominium units unless they have obtained the requisite licenses.

"Those who violate advertising without license, we notify all of them and issue cease and desist orders. They should not sell until they get the license to sell," Mr. Fabul said.

He declined to provide the list of companies that had been issued notices of violations, saying it was "not updated." Noting that he was a "small fry", Mr. Fabul added that divulging the names of the erring firms "would not be good for the real estate sector, which is a pump-primer of the economy."

"We tell the developers that we are partners — we are all after buyer satisfaction," he said.

The regulator, he said, preferred to give things a "positive spin" by posting a list of projects that have already secured licenses on its Web site.

And while the list also has to be updated — as of press time, the site only identifies projects that got approvals as of August 2007 — Mr. Fabul said buyers can always call the HLURB to find out whether the projects are already licensed.

The license to sell, he said, is a way to protect the public from fly-by-night developers. He and property sector analysts said buyers who patronize reputable developers are basically not at risk.

Analysts said property developers would rather advertise ahead of the issuance of their licenses to sell and pay the fine of up to P20,000 than wait for as much as nine months. Doing otherwise, they said, allow the competition to capture their market.

"It is a common experience among developers that the processing time for the issuance of ECC (environmental compliance certificate), building permits, development permits and conversion usually takes several months and, in some instances, even years, depending on the issues that may arise concerning the project," Megaworld Corp. Vice-President for Legal Affairs Gary de Guzman said.

Mr. Fabul claimed that it only takes the HLURB 30 days to process the license to sell, but this is assuming that all other necessary requirements — like the ECCs (which are issued by the Environment department), the building and other local government permits — have already been secured.

"We even help them by processing the license to sell even while they still have to complete their requirements," he said.

Mr. Fabul also said the HLURB offers temporary permits to sell — valid for six months — to developers which only have to submit their building permits. Developers, however, do not want these, he said.

Delays in the issuance of the permits to sell are already being addressed, Mr. Fabul claimed. In particular, other agencies have already agreed through Executive Order 45 to issue their respective permits within prescribed periods, he added.

Media is also to blame, he said, for allotting advertising space and air time for projects that have yet to be covered by selling licenses.

Jones Lang LaSalle Philippines research head Kathy Marcelo, meanwhile, said another cause for violations is the issue of raising the money needed for actual construction.

"Due to the increasing demand in the market, most developers pre-sell their projects to accumulate additional capital for their construction," she said.
Other analysts also noted that the P20,000 fine for an advertisement that will generate millions of pesos in revenues makes for an easy decision to push the sale.

PD 957, however, metes out heavier penalties for the violation, including a 10-year jail term for repeat violators.

Mr. Fabul said property developers who repeatedly violate the rules on selling are told that their applications for permits would be denied. The denial, however, can be appealed, and Mr. Fabul admitted that the regulator has yet to issue a final denial of a permit to sell applications.
Jones Lang LaSalle’s Ms. Marcelo said the fine should be increased to make the system more effective.

Claro Cordero, Jr., Leechiu Associates senior manager for consultancy services, also called for stricter penalties.

"[For] The existing measures that HLURB has, specifically for license to sell issuance, they should have stricter ways of implementing the policies and should impose appropriate penalties let’s say suspension," he said.

CB Richard Ellis Philippines associate director for global corporate services Ryan Isip said the rules need to be tweaked.

"The rules on pre-selling without the license to sell are not clear they should be tweaked so that there are conditions — what can be done, what can’t be done," he said, adding that HLURB monitoring is important given that sales are also being conducted over the Internet and through telemarketing.

One gray area is the charging of reservation fees — Mr. Isip noted that for a buyer’s payment to be considered a sale, he should have put in 30% of the total cost.

"[The] reservation fee is only P20,000," he said.

It is also not clear if advertisements with disclaimers stating that they are being put out "for announcement purposes only" are legal.

Megaworld’s Mr. De Guzman, meanwhile, said their firm has proposed that the processing time for the development permit and the license to sell be cut short. The HLURB, he said, could remove the two-week waiting period between the publication of the license to sell and its effectivity.

Megaworld also wants the assessments and fees be computed as early as possible after the submission of the initial application.

The HLURB could also fast-track its clearance system in connection with the issuance of the development permit and license to sell, he added.

"If these improvements of the existing rules and regulations are implemented by the HLURB at once, the processing time for the license to sell will be greatly reduced to the benefit of the legitimate developers," Mr. de Guzman said.

=========================================================

http://www.bworld.com.ph/BW103107/content.php?id=003

Much ado about nothing?

Jennee Grace U. Rubrico
BusinessWorld
October 31, 2007

Second of two parts

Conclusion

THE CASE of property developers advertising developments even without licenses to sell, and in the process generating profits, should be a "non-issue," Colliers International Philippines Inc. director Richard Raymundo said.

"There are ways to do it in a legal way, anyway. The fact that you can announce projects, [means] you’re basically not breaking any rules," he said.

Danilo Antonio, a professor at the Asian Center for Excellence — a partner of the Asian Institute of Management — said property developers that put out advertisements with disclaimers should not be held liable.

"This is just image building and does not really put buyers at risk," he said.
Putting out advertisements before developers can sell does not really make sense financially, he added. Reservation fees, meanwhile, are "a mechanism that allows buyers to get the units they want."

"And reservation fees are usually refundable if the license to sell is not there yet. Developers [should] know better than accept non-refundable reservations," he added.

Developers, analysts and Housing and Land Use Regulatory Board (HLURB) executive officer Romul Q. Fabul said that ultimately, it is the buyers’ responsibility to find out whether the properties they plan to acquire are already covered by permits to sell.

"In the end, you still have to check if the developers have a license to sell," the Asian Center’s Mr. Antonio said.

Buyers should conduct due diligence before signing a contract and paying for the unit, Jones Lang LaSalle Philippines research head Kathy Marcelo said.

"They should check if the developer has secured all government licenses that are needed, as well as check the track record of the developer. They should make it a point to put all things in writing so that there would always be a reference in the future," she said.

Century Properties spokeswoman Terrie Fucanan agreed.

"As we have always maintained, consumers always have to be vigilant by doing a background check on the developers they are buying properties from. They should always check on the developer’s track record and ability to deliver projects on time," she said.

Mr. Fabul said buyers can always call the HLURB. They can also ask the sellers of the project to show them the license number released by the regulator, he added.

For advertisements, he said projects which have been given their permits include the HLURB license number in the ads.

Leechiu Associates senior manager Claro Cordero Jr., meanwhile, said that while a wise buyer should look for an HLURB license even before giving a deposit, "it’s not all the time that the buyer knows specifically whether the developers have been issued license to sell."

Amina Lim, who bought her condominium unit last year, said she did not know that she had to look for an HLURB number when checking out projects.

"None of the marketing people I talked to while looking for my unit told me their HLURB license number. They market their projects rather than tell buyers what needs to be done," she said.

Ms. Lim eventually settled for a condominium unit in a project that was already standing.

But advertisements that have the disclaimers would not deter her from buying the project being advertised, she said, "especially when I really like the project and it’s from a known developer."

Another condominium buyer noted that investors assume that property developers are selling when they come out with advertisements.

"Kaya ka nga naga-advertise eh, kasi nagbebenta ka (you are advertising because you’re selling the project)," he said.

Stick with the good ones

Analysts said it is best to bank on property developers’ reputations when making a purchase.

"Big developers would not risk their reputation to do a thing like that. It’s the small guys that are likely to do that," the Asian Center’s Mr. Antonio said.

The HLURB’s Mr. Fabul said that despite the number of violations, some followed the rules. Of the 180,000 units that were given selling licenses last year, the regulator only got 1,500 complaints.

"This is less than 2%," he said. The figure, however, does not include violations caught through HLURB monitoring.

Mr. Fabul said that among the companies that follow HLURB procedures are Ayala Land, Inc. and publicly listed Cityland.

"Cityland is very conservative — they always put their license numbers in the ads," he said.

Other property developers that sell condominium units that are already built also claimed to meet the HLURB’s requirement.

A DMCI Homes, Inc. official, for instance, said the firm does not need upfront money from buyers for its projects.

"Because everything is sourced from the group — the materials, the construction of the projects, etc. — we can afford not to sell immediately. Our marketing strategy is different," the official, who requested anonymity, said.

DMCI Homes is the housing arm of construction conglomerate DMCI Holdings Inc.

E. Ganzon, Inc. (EGI) President Eulalio Ganzon, meanwhile, claimed his company only sells its projects once completed.

"We are a technical company, our efforts are towards construction and planning specifications; we only do minor advertisements. We don’t work on pre-development sale," Mr. Ganzon said.

Tweaking the rules

Mr. Fabul said the HLURB is tightening its rules — where before it allowed ads meant for announcement purposes, it has decided to prohibit these as well.

"We found out that even these advertisements that say for announcement purposes only already sell. We called the numbers that were published in the advertisements and pretended to be buyers and they sold to us," he said.

Under a new memorandum signed last September, which has yet to take effect, property developers who wish to advertise projects need to file an application for advertisement approval.

Advertisements have to indicate the exact location of the project, license to sell number and date issued, project completion date, maximum selling price, and names of the owners/developer. Pictures should also be labeled properly and developers should differentiate between "actual photographs," "architect’s perspective" or "artist’s illustrations."

Disclaimers, any future development not covered by license to sell, and exaggerations or misleading information are prohibited.

Regulating and monitoring ads, said Subdivision and Housing Developers Association, Inc. Chairman Willie J. Uy, are part of the HLURB’s job.

"Although I would wish that they would be a little lenient, it is within the purview of HLURB to regulate and monitor the ads. This must be in response from buyers who were victimized by unscrupulous developers promising them heaven and earth," Mr. Uy said.

The new set of rules, however, does not change the penalties to be imposed. Whether it will lead to changes in the industry thus remains to be seen. — with inputs from Ruby Anne M. Rubio

tonyboy

October 31st, 2007, 03:37 PM

Try SKYPE! saved me a fortune.

yes we have skype and also vonnage but metro doesn't. :ohno:

in defense to the bank, their tech support team corrected the vista glitch.

3cr

November 4th, 2007, 09:49 AM

Buying a home the quick and easy way
Manila Times

Forget all the debates about whether you’re ready to buy a home or not. And don’t get wound up about the usual worries—the location to consider, the downpayment to save up for, the risk of getting duped by pre-selling upstarts and the credit checks.

Discerning first-time homebuyers and urban achievers can now reward themselves with the home they’ve always dreamed of, without all the mandatory inconveniences, through a progressive program called the Homestarter Financing program from Community Innovations, Ayala Land’s subsidiary for pioneering developments.

A is for amortization

Of all the hassles of buying a house or condo, first prize usually goes to monthly amortization since this can unexpectedly fluctuate depending on the prevailing interest rates in the local market. With the Homestarter, buyers are protected by interest rates that are unique for two reasons. First, they are the lowest in the market, at 5.5 percent. Second, they are fixed, which means you’re assured of the same schedule of payments for the full length of your term, so that managing your expenses is simple and straightforward. To top it all off, the program also offers payment terms that extend up to 15 years—the longest in the market—making owning a home a breeze.

Low downpayment

The program gives buyers unprecedented convenience and financial freedom with the lowest down payment in the market at 10 percent—which eliminates all excuses for you not to buy a home.

Application

Conventional financing usually involves a tedious application process but because Community Innovations is the only developer offering customers financing using in-house support, buyers go through a seamless, one-time transaction. This means the great inconvenience—now accepted as a norm—of having one’s credit checked upon down payment for a house or condo, and then again for a bank loan to make the required balloon payment doesn’t apply to buyers of Community Innovations selected properties.

Location, location, location

The cardinal rule in real estate, and the first consideration of any homebuyer, is now a thing of the past with the extensive roster of prestigious developments waiting to be owned through the Homestarter.

portludlow

November 4th, 2007, 06:42 PM

^^Thanks 3CR for the post. Good news indeed for individuals who can afford the amortization. The interest rate is sufficiently low and payment is up to 15 years. I think a lot more families can afford this. People who are waiting in the wings to buy a condo/house should take a look at this seriously. The 5% interest is only a few percentage higher than current inflation and I believe lower than the historical inflation in the past.

On the flipside, Is this the first signs that the red hot real estate is finally slowing??? or is there is too much liquidity going around?? Whatever the reasons behind it, I think the consuming public will benefit as big developers like Meg, RLC are forced to give the same incentives or even better. The smaller builders who dont have deep pockets will now be in trouble.

3cr

November 4th, 2007, 08:28 PM

^^Hopefully coming out with such a program is merely addressing the affordability issue of local buying market currently plaguing the booming Philippine realestate market whether or not it is actually in anticipation of any drop-off in Fil-Am demand for mid-priced condo units brought about by this US sub-prime mess. Hopefully other financial institutions follow suit to assist the local buyers/market! :) :) :)

Ex!lE

November 5th, 2007, 03:06 AM

P1B set for Greenfield dev’t (http://www.malaya.com.ph/nov05/busi3.htm)

The Campos family plans to invest P1 billion to expand the commercial area of Greenfield Development Corp.’s Sta. Rosa project.

Greenfield chairman Jeffrey Campos said an additional 33 hectares will be opened next to the 12-hectare Paseo de Sta. Rosa open-air mall.

It will be called Laguna Central and will be developed at P200 million. "It will be an exclusive lifestyle center featuring upscale restaurants, specialty shops, cafes and bars amidst a sprawling area and green environment," according to Campos.

The expansion area would also include SM Supermarket, which is one of one of the several tie-ups Greenfield’s Development will have with the SM Group of companies, said Campos.

Campos said over P100 million will also be spent to build a transport hub.

Greenfield executive vice president Duane Santos meanwhile said they recently launched the first phase of the Pramana residential park, which they developed at a cost of P400 million.

Santos said the subdivision is already fully developed with lots having clean titles and are ready for occupants. The first phase covers 25 hectares while succeeding two phases can raise the total to about 80 hectares, according to Santos.

"Pramana costs P9, 000 per square meter considering its ideal location and to put a premium on its allotting more than 50 percent of total area to greens and open spaces. Its more park than residential subdivision," Santos said.

Santos also said Greenfield is spending about P240 million for the construction of two office buildings with 6,000 sqm. Of leasable space business process outsourcing companies.

Santos expressed confidence this will kick off the development of the Sta. Rosa Business Park, envisioned as the primary office and commercial zone of the area. "SRBP will provide new, high quality office spaces for new and existing businesses and complement these with retail and mixed-use zones," Santos said.

Greenfield will be leasing spaces in the two buildings to BPO firms (which it is now negotiating with) while most lots in the 10-hectare business park will be sold to other firms and developers

anone

November 6th, 2007, 09:21 AM

^^^ Akala ko pa man din yung P1B ay para sa development ng Greenfield District sa Mandaluyong. :(

3cr

November 6th, 2007, 10:41 AM

Hopefully coming out with such a program is merely addressing the affordability issue of local buying market currently plaguing the booming Philippine realestate market whether or not it is actually in anticipation of any drop-off in Fil-Am demand for mid-priced condo units brought about by this US sub-prime mess. Hopefully other financial institutions follow suit to assist the local buyers/market! :) :) :)

Buying a home the quick and easy way
Manila Times

Forget all the debates about whether you’re ready to buy a home or not. And don’t get wound up about the usual worries—the location to consider, the downpayment to save up for, the risk of getting duped by pre-selling upstarts and the credit checks.

Discerning first-time homebuyers and urban achievers can now reward themselves with the home they’ve always dreamed of, without all the mandatory inconveniences, through a progressive program called the Homestarter Financing program from Community Innovations, Ayala Land’s subsidiary for pioneering developments.

A is for amortization

Of all the hassles of buying a house or condo, first prize usually goes to monthly amortization since this can unexpectedly fluctuate depending on the prevailing interest rates in the local market. With the Homestarter, buyers are protected by interest rates that are unique for two reasons. First, they are the lowest in the market, at 5.5 percent. Second, they are fixed, which means you’re assured of the same schedule of payments for the full length of your term, so that managing your expenses is simple and straightforward. To top it all off, the program also offers payment terms that extend up to 15 years—the longest in the market—making owning a home a breeze.

Low downpayment

The program gives buyers unprecedented convenience and financial freedom with the lowest down payment in the market at 10 percent—which eliminates all excuses for you not to buy a home.

Application

Conventional financing usually involves a tedious application process but because Community Innovations is the only developer offering customers financing using in-house support, buyers go through a seamless, one-time transaction. This means the great inconvenience—now accepted as a norm—of having one’s credit checked upon down payment for a house or condo, and then again for a bank loan to make the required balloon payment doesn’t apply to buyers of Community Innovations selected properties.

Location, location, location

The cardinal rule in real estate, and the first consideration of any homebuyer, is now a thing of the past with the extensive roster of prestigious developments waiting to be owned through the Homestarter.

icarusrising

November 16th, 2007, 07:54 AM

FLI nearly doubles income in 9 months

By Zinnia B. Dela Peña
Friday, November 16, 2007
The Philippine Star

Filinvest Land Inc. (FLI), the property arm of the Gotianun family’s Filinvest Development Corp., said its net income almost doubled to P666 million in the first nine months of the year, driven by higher real estate sales and lease revenues.

“The jump in earnings was due to the strong sales take-up of FLI’s residential projects, as well as the rental income contribution from Filinvest Supermall and the company’s office buildings, mainly from Northgate Cyberzone which currently has eight buildings fully leased out to BPOs,” said FLI president Joseph Yap in a report to the Philippine Stock Exchange.

He said revenues from real estate sales grew 32 percent to P2.3 billion as the company’s core business of affordable and middle-income housing continue to enjoy strong demand, particularly from overseas Filipino workers (OFWs).

Yap said there has been strong take-up of its projects in Tarlac, Pampanga, Davao and Cebu.

In the third quarter alone, FLI posted a net profit of P453.2 million, up 34.7 percent from the previous year. Revenues likewise went up 8.7 percent to P980 million.

As of end-September this year, FLI’s total assets stood at P44.9 billion from P40.8 billion at the end of 2006. Long-term debt, on the other hand, declined to P3.1 billion from P7 billion as proceeds from the successful follow-on offering during the first quarter of 2007 were used to pay off debt. Stockholders’ equity, on the other hand, amounted to P36.5 billion from P29.6 billion as of end-December last year.

FLI expects to sustain its gains for the remainder of the year as it launches more projects.

Among its projects in the pipeline include One Oasis Ortigas, FLI’s first medium-rise residential project, West Palms in Palawan and La Costanera in Cebu.

In October, Firstsource Building, the latest addition to FLI’s BPO office buildings in the Northgate Cyberzone IT Park in Filinvest Corporate City, was inaugurated, bringing FLI’s office building portfolio to 108,000 square meters of gross leasable space.

Another four buildings are currently under construction with a gross leasable area of 59,000 square meters, and are slated for completion next year.

http://www.philstar.com/index.php?Business&p=49&type=2&sec=27&aid=2007111511

-TC-

November 21st, 2007, 05:51 PM

Speaking of home financing... here is a good article from www.realestatephilippines101.com

Home Financing For the Clueless Buyers

I feel for those buyers who made some serious mistakes in buying a house only to find out later that they really can’t afford to pay the future monthly dues and has to give it up. It can be a very stressful experience and can be expensive mistake, too. It doesn’t have to happen to you. If you are clueless about home financing, as many home buyers are, here are some tips that you can use to help you determine how much you can afford to finance your home purchase.

1. Check your income and employment of business status. How long are you in your current work? Are you sure your working visa will be extended? Is your employer happy about your performance and will renew your contract for a longer term? How is your business performing over the past two years? Does your cash flow show a healthy figure?

2. If you are paying spot cash, do you have enough savings?

3. If you are paying in installments or planning to avail a mortgage, you can use the formula below to determine how much you can safely spend for your home on a monthly basis. Take note that it is the formula currently by a number of financial institutions in the Philippines to determine the amount of loan granted you.

M = (I - D) / 3
Where:
M = monthly payment you can afford
I = your monthly income, plus that of your co-borrower
D = monthly payment for any long term debt such as car loan

Example:
Your monthly income, I = PhP 250,000
Your monthly amortization for you brand new car, D = PhP 54,000

The monthly payment you can afford is:
M = (I - D) / 3
= (250,000 - 54,000) / 3
M = 65,333.33 <-------- This amount

What does it mean for your home financing? A lot, according to the banks and the developer from whom you will avail of the in-house financing for your home purchase.

A lower value of M means that the bank will refuse to finance your ambition of having a luxurious house, because you are a risky borrower already. Remember that banks would rather not grant you a loan than foreclose your property. It also means that they might have to extend your loan term to 15 years instead of 5 years as you initially wanted it to be. But that has to depend also on other factors such as your employment or business status.

On the other hand, if the resulting value of M is very high, a lot of banks will come rushing to grant you the loan you always wanted! The agent might even suggest that you buy a bigger property.

TIP: As much as possible, always go for the lowest interest rate and the shortest payment term. It is cheaper in the long run — or make that short run.

TIP: Deferred Cash payment is usually short term and does not incur any interest. You may want to check with the developer / seller if this option is available.

linfrank73

November 21st, 2007, 07:45 PM

^^Thanks for the tips! :)

bustero

November 22nd, 2007, 09:05 AM

Got this quote today from ChinaBank. Medyo di sila masyadong competitive sa tinging ko lang. I think rates are trending down pa.

good day Mr. Peter! rates for housing loan are the following:

Fixed for 1 year - 8%
Fixed for 2-3 yrs - 9.25%
Fixed for 5 yrs - 9.75%
Fixed for 7 yrs - 10%
Fixed for 10 yrs - 11.25%

maximum term for individual housing loan is 15 years.
i also attached the application form and list of requirements in case
you
need it.thank you.

bam alegado from chinabank

Pareng Dvorak
**** sabi kung puede ngang ma refinance ni Pagibig iyung mga loan ng buyers from other banks and from HDMF itself. Mababa lang kasi talaga ngayon, masabihan ibang kasama ko dito so opisina!

-TC-

November 27th, 2007, 07:05 PM

Posting a special report (in 2 parts) that came out in the Inquirer this week...

Part 1 of 2

http://business.inquirer.net/money/topstories/view_article.php?article_id=103020

As bad loans are cleaned up, small borrowers suffer
By Daxim Lucas
Inquirer
11/25/2007

ALEX MARAVILLA'S home in Bacoor, Cavite, is a simple one.

It has a floor area of 22 square meters on a 36-square-meter lot, along a row of similarly sized socialized housing units.

He bought the house through a 25-year loan from the National Home Mortgage and Finance Corp. (NHMFC) and has been paying it off slowly through amortizations deducted by his company from his monthly paycheck.

Last March 2007, however, Maravilla was surprised to receive a demand letter from Bahay Financial Services (BFS)--a firm he had never dealt with in the past--ordering him to settle his obligations in a month's time or face legal action.

In the letter, he was informed that NHMFC had sold his loan to Balikatan Housing Finance Inc. whose portfolio was being managed by BFS.

"BFS has attractive resolution options to settle your housing obligation, such as discounted payoff settlement, refinancing programs based on capacity to pay or voluntary surrender (dacion en pago) for those no longer interested in the mortgaged property," the letter said.

Repossessed

Maravilla said he was taken aback by the demand letter.

"How could they repossess my house when I am current with all my payments?" he said in an interview. "Our employer withholds the monthly payments and remits it to NHMFC."

Maravilla added that, before being informed of the transfer, representative of BFS visited his house unannounced to conduct an ocular inspection of the property without giving him an inkling of the impending transaction.

"We were surprised by all this," he said in Filipino.

Unfortunately, Maravilla's sad plight with BFS is, by no means, unique.

In recent years, close to P100 billion worth of supposedly "bad loans" have been sold off by banks and financial institutions to so-called "vulture funds" (an industry term) like BFS whose main goal is to make a profit from either reviving delinquent loans or making money by selling off foreclosed properties.

Alarming proportions

To be exact, data from the Bangko Sentral ng Pilipinas (BSP)--the Philippine central bank--show that some P97 billion worth of bad assets have been sold off under the first incarnation of the Special Purpose Vehicle (SPV) Act of 2002, meant to unburden banks of their massive bad loan portfolios that had reached alarming proportions.

Another P32 billion worth of loans have also been moved to shell companies pending better market conditions that would allow their buyers to profit from the bad loans.

In an interview, BSP Deputy Governor Nestor Espenilla said as much as P100 billion more in bad loans would likely be sold to SPVs under the auspices of the revised SPV Law.

In general, this is good news for regulators who have tried unsuccessfully for years to coax banks into lending more to the credit market to spur economic activity.

Easing the strain

Before the SPV Law, the banking system held almost P500 billion worth of unproductive assets, leaving them with little cash to lend to housing loan borrowers.

"By and large, the SPV scheme has been successful in easing the strain on the financial system," Espenilla said.

But for small borrowers like Maravilla, their problems may be just beginning.

According to him, he had an outstanding balance of P167,000 with the NHFMC before his obligation was sold to BFS.

"When I approached BFS for clarification, they gave me the runaround and told me that I now owed them P184,000," he said. "After paying faithfully for almost eight years, how could that happen?"(To be concluded)

-----------------------------------------------------------------------------------------------------------
Part 2 of 2

http://business.inquirer.net/money/breakingnews/view_article.php?article_id=103274

Small borrowers in limbo as NHMFC washes off hands
By Daxim Lucas
Inquirer
11/27/2007

It is no exaggeration to say that the Special Purpose Vehicle Act has breathed new life into the financial system by allowing lenders to unburden themselves of billions of pesos worth of bad loans.

The rush to clean up nonperforming assets, however, has affected small borrowers like Alex Maravilla, and at least two other employees of Sunvar Development Corp., who woke up one day to find that their government housing loans have been sold to Bahay Financial Services (BFS), a firm they had never dealt with in the past.

“We don’t even know who they are,” Maravilla said in an interview.

“Suddenly, they wanted to foreclose our home.”

The National Home Mortgage and Finance Corp. (NHMFC), the government housing finance agency, said it sold off P13 billion worth of housing loans to private entities Balikatan Housing Finance Inc. and its service provider BFS, as part of an effort to put its financial house in order, as well as to spur the creation of a secondary market for mortgages.

“Part of our mandate is to help develop securitization [of loans] in the country,” said the agency’s president Joseph Peter S. Sison.

Maravilla’s loan, he said, was likely part of the 52,000 accounts transferred to BFS.

Sison said NHMFC made sure that only its “high delinquent” accounts were sold to BFS because it wanted to keep its money-making current loans for its own portfolio.

With Maravilla’s contention that his loan payments were up to date -- payments were made automatically through salary deductions -- Sison suggested that the fault could lie with the employer, which might have failed to remit collections to the NHMFC.

Another Sunvar employee denied this, saying the company faithfully remitted its payments to all government agencies, often several days ahead of deadline.

“We have all the receipts from them to prove it,” said Rally Carvajal, who shares Maravilla’s situation, having received a demand letter from BFS after her up-to-date housing loan was sold by the government.

“What’s surprising is that there are five of us in this company with current home loans, but only three were transferred to BFS,” she said.

In an emailed reply to the Philippine Daily Inquirer (parent of INQUIRER.net), BFS conceded that the housing loans in question might have been erroneously transferred from the state agency.

“Considering that Mr. Maravilla’s account is current, it is possible that it was inadvertently included by NHMFC in the sale to Balikatan,” company spokesperson Gerrard Paez said.

The company laid the blame for Maravilla’s troubles squarely on NHMFC.

“Suffice it to say that the increase in Mr. Maravilla’s outstanding balance was due to interests accrued from the last time he paid,” Paez said. “The apparent increase reflected in our records was due to the fact that NHMFC had not yet remitted to BFS Mr. Maravilla’s earlier payment to them at the time Mr. Maravilla visited us. As of October, however, BFS has already received these payments.”

Both Sison and BFS said Maravilla and other borrowers in similar situations could avail themselves of a “put back” option, in which erroneously transferred loans will be returned to their original status.

However, Maravilla and his co-workers said that after they were given the runaround they were eventually informed by their account officers that the “put back” window had been closed.

They opted to take out another loan from their company’s retirement fund just to pay off BFS, despite subsequent offers of better terms.

“We just want to get hold of the title to our house,” Maravilla said. “We don’t know what else could happen. (End)

3cr

December 3rd, 2007, 08:48 AM

Property demand bouyed by OFW money, outsourcing needs
Business World
http://www.bworld.com.ph/BW120307/content.php?id=004

REMITTANCES from overseas Filipinos will buoy property demand despite the rising cost of goods and services, real estate money management and services firm Jones Lang LaSalle said.

The Outsourcing boom is being reflected in demand for office space and luxury condominiums. — BW File Photo A booming business process outsourcing (BPO) industry will also continue to prop up the luxury condominiums and office space market, the firm said in its latest Asia Pacific Property Digest.

"Consumer spending is expected to be buoyed by the sustained remittances from Filipinos working abroad," Jones Lang LaSalle said.

"The main players SM Prime, Robinsons Malls and Ayala Malls have announced their expansion plans and are likely to further boost the demand for retail space in the near term," it added.

With no new substantial supply, strong demand pulled the vacancy rate further downwards to 5.2% in the third quarter from 5.8% in the previous quarter.

Jones Lang LaSalle said sales would "likely remain robust" for luxury condominiums given demand from affluent Filipinos.

"Rental demand is also expected to remain healthy given the growing number of expatriates from the expanding business process outsourcing industry ... The rising leasing demand for luxury condominiums is buoyed by expatriates working in BPO firms," it said.

"On the other hand, overseas Filipinos are still the main driver of home sales."

Developers claim to have cornered 30% of remittances, thus roadshows have been staged in areas with a "high concentration" of Filipino workers such as the US, Europe and the Middle East.

While no new project was launched during the quarter, Jones Lang LaSalle said 1,029 units were scheduled to be completed in the last quarter. These will come from Fifth Avenue Place and Serendra District I sections B and C.

"About 97% of these potential units have already been pre-committed, pushing [the] vacancy rate down to 2.1%. The strong take-up encouraged established developers such as Ayala Land, Inc., Megaworld Corp. and Century Properties to launch new projects," it added.

Capital values went up by 4.7% quarter on quarter to P83,673 per square meter (sq. m.). This average was lower than the pre-selling prices of new projects, now around P100,000 per sq. m.

Rental values inched up at a "steady rate" of 2.4% quarter-on-quarter at P6,024/sq. m./year.

The BPO industry, meanwhile, remains the key driver of the office market.

Jones Lang LaSalle said office rentals would continue their upward trend as new supply is "not sufficient to meet the growing demand."

"Despite the current and expected huge demand for office space from the BPO industry, few developers have yet to embark on providing the much needed supply," it added.

While no new supply was launched during the third quarter, both Net Cube and One World Square in Bonifacio Global City are in their final stages of construction.

"As expected, vacancy rate continued its downward slide to 3.4%. Currently, most Grade A buildings like Robinson Summit and Sky Plaza enjoy an occupancy rate of 100%," Jones Lang LaSalle said.

Rentals have "moved up rapidly" in the past quarters as demand exceeds supply. The property firm said annual net rentals reached P8,081/sq. m./year.

-TC-

December 6th, 2007, 04:03 AM

http://www.businessmirror.com.ph/12062007/special_feature03.html

2008 outlook for RP’s real-estate sector
BusinessMirror
December 6, 2007

DESPITE the decline of the dollar and the buying power of would-be homeowners, Filipinos abroad are still finding value in Philippine based homes vis-à-vis US-domiciled houses, given the latter’s decline.

In a recent statement, Century Properties Inc. (CPI) chairman Jose E. B. Antonio shared his thoughts on the global economy, and its impact on Philippine real estate.

Overall, Antonio said that the trends and patterns that the real-estate sector experienced in 2007 will continue in 2008.

He predicts that the positive impact emanating from OFWs will continue for the real-estate sector. OFWs, as a proportion of our total buyers, continue to rise.

“I also believe the subprime meltdown has almost fully run its course. Even if more writeoffs ensue, the Asian economy, particularly the real-estate sector, will continue to roar, as evidenced by the sector’s overall health in the latter half of 2007.

Amb. Antonio added that real estate is very “location specific; “The cool-down in US housing has not affected real estate in Asia.”

Lastly Antonio said that the effects of inflation and rising oil/construction cost will affect developers’ margins. This is mitigated by the peso’s appreciation, which blunts the rise of the cost of imported goods. “Given this, I remain optimistic that the increase in demand will more than offset potential increases in costs,” he said.

CPI is a 24-year-old real-estate development, marketing and property-management firm with more than $2 billion worth of assets under management. It has more than 40 projects in its portfolio.

One of its latest developments includes The Gramercy Residences, the P5-billion mixed-use condominiums of Century Properties that will start excavation shortly.

Gramercy has obtained a development permit from the Housing and Land Use Regulatory Board (HLURB), an environmental compliance certificate from the Department of Environment and Natural Resources, and a temporary license to sell also from the HLURB.

The Gramercy Residences will rise on Kalayaan Avenue, Makati. It will be developed by Century City Development Corp., an affiliate of CPI.

Another project, the P1.5-billion, 850-unit Soho Central, the first transportation-oriented development in the Philippines, is expected to be delivered 12 months ahead of schedule.

The country’s first fully fitted and fully serviced condo, the P1.8-billion, 750-unit South of Market is 11 months ahead of schedule and is expected to be turned over to residents in January 2008.

Canyon Ranch, the P1.5-billion and first WiFi-integrated community in the south, has completed 60 homes, 27 of which have been turned over. The 17-hectare development was also the national entry to the housing category of Cemex Building Awards in Mexico in October 2007.

Excavation work for the P1-billion, fully fitted and fully furnished with three interior-design options Grand Soho Makati (or GSM) located in the heart of the Makati Golden Triangle is 100-percent complete, and structural work is underway. GSM is scheduled for turnover in December 2010.

3cr

December 12th, 2007, 01:17 AM

BPI unit expects downtrend in rates of housing loans
By Maricel E. Burgonio, Reporter
Manila Times
http://www.manilatimes.net/national/2007/dec/12/yehey/business/20071212bus8.html

INTEREST rates on housing loans are expected to go down further provided the peso continues to appreciate, according to the thrift unit of Bank of the Philippine Islands (BPI).

Alfonso Salcedo, BPI Family Savings Bank president, said lenders’ housing-loan rates are expected to slide by 50 basis points next year.

For its part, BPI cut its rates to a range of 8 to 8.5 percent, from 11 to 14 percent five years ago.

“Now is the best time to borrow,” Salcedo told reporters.

The bank executive said the growth in housing, as well as car loans will reach 15 to 20 percent.

He said the fast growth is a result of strong remittances of overseas Filipino workers, as well as low lending rates and a positive business climate.

Loans grew 17 percent to P58.5 billion at end-September this year. Depo*sits, however, stood at P84 billion.

As the peso further appreciates, OFWs are sending more dollars to pay for their monthly housing-loan amortization, Salcedo said.

“We haven’t seen any impact [of peso appreciation in remittance busi*ness]. OFWs are simple borrowers. They will just send more to pay for amortization,” he said.

“The speed of the peso is important where it will be,” he added, but refused to issue a forecast for the local currency.

Money sent home by OFWs averaged $350 to $550 per remitter. The Bangko Sentral ng Pilipinas assumes remittances to grow 15 percent this year from $12.9 billion last year.

At end-September, BPI Family increased its net income to P1.4 billion from P900 million in the same period last year.

The thrift lender is strengthening its branches and kiosks, as well as extending its banking hours to address customers’ needs and expand its market.

Natividad Alejo, BPI senior vice president and consumer banking group head, said about 60 percent of the bank’s monetary transactions are coursed through alternative channels while the number of transactions has grown to 22 percent.

Its intermediation level or volume of funds grew 6 percent year on year to P700 billion as of September this year.

3cr

December 12th, 2007, 01:20 AM

-TC-

December 14th, 2007, 04:11 AM

http://business.inquirer.net/money/breakingnews/view_article.php?article_id=106768

Central bank to relax rules on real estate lending
By Doris Dumlao
Inquirer
12/14/2007

For the first time since the Asian financial crisis 10 years ago, the central bank, Bangko Sentral ng Pilipinas (BSP), will relax certain restrictions on real estate loans to allow banks and borrowers to benefit from an emerging property boom, Inquirer sources in the BSP said.

The Monetary Board has started discussions on a framework that will enable commercial banks to increase their disbursements of real estate loans without exceeding the 30-percent limit on bank lending to this industry, the sources said.

Being considered is exemption of certain items from the limit of 30 percent of banks’ respective loan portfolios, such as socialized housing, low-cost housing, loans covered by the government’s Housing Guaranty Corp. (HGC), and infrastructure financing.

The government defines low-cost housing as worth less than P2 million and socialized housing as worth P300,000 or less.

The 30 percent limit on exposure in the volatile property sector was set by the BSP shortly before the 1997 Asian crisis erupted, after banking regulators found evidence that banks were becoming speculative on their real estate exposure. At that time, the 30 percent limit included loans of up to P3.5 million for acquisition or improvement of residential units.

With the proposed exemptions, BSP sources said, banks could increase real estate lending while sticking to prudential limits.

According to the latest BSP data, the banking system’s average loan exposure in the real estate sector is P179.7 billion -- about 10 percent of the industry’s loan portfolio of P1.65 trillion, not including bank-to-bank loans.

Counted as part of real estate loans at present are funds released for acquisition of residential property land and individual units, purchase of commercial property, development of subdivision for housing, industrial park, commercial property, memorial park, office or residential condominium and construction of infrastructure project.

In a separate interview, Nestor Espenilla Jr., BSP deputy governor for bank supervision and examination, said there was little chance that the property speculation seen among banks before the 1997 Asian crisis would be repeated anytime soon.

“Thing are different this time around. First, because of the change in accounting rules, you have to value properly,” Espenilla said.

He said capital regulations had changed and become tougher under the Basel2 capital adequacy rules, imposing penalty on practices that include holding on to foreclosed property assets.

-TC-

December 14th, 2007, 04:16 AM

lightsaber46

December 14th, 2007, 08:28 AM

BSP hints of new rate cut
By Eileen A. Mencias

The Bangko Sentral ng Pilipinas said it has more “elbow room” to cut borrowing costs after the US Federal Reserve reduced its key rate yesterday.

The central bank meets on Dec. 20 to decide on the overnight borrowing rate, and will take into account inflation, which is still below the government’s target. Bangko Sentral ng Pilipinas has reduced its key rate thrice this year to 5.5 percent, the lowest in 15 years.

“The Fed decision provides us with elbow room in monetary policy, particularly as the inflation outlook continues to be benign,” Bangko Sentral Gov. Amando Tetangco Jr. said in a mobile-phone text message to reporters.

“Nonetheless, this needs to be viewed together with the risks to the favorable outlook such as volatilities in international commodity and food prices as well as uncertainties in global financial markets which remain present,” he said.

The US Federal Reserve Board reduced its rates by 25 basis points to 4.25 percent, disappointing financial markets, which had expected a more aggressive action.

The central bank may cut its key lending rate for a fourth time next week after inflation averaged 2.7 percent in the first 11 months, lower than its targets for this year and next. A rate cut would give support to an economy poised for its fastest annual growth in at least three decades and damp gains in the peso, the best-performing Asian currency this year.

The peso, which has risen 18 percent this year, closed at 41.31 against the US dollar, up from Tuesday’s close of 41.40.

Majority of market observers expect a cut in the central bank’s key policy rates when the seven-man Monetary Board meets next Thursday.

Despite the rise in oil prices, inflation remains below the central bank’s target of between 4 and 5 percent for the year, with the government expecting inflation to average at 2.6 to 2.9 percent for the year.

The Philippines “will cut because liquidity growth has slowed, inflation is benign, commodity prices have come off recently and the peso is still strong,” said Luz Lorenzo, an economist at ATR-Kim Eng Securities Ltd. “They won’t be done cutting rates because the Fed isn’t done.”

The International Monetary Fund noted that inflation in the Philippines had been low on the back of well-anchored inflation expectations and an appreciating peso, which helped offset the effects of sharply rising commodity prices.

“The benign inflation outlook for inflation also provided an appropriate basis for the BSP to lower policy rates recently. Going forward, inflation is expected to remain within the BSP’s target range. However, rising food prices in the region and higher international oil prices pose upside risks that warrant careful monitoring,” the IMF said. Bloomberg

todjikid

December 15th, 2007, 05:38 PM

will there be a surplus come 2012 when thousands of units are turned over?

lightsaber46

December 17th, 2007, 08:00 AM

Cement group assures supply
will be ample for six years

THE Cement Manufacturers of the Philippines (CeMAP) assured enough supply of cement in the next six years, following the projected boom in the construction industry based on the rising demand for buildings to house business-process outsourcing.

“As it is, the cement industry is still grappling with problems of overcapacity. For the past five years, cement demand has been stagnant and capacity utilization has averaged only 60 percent. Local cement manufactures can adequately meet the demand, at least in the next six years,” CeMAP said in a statement.

The association discussed the issue of adequate supply and prices with the World Bank (WB) during a recent meeting and reported the industry is starting to recover from its losses in 2002 to 2003. “This was the period when the dumping of imported cement into the country triggered abnormally low prices,” it clarified.

Because of the soft demand and stiff industry competition, cement makers are still hard pressed to recover their input costs. Cement prices have risen by only 3.7 percent annually since the 1997 Asian financial crisis, which is way below the annual average inflation of 5.8 percent and the average rise in electricity costs of 9.4 percent during the period.

CeMAP said one of the major determinants of cement prices in the Philippines is power cost, which accounts for approximately 25 percent of the total cost. The Philippines has the highest electricity cost in the region or nearly double at 11 cents/kWh compared to just 6 cents/kWh in other Asean countries.
--Katrina Mennen A. Valdez

http://www.manilatimes.net/national/2007/may/15/yehey/business/20070515bus9.html

3cr

December 18th, 2007, 11:49 AM

Housing loan rates to dip further due to strong economy - VP
GMA News
http://www.gmanews.tv/story/73369/Housing-loan-rates-to-dip-further-due-to-strong-economy---VP

Housing loan rates in the Philippines will likely go down in the near future as the economy improves, vice President Noli de Castro, who is also the country's housing czar, said Tuesday.

In a statement, de Castro said no less than President Gloria Macapagal Arroyo expressed intention to lower the loan interest rates so that more Filipinos can afford to buy their own house and lots. De Castro sits as board chairman of the Home Mutual Development Fund or Pag-IBIG Fund.

The lower rates, de Castro said, will be caused by the country's surging economy.

"If that happens, housing loan interest rates are expected to go down as well as far as Pag-IBIG is concerned," he said.

He added: "I hope that our soldiers and other workers from the government take this opportunity."

In November of 2006, Pag-IBIG lowered its rates to to 6 percent for housing loans amounting to P300,000 from the earlier 12 percent to 13 percent rate.

"You cannot find such an interest rate in the country today. It’s only Pag-IBIG which is capable of offering that," de Castro said.

______________________________

Kabayan: Interest rates dropping, invest in property
By Francis Earl A. Cueto, Reporter
http://www.manilatimes.net/national/2008/jan/06/yehey/ofw/20080106ofw10.html

Overseas Filipino workers wanting to invest their money would do well to consider buying real estate property now that interest rates are going down.

Vice-President Noli de Castro has lately boasted that for the year 2007, the interest rates under the Home Mutual Development Fund or the Pag-IBIG has declined and may further plunge deeper, depending on the country’s economy.

Speaking at the recent housing fair for the Armed Force of the Philippines (AFP) in Camp Aguinaldo, de Castro said housing loan interest rates of Pag-Ibig can go lower if the local economy further improves.

De Castro said no less than President Gloria Arroyo expressed her intention to lower the interest rates so that more Filipinos can afford to buy their own house and lots.

Earlier, Pag-Ibig lowered its rates on housing loans upon the directive of de Castro who is also Pag-Ibig’s chairman of the board and concurrent chairman of the Housing and Urban Development Coordinating Council (HUDCC).

From 12 to 13 percent, Pag-Ibig adjusted its rates down to six percent for housing loans amounting to P300,000.

The move, he said, aims to enable lower income groups to avail of Pag-Ibig’s housing loans. Such adjustments, he explained, were designed to benefit government employees, such as teachers, policemen and soldiers.

De Castro said there is a very big possibility that the economy may improve further, based on the performance of the government in handling the economy.

“If that happens, housing loan interest rates are expected to go down as well, as far as Pag-Ibig is concerned,” he said. “I hope that our soldiers and other workers from the government take this opportunity,” he said.

The vice-president has been calling on all public servants to avail of the friendly rates of Pag-Ibig on housing loans, saying its 6-percent interest rate is the lowest charged so far in the country.

“You cannot find such an interest rate in the country today. It’s only Pag-Ibig which is capable of offering that,” he said.

“This is how serious the government is in providing homes to our homeless countrymen,” he added.

3cr

December 18th, 2007, 11:50 AM

lazybum

December 19th, 2007, 12:27 AM

-TC-

December 19th, 2007, 02:23 AM

The president can lower interest rates? If she can, that will be more a political ploy rather than a sound economic move. Lowering borrowing rates in an expanding economy will exacerbate inflation risks.

@lazybum... Despite the rapidly expanding Phil economy during the past several quarters, inflation rates have been benign and below the target rates set by the BSP (BSP does inflation targeting). Therefore, in a situation like this, interest rates can be lowered upto a certain extent with minimal risk to inflation.

lazybum

December 19th, 2007, 07:34 AM

@lazybum... Despite the rapidly expanding Phil economy during the past several quarters, inflation rates have been benign and below the target rates set by the BSP (BSP does inflation targeting). Therefore, in a situation like this, interest rates can be lowered upto a certain extent with minimal risk to inflation.

Inflation targeting is a good monetary policy...but what is keeping your inflation rate in check for the moment is the strength of the peso due to huge foreign remittances from OFWs. Why do you think your central bank has been secretly buying dollars lately? Because they are aware of what is going on in China, vietnam, Thailand, etc. The economy of the Philippines are now very closely tied to these countries specially China, and the appreciation of the peso may easily be overtaken by the rising costs of imports from these countries.

-TC-

December 23rd, 2007, 07:01 AM

http://business.inquirer.net/money/features/view/20071202-104434/Real_estate_Its_a_big_world_after_all

Real estate: It's a big world after all
By Romeo J. Pajarillo
Inquirer
12/02/2007

MANILA, Philippines--A MONTH ago when Tourism Secretary Joseph "Ace" H. Durano was in Germany, a university professor told him that every year he spends a month in his time-share unit in a condominium in Mactan.

That German is in the market segment that Durano is targeting for tourism promotion. "He is a long-stay tourist," he said. "The long-stay tourist is not here for retirement, but he spends his vacations here because he owns a second home. He is a captive market year after year. We must get more like him."

The tourism secretary told this story to Susan Barlin, a Fil-Am real estate professional who paid him a courtesy call last week. Once a nine-year-old girl in Malabon who sold banana-Q, Barlin now heads her own Southern California-based real estate company that markets and invests in real estate properties in the United States and in Europe. She is in town as president of Asia International Real Estate Expo and Conference (AIREEC).

AIREEC, an affiliate of the world's largest trade show for real estate in Madrid, fits Durano's idea of just one venue where he could pitch for second homes--resorts, time-share units, villas, residential villages--to foreigners. Participants arriving are from different sectors of the global real estate industry to attend AIREEC on Dec. 6-10, 2007, at the Philippine International Convention Center. They are property consultants, brokers, project developers, investment counselors, architects and engineers, other professionals and their staff from the 300 sectors related to the global real estate industry. The DOT, the Department of Trade and Industry, and the Department of Foreign Affairs are supporting the international event.

One big market of long-stay tourists for Durano, said Barlin, are people who are 65 years or older. Barlin, chair of Barlin and Associates, is familiar with this market segment, having marketed and invested in second-homes in Europe and the United States.

She estimated a total market size of more than 83 million people who are of ages 65 and above. This is broken down into 45 million in the United States; 20, Europe; 3.8, Canada, and 15, spread out in Asia over South Korea, Taiwan, Singapore, Hong Kong and Japan). This target market is worth $42 billion even if only one percent (or 838,000) of these targets buys a second home at $50,000 per.

Another big market is the baby boomers (born between 1946 and 1964) now hurtling towards retirement. According to Barlin, the Boomers generation has seen the greatest wealth transfer from one generation to the next. Their wealthy parents have been bequeathing old fortunes to the Boomers. This is in addition to the wealth that the Boomers themselves have been piling up with their own sweat.

The boomers, she said, believed that advances in health care are going to make them live 20 or 25 years longer than their parents do. But if they are to outlive their pension funds or cope with the rising costs of health care, the boomers are investing now in real estate assets for their appreciating values. With second homes in Panama, Costa Rica or the Philippines, they can enjoy their vacations cheap and get away from it all.

The global market is so big that local property companies don't have to worry about competition. The game is collaboration between many more Philippine companies and foreign allies to win global clients.

"Even as local companies pursue the OFW market, they can be partners with foreign real estate professionals," she said. "They can do cross-promotions of vacation properties in the Philippines and abroad, leverage on each other's marketing strength, share research and development costs or package innovative real estate products to help clients enjoy retirement or holidays."

The commercial real estate business is already a global business. With information accessible at Internet speed and with costs of travel down, investors search across national borders for higher yields and diversification of risks. Pricewaterhouse Coopers, a financial and management advisory firm, estimated that direct commercial real estate investment jumped to an all time record of $475 billion in 2005. That was an increase of 21 percent over levels of 2004. Cross-border investment flows accounted for 35 percent of total transactions, increasing by 43 percent to $164 billion. Inter-regional investment flows comprised almost a quarter of total transactions, soaring by 40 percent to $114 billion.

With AIREEC giving Secretary Durano his one-stop venue, Barlin believed that Secretary Durano would get his target of more long-stay visitors faster. With the business matching and the networking gala dinners and forum in AIREEC, Barlin is confident there could be more investment interests than available Philippine projects.

Barlin was not worried about the jitters caused by the Trillanes commotion among investors last Thursday. "What matters to investors abroad was that the government demonstrated it was capable of resolving issues quickly and efficiently," she said.

-TC-

December 25th, 2007, 07:43 AM

http://showbizandstyle.inquirer.net/lifestyle/lifestyle/view_article.php?article_id=108293

Housing developers satisfied with current industry trends
By Charles E. Buban
Philippine Daily Inquirer
12/22/2007

MANILA, Philippines—For the largest national organization of subdivision and housing developers in the Philippines, the country’s housing industry may finally be seeing the light of day.

“The country’s housing industry is experiencing impressive growth since the start of 2007, which we had not experienced for quite a long time,” noted Roy Calleja, national president of Subdivision and Housing Developers Association Inc.

Calleja believes that the country’s housing industry may be breaking out from the boom-bust cycle.

Citing a recent Colliers International Philippines Research report, Calleja said things are picking up especially in the low-cost housing segment where licenses approved by the Housing and Land Use Regulatory Board for the period from January to June 2007 has reached 25,306 units, a 54 percent increase when compared to to same period last year (16,485 units).

Demand on the rise

“Also, the demand from overseas Filipino workers’ families is on the rise considering that a growing portion of the remittances they receive are now going into housing investments. Property developers are increasingly going into housing development projects targeted at this rapidly growing market segment,” Calleja reported.

Remittances increased 15.2 percent year on year to $11.9 billion (P495 trillion) in the first 10 months of year, according to a recent Bangko Sentral ng Pilipinas data adding that OFWs were encouraged to send funds at home due to enhanced and expanded financial services and products of banks and non-bank channels.

More conducive

Calleja also said conditions here are now more conducive to more homebuyers, thanks to several housing rules and regulations that SHDA helped propose and push before concerned agencies.

“As a result, Pag-Ibig reduced in 2006 their interest rates to six percent to make housing loans more affordable to low-income families. With the reduction, loan packages up to P300,000 have an interest rate of 6 percent, down from 9 percent,” Calleja said.

“The interest rate for loan packages between P300,000 to P500,000 dropped to 7 percent from 10 percent. From 11 percent, loans over P500,000 to P1 million now carry a 10.5 percent interest while those for loan packages of P1 million to P2 million will be lowered to 11.5 percent from 12 percent,” he said.

Calleja also added that repayment period for loans up to P750,000 has also been stretched to 30 years, compared to the 20-year maximum under old guidelines for loans exceeding P500,000.

Consultative body

“Indeed, SHDA has been acting as a consultative body to the Housing and Urban Development Coordinating Council policymaking body. As such, it gives feedback and inputs from the housing industry practitioners which serve as basis for proposed policy changes, procedures as well as in the formulation and promulgation of executive orders and memorandum circulars,” Calleja explained.

Executive Order 45 is one example of this coordination.

This law prescribes specific period for a government agency and the local government units to act on applications for certifications, clearances and permits for housing projects (i.e. subdivisions or condominiums) and provides an option for the applicant-developer where the government agency or LGU refuses or fails to dispose of an application for said applied for housing permit.

“It is important that national organizations such as SHDA, to be in the forefront in dealing with issues and coordinate them with concerned government agencies and allied industries. This promotes and safeguards not only the interest of our members but also the public as well,” Calleja said.

At the moment, he said that SHDA is closely monitoring proposed bills in the Senate including the one that seeks to establish a socialized and low-cost housing loan restructuring program; and another, which seeks to promulgate a Magna Carta for homeowners association.

“SHDA is currently a member of the technical working group deliberating on these bills prior to their enactment,” Calleja informed.

Representations

He also said that aside from government agencies, SHDA has also coordinated with private sectors particularly manufacturers on the issue of spiraling cost of construction materials.

With regard to the reduction of cement price, Calleja reported that SHDA has coordinated with key officers of the country’s three major cement manufacturers—Holcim, LaFarge and Cemex.

In this connection, SHDA instructed its member-developers to submit a conservative estimate of their cement requirements for a year which they can commit to so that an agreement could be reached with these manufacturers.

“We are confident that with the active support and participation of all our members in dealing with our partners whether in the government or private sectors, the coming year will be a continuation of this positive developments that the housing sector has enjoyed in 2007,” Calleja said.

-TC-

December 26th, 2007, 04:38 PM

SPECIAL REPORT

http://business.inquirer.net/money/topstories/view/20071224-108650/Xmas_spending_evolving_toward_more_important_purchases

X'mas spending evolving toward 'more important' purchases
By Daxim Lucas
Philippine Daily Inquirer
12/24/2007

(Part 1 of 2)

A FEW years ago, the holiday season would have meant lots of free time from work for John Victor Antonio.

His business, after all, is the real estate industry. Sales in this business are not known to be pronounced during Christmas, where most of the spending is instead channeled toward food and consumer items.

Not anymore.

"Christmas has become quite a busy time for us," he said in an interview. "More and more, we see clients buying property in December so we have had to adjust."

Antonio is the chief operating officer of Century Properties Inc., a firm which has, of late, focused more and more of its selling effort toward the estimated eight million expatriate Filipino community.

The reason for this is the sharp increase in recent years of remittances sent home by overseas Filipinos, which has boosted the local economy, encouraging spending not only on consumer goods but also on so-called "consumer durables" as well as investments.

According to Antonio, the propensity of expatriate Filipinos to spend either for themselves or their local relatives becomes even more pronounced when they visit the Philippines during the holidays as "balikbayan" (returning overseas Filipinos).

"From February to November, our target is to build relationships with them," he said. "But from late November to January, our target is to actually sell because that's when they're all here."

Antonio points out that while Century Properties sells about 50 units a month from the February to November period, this number jumps to 70 units a month in December and January.

Overseas Filipino workers (OFWs) have become so influential in the market that as much as two-thirds of Century Properties' sales are made to expatriate Filipinos, he said.

"We're very focused on OFWs, but we can see this phenomenon even with other companies where up to 30 percent of sales are made to this segment," Antonio said.

The Bangko Sentral ng Pilipinas (the Philippine central bank), which closely tracks where dollar remittances are used, agrees that the spending patterns have been changing of late.

"We see more people setting aside money for investments," BSP Deputy Governor Diwa Guinigundo said in an interview. "People's attitudes are changing."

He pointed out that while the beneficiaries of OFW remittances tended to splurge on consumer items in the past, evidence is emerging that a steadily growing percentage of funds are being set aside for education, savings and investments, including investments in real estate.

More importantly, Guinigundo pointed out that spending on traditional big-ticket purchases have also declined.

"Spending on motor vehicles has come down, while spending for housing is always there," he said. "I guess people are beginning to understand that remittances will not be there forever." (To be concluded)

----------------------------------------------------------------

http://business.inquirer.net/money/topstories/view_article.php?article_id=108768

Dollar remittances fuel new affluence among Filipinos
By Daxim Lucas
Philippine Daily Inquirer
12/25/2007

(Conclusion)

EXPATRIATE Filipinos have so far sent home a record-breaking amount of dollar remittances, fueling a spending boom that has permeated almost all sectors of the economy.

According to the Bangko Sentral ng Pilipinas (BSP, the Philippine central bank), overseas Filipinos workers have sent home $11.9 billion as of the first 10 months of the year. This is expected to rise further to at least $14 billion by yearend.

Including the amount sent home through informal remittance channels, the conservative estimate of OFW funds sent home would stand close to $20 billion by the end of this year--almost 15 percent of the country's gross economic output, which is expected to be worth about $137 billion this year.

Nowhere is this phenomenon more evident than in the country's numerous malls, which have been packed with holiday shoppers in recent weeks.

"Sales have really been strong for us this year," said Jeffrey C. Lim, the chief financial officer of SM Prime Holdings Inc., the company which runs the country's biggest chain of shopping malls.

In an interview, Lim said that same store sales in the various SM malls have so far shown a 7-percent increase on the average, surpassing sales reported in recent years.

"This is a very good figure for us," he said, adding that this report has yet to factor in sales from the previous weekend, when shopping was expected to peak ahead of Christmas Day.

"We are still looking at the numbers, but for certain, [sales] will be stronger than last year's," Lim said.

According to the latest BSP survey, food and household needs continued to dominate the share of spending of consumers in general, but more so in the case of OFWs' local beneficiaries.

So-called "consumer durables" like appliances also rank high on the list--a fact that is not lost on mall operator SM.

"During these times, it is really the food [segment] that does very well," Lim said. "When people go shopping, they also eat."

While value-for-money shopping has always been a strong theme for SM, Lim noted that the growing affluence has also resulted in stronger sales for many of the higher-end retailers in the malls.

"Many high-end stores at the Mall of Asia, for example, are doing very well," he said. "I guess [sales are] increasing across the board."

Lim is hesitant to attribute the entire phenomenon to OFW remittances, but cited anecdotal evidence that the massive dollar inflows experienced this year are giving Filipinos the ability buy more expensive items.

"One important indicator is the activity at the foreign exchange counters in the malls," he said. "We can see that the lines are always long and that people are always exchanging dollars [for pesos]."

BSP Deputy Governor Diwa Guinigundo acknowledges that many Filipinos now feel more affluent with the surge in dollars sent home from abroad.

He is worried that so much money is being spent on consumption, but he is also hopeful that Filipinos are starting to look toward the longer-term future--as evidenced by rising savings and investment in real estate.

"We also see people allocating more for education, and for me, this is also an investment," he said. "People should not only spend. They should also save."

lightsaber46

December 27th, 2007, 03:04 AM

Executive, Congress back 1-M homes
plan for low-income folk

By Paul Atienza
Correspondent

THE national government, in partnership with the private sector, is spearheading the 1-million homes program which aims to construct and deliver a million housing units to middle- and low-income families, especially those with members working overseas.

Rep. Rodolfo Valencia, chairman of the House Committee on Housing and Urban Development, said the problem of shelter in the Philippines is tremendous—with a current backlog of 1.2 million units—and demands priority attention from the government, not to mention considerable resources.

Valencia has the full backing of housing czar and Vice President Noli de Castro, Sen. Miguel Zubiri who chairs the Senate Committee on Housing and Urban Development, and Speaker Jose de Venecia Jr.

Rapid population growth, said Valencia, partly accounts for the severe housing backlog, but acknowledged that various other factors previously cited by experts also bear looking into—including the need to rationalize the focus of property developers to the greater part of the market that needs houses, or the low- and middle-income families, while providing the latter the means to afford decent shelter through a state-supervised mortgage program.

“The country’s continuous population growth, considered one of the fastest-growing in the world, increases the demand for housing. Last year alone, [the Philippine] population was estimated at 86 million. By 2010 it is expected to hit 100 million,” Valencia said.

According to government sources, about 3.7 million housing units are needed for the period 2005-10. This means the Philippines has a housing backlog of 1.2 million units and a projected demand of 2.5 million units.

“For this, the government must earmark P7 billion annually for socialized housing and urban development, with 10 percent to be allocated for administrative and operational expenses,” Valencia said.

Valencia stressed that based on the figures, the shelter agencies and the private sector can produce approximately 200,000 housing units per year, or one million homes within five years, to fill the backlog and meet the target.

Housing is expected to contribute one million jobs from 2004 to 2010. The construction of a low-cost housing unit alone requires an average of eight persons working for three weeks or 124 man-days.

The government’s decongestion program for Metro Manila should also be looked into, according to officials, as this requires the building and development of housing communities outside the metropolis.

Past studies have blamed the weakness of this aspect of shelter and urban development—the poor preparation and unsustainability of satellite communities where the urban poor are relocated—for the failure of housing schemes, with thousands streaming back into crowded cities a few months after getting their own “homes” in the suburbs.

Speaker Jose de Venecia Jr. said the government has so far relocated to nearby provinces a mere 20,000 families affected by transportation projects.

De Venecia said those affected had lived along the stretch of the North Rail Project. He said that another batch of 20,000 families are now in the process of relocation.

He explained that the Philippine government had explored talks with several countries for assistance to finance the project, but only the People’s Republic of China positively responded, and asking only one thing—to relocate the informal settlers (squatters).

Valencia said the project, if successfully implemented, will help solve the perennial problem of poverty in the Philippines, thus curbing social unrest and bringing about peace and order.

“These positive developments are sparked by the resurgence of dollars from remittances, purchase of properties by overseas Filipino workers and the effects of the fiscal reforms instituted by the government,” Valencia said.

Under the Medium Term Philippine Development Plan, the government targets to build the 1 million homes in 3-5 years.

“This means we need to build 200,000 homes per year or at 548 homes per day to reduce the backlog,” Valencia said.

3cr

December 27th, 2007, 07:04 AM

High costs weigh on RP’s attractiveness as investment site
http://www.bworldonline.com/BW122707/content.php?id=104

THE PHILIPPINES saw housing prices increasing in 2007, but high costs are seen to weigh on the attractiveness of the country, a statement from the Global Property Guide said.

The Philippines ranked sixth among 38 markets in terms of growth in housing prices.

"In the Philippines, demand for houses and condominiums has come mainly from families of Overseas Filipinos," the statement said.

The Philippines, which posted a 13.04% growth for 2007 from 9.63% in 2006, trailed behind Bulgaria, which posted a 30.59% growth in housing prices, Shanghai with a 27.85% growth, Singapore with 27.59%, Estonia with 23.38%, and Lithuania with 13.64%.

However, the statement also said that high costs would be a problem for the country going forward. "The Philippines... has high yields, but similarly discouragingly high transaction costs and high rental income taxes," the statement said.

The statement added that Indonesia was in a similar situation. While it was "attractive," it had problems as an investment destination.

Indonesia and Malaysia saw housing prices declining, to 5.24% from 6.6% and 3.20% from 4.80%, respectively, while housing prices in Thailand, which has been grappling with political problems, fell to -0.78% from 1.87% the previous year.

filcan

December 28th, 2007, 01:44 AM

Vista Land upbeat on 2008 prospects

By Elizabeth Sanchez-Lacson
Philippine Daily Inquirer
First Posted 06:22am (Mla time) 12/28/2007

MANILA, Philippines -- Property firm Vista Land and Lifescapes Inc. is upbeat on the property market in 2008 due to a better economy and strong demand from overseas Filipino workers for housing projects.

In a statement, Vista Land president Benjamarie Serrano said low inflation, steady interest rates, a firmer peso, increasing tourists and more foreign investments have kept the economic environment stable.

She also said that OFWs would remain the biggest market for the property sector.

The Bangko Sentral ng Pilipinas recently said it expected total remittances from OFWs to exceed $14 billion this year.

About 60 percent of Vista Land’s sales come from Filipinos working or residing abroad.

Vista Land, the country’s biggest homebuilder led by the family of Senate President Manuel Villar, has lined up new projects starting in 2008 for its high-end luxury homes brand Brittany and middle market housing brand Crown Asia, Serrano earlier said.

Among these projects identified are the 195-unit condominium project dubbed KL Mosaic in Legaspi Village, Makati City; a 3.1-hectare mixed-use development in Quezon City; two leisure homes development in Boracay and Cebu; an expansion of its Cerritos housing project covering 6 hectares in Cavite under its Camella Homes brand; a second building of its low-rise residential condominium in Taguig City (809 units) called Pacific Residences II; its first high-rise condominium in Makati under the Crown Asia brand in Salcedo Village; and Ponticelli II, an expansion of its fastest selling residential enclave in Cavite.

3cr

December 28th, 2007, 07:38 AM

Ayala Land ready for legal battle in patent case
By Reinir Padua
Friday, December 28, 2007
PhilStar
http://www.philstar.com/index.php?Headlines&p=49&type=2&sec=24&aid=20071227113

Ayala Land Inc. has denied any patent infringement by its subsidiary Avida Land Corp. on the housing system invented by Edgardo Vazquez. In a disclosure to the Philippine Stock Exchange (PSE), Ayala Land said Avida “strongly believes that it did not copy any patent held by Mr. Vazquez.”

Ayala Land issued the statement after Avida, a wholly-owned subsidiary, was ordered by a Quezon City court to pay about P140 million to Vazquez for allegedly using the latter’s patented housing system in its developments.

In a decision issued last Dec. 18, Judge Reynaldo Daway of the Quezon City Regional Trial Court Branch 90 ordered Avida to pay Vazquez P90 million as “temporary damages or reasonable royalty” with interest of six percent annually since the case was filed; P5 million as moral damages; P1 million as exemplary damages and P500,000 for attorney’s fees and expenses of litigation.

Vazquez invented the “Vazbuilt” modular housing system that builds houses in weeks using prefrabricated materials that he said can withstand typhoons and earthquakes. He was granted a patent in 1994.

Ayala deputy compliance officer Alfonso Javier Reyes said the company has yet to receive a copy of the court decision.

Reyes said the company knew of the court decision only through media reports that came out after Vazquez held a press conference to publicize the decision.

“If Avida confirms that the court’s decision is indeed adverse, it intends to pursue all available appellate remedies to protect its rights and interests,” he said in the disclosure addressed to lawyer Pete Malabanan, head of the Disclosure Department of the PSE.

Vazquez’s camp had stressed the importance of the case as it was the first court litigation in the country that involved a patented original invention.

Two years before Vazquez invented Vazbuilt, he entered into a partnership with Avida, known then as Laguna Properties Holdings Inc., in 1992, for the latter’s low-cost housing projects in Laguna and Batangas. The partnership lasted until 1997.

Vazquez, however, found out that Avida had allegedly used his invention in another project in Quezon province without his consent.

The specific material that Avida had allegedly used was the exterior wall structure of the housing unit characterized by the H-shaped section with a pair of additional opposed grooves patented in the name of Vazquez.

Reyes however stressed that Avida uses patented technologies licensed to it by two foreign companies, citing the UK-based Tex holdings PLC and the “Phenix” system offered by French company Maison Individuelles SA, which are covered not only by Philippine patents but are also patented abroad.

“These two systems involve building processes and end products that are different from the housing unit described in Mr. Vazquez’s patent,” Reyes said.

3cr

December 29th, 2007, 11:23 AM

PROPERTY SECTOR SEES CONTINUED STRONG DEMAND
Due to ofw remittances, more tourists
By ALBERT CASTRO
Malaya
http://www.malaya.com.ph/dec29/busi1.htm

The property sector expects continued strong demand for condo units, single detached houses next year as migrant workers continue to invest in properties and tourists demand better facilities.

Vista Land and Lifescape, Inc. president Jing Serrano said the economy is stable as shown by low inflation, steady interest rates and an appreciating peso building up confidence in both developers and buyers.

Serrano also noted that the expected increase in foreign investments, new and enhanced business strategies, and an increase in the number of tourist arrivals "augurs well for the property sector".

The Bangko Sentral ng Pilipinas recently said it expected total remittances from overseas Filipinos to exceed $14 billion in 2007. Including the amount sent home through informal remittance channels, the conservative estimate of OFW funds sent home could stand close to $20 billion by the end of this year, or almost 15 percent of the country’s gross economic output," said Serrano.

"Over the years, and thanks in part to the efforts of the POEA and OWWA, a larger portion of these remittances have been channeled to savings and investments such as real property. All property developers will confirm that OFs and OFWs form a significant part of their customer base," she added.

Serrano said developers are always on the watch for the change in taste among the OF and OFW market like in recent trends where these people prefer to purchase house and lot package over other real estate products. They also prefer to buy units in their hometowns or provinces where their families are, according to Serrano.

Vista Land for one is also looking into developing properties in the provinces, which intends to tap into this particular market.

"We have through our subsidiary Communities Philippines, launched a number of developments this quarter in ten provinces," said Serrano.

Last October Communities Philippines kicked-off the expansion of its Sorrento development in Mexico, Pampanga; and the Andalusia in San Fernando, Pampanga. In November, Communities Philippines has also introduced Prominenza in Baliuag, Bulacan. As of November, Communities Philippines has 28 projects covering 405 hectares under development in 15 cities and municipalities outside Mega Manila.

It has presence in Pangasian, Pampanga, Bulacan, Batangas, Iloilo, Cebu, Leyte, Cagayan de Oro, and Davao.

With the regional expansion, Vista Land strengthens its position as teh property developer with teh widest geographical reach, with 84 projects in its portfolio covering 1,167 hectares under development in 33 cities and municipalities across the nation.

Vista Land recently posted a consolidated net income of P2.7 billion in the first nine months of the year, 116.7 percent increase from the same period last year. Vista Land total consolidated assets are at P40.219 billion.

"The influx of tourist will require the development of more hotel and other accommodations to cater to the growing market.

-TC-

December 29th, 2007, 03:00 PM

http://services.inquirer.net/print/print.php?article_id=109278

2 DILG guidelines help developers vs delays
By Charles E. Buban
Philippine Daily Inquirer
Posted date: December 28, 2007

MANILA, Philippines—Unnecessary delays in the issuance of certifications, clearance and permits for housing projects have been a common complaint among developers for years.

This was somehow solved with the passing in 2001 of Executive Order 45 that prescribes time periods in the processing of housing-related certifications, clearance and permits, for each government agency and the local government unit.

This same law directs the sangguniang panlungsod/bayan, the city/municipal mayors to act on applications for development permits within 30 days from receipt of a complete application.

More complaints

“However, another problem stemmed up. Our members have been complaining to the association as well as to the Department of the Interior and Local Government and the Housing and Urban Development Coordinating Council about delays in getting barangay clearances from the punong barangays, as well as complaints about some barangays imposing exorbitant fees for their clearances, or imposing fees not supported by a barangay ordinance,” lamented Roy Calleja, national president of Subdivision and Housing Developers Association Inc.

Calleja related that to address this dilemma, the association’s board officers, governors, advisers and committee chairpersons coordinated with Local Government Secretary Ronaldo Puno who later issued two guidelines and time periods in the issuance of development permits and barangay clearances for housing projects.

As a result, Puno issued two memorandum circulars—MC 132 on Oct. 2 and MC 143 on Nov. 7.

Power given

He clarified that the Local Government Code of 1991 already gave the sanggunians of cities and municipalities the power to process and approve subdivision plans for housing purposes and that the sangguniang barangay should act on the application for a barangay clearance (a prerequisite before the issuance of a mayor’s permit) within seven working days from its filing.

Failure to do so would automatically mean the city or municipal mayor may now issue the said license or permit.

To supplement this law, MC 132 enjoins the sangguniang panlungsod/bayan to strictly observe the time frame provided for under EO 45.

“Secretary Puno made it clear, through the directive, that the amount of reasonable fee which shall be required for the issuance of a barangay clearance for a housing project, should only be that amount limited to cover only the cost of regulation as fixed by a barangay ordinance as stated in the Code,” Calleja reported.

No collection of fees

He said that in the absence of any barangay ordinance, the memorandum states that no fee should be collected in securing the same.

On the other hand, MC 143 reminds all punong barangays that in evaluating applications for barangay clearances by housing project proponents, documents required for submission in relation to the barangay clearance application shall only be limited to those which are relevant.

“The memorandum clarifies that such requirements should not anymore dwell on any other documents that pertains to matters not anymore within the scope of its regulations, such as financial statements, income tax returns, and the like, which a number of our members have been complaining about,” Calleja said.

The two memorandums remind that failure to comply would result to administrative sanctions provided for under EO 45 and Republic Act 9485 (the Anti-Red Tape Act of 2007).

odyssey

December 30th, 2007, 04:08 AM

US property developers to visit

A large group of US-based property developers is arriving in Manila early next year to look at possible sites for leisure and entertainment projects in the provinces.

The group, composed of 39 real estate developers, will scout for prospective investments in Cebu, Boracay, Palawan, and Mindanao, said Leon Katz, chief executive officer of Global Investments and Capital Corp.

Mr. Katz’s company was the business matching arm of the recently concluded Asian International Real Estate Expo and Conference (AIREEC) in Manila.

He said these developers own global brands aimed at high net worth clients in Asia, Europe, United States and the Middle East.

The developers are particularly interested in large tracts of land available for mixed-used development that are free from legal issues.

"They indicated growing demand by high-end clients for properties transformed into luxury hotels, vacation resorts, condotels, retail centers and major gaming and entertainment facilities," Mr. Katz said.

The developers are considering joint ventures or other forms of business collaborations with property owners.

Industry experts earlier predicted sustained growth of the Philippine property markets, driven mainly by robust economic growth.

Special Envoy for Investment and Tourism Promotions Susan G. Susan, who’s also AIREEC president, earlier said investors continue to look at the Philippines as a viable investment site because of improved economic conditions.

An international industry expert earlier said emerging real estate industry players in Asia and the Pacific, the Philippines included, can tap new, unexplored markets worldwide by going online.

Aida Turbow, director of New Homes Resort International Division for Prudential Florida WCI, said the Philippines can take advantage of internet marketing to reach potential real estate markets.

"Filipino real estate professionals are well-connected, but we need more of it. There’s a need to enlarge...expand your connections to tap into new networks," she said.

Ms. Turbow said she expects strong growth for the Philippine property sector, adding a number of investors are setting their sights here due to a more favorable business climate. She said the Philippines could target baby boomers worldwide, which total about 160 million. — B. S. Sto. Domingo

http://www.bworld.com.ph/BW122907/content.php?id=053

-TC-

December 30th, 2007, 07:19 AM

2008 Property Forecast

http://services.inquirer.net/print/print.php?article_id=108291

2008 PROPERTY FORECAST : ‘Positive growth from OFWs, but be wary’
By Tessa Salazar
Philippine Daily Inquirer
December 22, 2007

(First of two parts)

MANILA, Philippines—The real estate growth the Philippines experienced in 2007 will continue in 2008.

CB Richard Ellis Philippines says the industry is expected to sustain its upward trajectory in 2008, driven by continued demand in business process outsourcing and traditional business sectors, an increased number of real estate players going public and higher foreign investment.

Rick M. Santos, chair of the full-service real estate services firm and managing director of CBRE Hong Kong, said in a statement that it is expected for the Philippine real estate market to grow at 8.5 percent next year and “at a similar rate in the medium term.” He said this is a sign to start building relationships for investing and generating profit.

And despite the decline of the dollar and the buying power of would-be homeowners, real estate player Century Properties Chair Jose EB Antonio said in a statement that the positive impact emanating from OFWs will continue for the real estate sector. He said that Filipinos abroad are still finding value in Philippine-based homes vis-à-vis US domiciled houses, given the latter’s decline. He added that real estate is “very location specific; the cool-down in US housing has not affected real estate in Asia.”

Caution

Prince Christian R. Cruz, senior economist for Global Property Guide, however, said substantial market reform would be needed to sustain the real estate boom.

Though the market is positive, there are warning signs and that “the government should respond to these warning signs.”

Cruz cited the BSP Consumer Expectation Survey for Q4 2007, which indicates that only 1.3 percent of OFW households in NCR intend to use the remittance for purchasing a house. He added that during the second quarter of 2006, as much as 10.9 percent of OFW households said that they intend to purchase a house.

“Our local buyers here should be given enough attention also, not just from the players but especially from the government, because right now the government is not really doing anything to address the concern that the market is fueled primarily by overseas buyers,” he told Inquirer Property in a phone interview.

Cruz said that some agents have reported that about 60 to 90 percent of properties have been sold to an OFW or a Filipino immigrant abroad and their families.

“The problem with this is that it is vulnerable to severe peso appreciation against the dollar, as what we are witnessing right now. About half of OFWs work in the Middle East, while a significant amount work in Hong Kong; they all earn in dollars. On the other hand, about 70 percent of Filipino immigrants abroad are in the United States.”

Cruz added that another warning sign is the amount of loans to the local market.

Most important message

“The most important message I want the real estate readers and the government should know is that the market should expand more, not just to the overseas Filipinos but to the local demands. If you rely entirely on overseas Filipinos given the weakening of the dollar, then you should start looking at the local market.”

He added that as the peso appreciates against the dollar, overseas Filipinos’ foreign earnings buy less Philippine goods. And if the peso continues to appreciate, OFWs would find property purchases to be more expensive.

Cruz explained: “For the real estate mortgage to persist, demand from local buyers should strengthen. In other countries, a housing market boom is accompanied by a mortgage boom, i.e. most property purchases are financed by a loan.”

In the Philippines, even with an ongoing real estate boom, loans to real estate, renting and business activities contracted by 7 percent from Q4 2006 to Q1 2007. Loans to the real sector fell 0.5 percent to end Q1-2007 from a year earlier. This was in sharp contrast to the 12.9 percent increase in loans to end 2006.

The lack of mortgage options in the Philippines continues to hamper the real estate market. Despite the drop in the base interest rates, mortgage rates remain high, typically, at double digits. Most mortgages in the Philippines are indexed to the Treasury bill rate, depending on the length of loan maturity. The 364-day T-bill rate was at 5.6 percent from June to December 2007, significantly lower compared to the average of 14.4 percent in 2000.

Cruz said: “The number of companies going public next year and then all these supplies, to a certain extent, can create a negative impact on the market as a whole. If there are too many players, the market might be swamped with too many properties … similar to pre-Asian crisis scenario (in 1997).”

--------------------------------------------------------------------------------------------

http://services.inquirer.net/print/print.php?article_id=109277

2008 PROPERTY FORECAST : What to expect in 2008
By Tessa Salazar
Philippine Daily Inquirer
December 28, 2007

(Conclusion)

MANILA, Philippines—Despite the boom in property developments in 2007, there have been obstacles, or what Global Property Guide calls “alarming signs,” that would tend to weigh down the property sector:

• The boom is actually limited to new developments and condominiums.

• Several potential buyers are still wary of problems associated with fraudulent titles.

• High transaction costs and the lack of information also hamper the real estate market. Prince Christian Cruz, senior economist of www.globalpropertyguide.com (http://www.globalpropertyguide.com), added that condominiums and new subdivisions are generally free of these concerns; hence, they benefit more from the boom.

Emerging markets

Richard Raymundo, director for Research & Consultancy, Colliers International, predicts what 2008 holds for the office, high-rise residential and hotel and leisure sectors.

The office sector will still be the banner sector for 2008. Rents will continue to post strong growth as they ride on the back of a strong demand from the BPO segment, with suppliers scurrying to keep up. In 2007, rents went up by as much as 26 percent. Rents in the best buildings in the Makati CBD have breached the P1,000-per-square-meter-per-month mark. This increase comes on top of a 30 percent rent hike in 2006.

Rents could increase by as much as 15 percent in 2008. Strong demand will still come from the BPO (which include call centers) segment. Industry analysts predict that the BPO segment would need 1.85 million sq m of office space from 2008 to 2010.

However, the announced supply has only been 1.58 million. This is broken down to 634,000 sq m under construction and 945,000 sq m on the drawing boards. “If the planned developments do not push through, the supply would remain tight,” Raymundo assesses.

Vacancy in all districts is at single digit levels, while there is not much new supply to be added in 2008.

• Makati CBD. End 2007 vacancy is at 3 percent. Only 60,000 sq m of space will be complete in 2008. Office vacancy will remain below 5 percent throughout 2008.

• Ortigas Center. End 2007 vacancy is at 4 percent. Only 20,000 sq m of office space is being constructed for completion in 2008. As with Makati CBD vacancy rates, Ortigas CBD vacancies will remain below 5 percent throughout 2008.

• Fort Bonifacio. “The fastest growing area in the country right now has also been benefiting from the office “spillovers” of Makati CBD. End 2007 vacancy here stands at 10 percent. Space for completion in 2008 is estimated at 200,000 sq m. While this may seem a lot, a number of projects are already getting precommitments for leasing space.

High-rise residential condominiums posted strong sales 2007. High-rise residential living is now broader, targeting middle-income (starting prices of P1.25 million per unit) to the high-end (in excess of P15 million per unit) segment. Some trends in this sector are:

• Accessibility is a key factor, particularly for middle-income segment. Thus, expect more of these kinds of development along the Edsa corridor.

• Heavily themed projects are in, given the increased competitiveness. “There are new developers in the market who are even getting good presales take-ups,” Raymundo observes. The year 2007 witnessed new concepts such as Z-lofts, themed cluster developments, interesting pocket gardens and sole amenity floors. Expect to see more of these coming out in 2008.

• Level of facilities and amenities would be taken a notch higher to differentiate projects. This will be seen in the high-end segment wherein the level of facility and amenity will justify the price premiums.

• Price premiums would be based on proximity to retail centers, schools, business districts and transportation hubs.

• High-end developers will test the P110,000 per sq m price level. This is marketable for projects launched in prime locations, and having excellent amenities.

• Expect the emergence of cluster residential condominiums executed as an enclave. This would highlight the sense of exclusivity and privacy—a luxury in congested urban centers—to select buyers.

• Based on selling prices that increased 10 percent in 2007, expect an additional 10 percent increase in 2008. Some locations, though, may find it harder to impose price increases due to relatively larger supplies. An example of this would be Fort Bonifacio. Currently, nearly 7,000 units are being sold and constructed here from 2008 to 2011.

Trends

Hotels and leisure developments will figure more prominently in 2008. Some trends:

• Leisure is catering to a broader market. So leisure lots are now being offered in smaller cuts and more affordable total contract prices such as Playa Calatagan. There are now also condominium projects that make it more affordable and easier to maintain. Examples of these are Hamilo Coast, Terrazas de Punta Fuego and Alta Vista in Boracay.

• More leisure concepts are being launched. Boutique hotels will be more prominent. These are hotel developments with less than 30 rooms but are high on style and amenities.

• The announcement of more hotels (Raffles and Fairmont in Ayala Center) in the Makati CBD will be a welcome relief. The year 2007 saw frustrated travelers finding it hard to book hotel rooms in the Makati CBD. The high occupancy rates in the Makati CBD and increasing tariff rates (the $150-$200 effective rate is now being achieved) have led to spillover demand to other locations such as the Bay Area in Manila.

• Fort Bonifacio will likewise host more hotels to augment the tight supply in the Makati CBD. Shangri-La is the most prominent, having acquired a 1.5-hectare property in the former military base.

Emerging markets

Santos said investment in the Asian real estate industry has historically been concentrated in mature markets such as Tokyo, Singapore, Hong Kong, and fast-growing cities in China.

The downward pressure on returns in these mature markets and excess liquidity in capital markets is encouraging investors to look seriously at emerging markets in Southeast Asia, resulting in a steady advance in investments there.

“The Philippines, in particular, is slowly growing in terms of investment as a result of the huge demand for offshore services,” Santos said. “And that growth is accelerating,” Rick Santos, CB Richard Ellis Philippines chair, said in a statement.

Santos added that another factor influencing the Philippine real estate sector is an increase in the number of initial public offerings (IPO) by real estate developers. From 2004 to 2007, 21 firms went public, seven in 2007.

Also in 2007, three other real estate companies—Anchor Land Holdings, Vista Land and Lifescapes and Eton Properties Philippines—announced plans for IPOs. Funds generated by the IPOs are expected to be invested in new projects.

“As a result of these recent developments, global insurance conglomerate ING has placed the Philippines in the top three investment sites among emerging markets in 2007,” Santos said.

“Foreign property investment in the residential market has experienced robust growth, partly as the result of an influx of Korean investors into the country. Korea’s Hanjin Heavy Industries and Construction Corp. invested $13.7 million for a high-rise residential development in Fort Bonifacio,” Santos said.

“Increasingly, we see a variety of Philippine projects being sold in key overseas markets including California, the US East Coast, Dubai and Hong Kong,” Santos said, “which will also contribute meaningfully to growth in Philippine real estate.”

garzland

January 1st, 2008, 07:57 AM

I wish this boom is scattered all over the country... Mostly are concentrated in Metro Manila...

filcan

January 1st, 2008, 07:53 PM

^^you kinda got your wish garzland...

Vol. XXI, No. 108
Wednesday, January 2, 2007 | MANILA, PHILIPPINES
Corporate News
http://www.bworldonline.com/BW010208/content.php?id=041

P13B earmarked for projects

VILLAR-LED holding firm Vista Land and Lifescapes, Inc. will increase its capital spending this year by P6 billion for new projects as well as expansion of existing ones.

In a talk with reporters, President Benjamarie Therese N. Serrano said the company has allotted P13 billion for capital expenditures this year against last year’s P7 billion.

She said the allocation would be sourced from internal funds and the proceeds of Vista Land’s follow-on offering.

"Next year, we’re targeting 40 new projects to cover our takeup for 2009. Our strategy is to be able to expand in the provinces, and we’re also very bullish on our foray into the vertical [developments]," Ms. Serrano said.

Of the 40 projects slated this year, Ms. Serrano said about half would be entirely new projects, while the rest would be expansion.

Seven projects would be vertical, she added.

She did not specify how the projects would be divided among Vista Land’s four brands, namely C & P Homes, Communities Philippines, Crown Asia and Brittany Corp.

Daang Hari expansion

But Ms. Serrano said the company had identified Daang Hari, the boundary of Las Piñas and Cavite, as an area for expansion.

"Since we have significant raw land in Daang Hari, wherein all of our brands are well-represented, we’re expanding it and hopes to launch them by first quarter this year," she told reporters.

She said the price package for these projects would be between P1.5 million and P3 million.

Ms. Serrano also said Vista Land is hoping to launch seven projects in Visayas and Mindanao, four of which would be new.

The company’s projects in Davao, Cagayan de Oro and Cebu, meanwhile, would be expanded.

She said the projects have a sales value of P50 billion, almost double the P28 billion sales value of its 28 projects last year.

Vista Land has 96 ongoing projects across the country.

Its vertical projects include the 30-storey Mosaic and triple-tower Laureano Di Trevi in Makati, the 42-storey Avant at the Fort, five-tower Marfori Residences in Sucat, Muntinlupa and mid-rise Pacific Residences in Taguig City.

Last month, the company inked a joint venture with listed firm Splash Corp. for the development of the latter’s 3,600-square-meter property in Ortigas.

The mixed-use project, which would comprise two towers of 34 stories each, would be built under the Crown Asia brand. — LNPL

3cr

January 4th, 2008, 11:04 PM

Housing sector seen sustaining growth in next 3 yrs
By Doris Dumlao
Philippine Daily Inquirer
http://supplements.inquirer.net/propertyguide/main.php?content=around167

MANILA, Philippines - The Philippine housing sector is nowhere near the US subprime credit debacle, with the continued strengthening of demand seen sustaining the sector's growth in the next three years, the state-owned Home Guaranty Corp. said.

In a recent presentation to the Bangko Sentral ng Pilipinas (the Philippine central bank), HGC president Gonzalo Bongolan said that unlike in the United States, home loans in the Philippines were based on affordability and people were getting loans to buy houses for their use and not for investment purposes.

HGC is the lone government institution that guarantees against credit risks in housing. The guarantee it extends covers both the housing loans of home buyers and those of the subdivision developers. It is one of the five agencies supervised by the Housing and Urban Development Coordinating Council.

"Interest rates are subsidized for government-funded housing and rates are lower for lower-cost housing packages," he said.

"We already had our own housing subprime crisis," Bongolan said, adding that the market was able to digest lessons from the housing woes in the mid-80s and 90s.

He said home financing was still generally funded through traditional sources and there were not so much structured products outstanding.

Bongolan added there were a number of barriers to securitization or the conversion of asset like loans into marketable securities, typically for the purpose of raising cash by selling them to other investors. These include the following:

- pricing of volatility and risk factors;

- intermediation costs jacking up overall costs and making it more expensive than traditional lending;

- lack of specialist firms in related areas such as servicing, rating and other backroom requirements;

- lack of standardized documents as well as electronic and computerized infrastructure and banks' reluctance to off-load housing loans from their balance sheet;

- taxation and legal issues.

In the United States, the low interest rates resulted in excessive lending to borrowers, even to those of "low" credit standing. These subprime loans were securitized into structured financial products.

When the low-interest rate regime ended and rates started rising, the subprime borrowers found themselves with costlier mortgages against declining house prices and for some, the house values fell below the loan balance.

The eventual defaults on subprime loans and the falling house prices affected the securities issued against those mortgages and housing-related instruments. Subsequent sell-offs of the structured instruments further lowered the valuation of these securities, resulting in big financial losses to big global banks.

For the next three years, Bongolan said demand for housing in the Philippines would remain strong. He estimated that average housing need or potential demand would range between 751,000 to 805,000 units each year.

Demand was seen to be fueled by declining interest rates, remittances and purchases by overseas Filipino workers, high liquidity in the financial system and increasing popularity of contracts-to-sell as an alternative financing scheme.

A contract-to-sell is an arrangement where the property title remains with the developer. The contract is converted into a real estate mortgage only when the buyer has completed a certain percentage of payment. This arrangement makes developers more aggressive in selling housing units. It also makes it easier for them to foreclose on assets held by delinquent buyers.

Bongolan said the HGC and the National Home Mortgage Finance Corp. were likewise undertaking initiatives to develop the secondary mortgage market and the securitization of housing receivables.

garzland

January 5th, 2008, 07:57 AM

filcan

January 12th, 2008, 12:49 AM

LUCIO TAN-LED ETON PROPERTIES
Reshaping Laguna’s geography

By Charles E. Buban
Philippine Daily Inquirer
First Posted 01:35:00 01/12/2008

MANILA, Philippines—For the first time here in the Philippines, Lucio Tan-led Eton Properties Philippines Inc. will be introducing a unique concept in horizontal living, one that will let homebuyers enjoy staying in a “residential island lot,” or leisure properties in man-made islands.

Eton Properties Philippines is the real estate arm of the Lucio Tan Group.

The South Lake Village will have 18 residential islands situated around a 35-hectare, two-meter deep man-made lake.

Each island, approximately one hectare in size, will offer eight to 12 residential lots of about 1,000 square meters and will be sold at P10,000 to P12,000 per sq m.

First phase

The 150-hectare South Lake Village is the first phase of the 1,000-hectare property that Eton City is master planning in Sta. Rosa. Laguna, informed Danilo Ignacio, Eton Properties president and COO during a briefing last Wednesday.

“It’s cool, secure, private and will be ready to be turned over by June 2009,” Ignacio said.

South Lake Village will be connected to the main land through land bridges while residents can also build their own private dock.

To preserve the condition of the man-made lake, only kayaks and electric boats will be allowed on the water.

Inspired

He described the South lake Village as one-of-a-kind development in the Philippines and was inspired by themed developments around the world, including Foster City in San Francisco, Dubai’s Jumeirah, The Palm and The World.

Ignacio said that being Eton Properties’ first venture in horizontal development, Eton City is envisioned to become the “Makati City of the South.”

Eton City, located on both sides of the South Luzon Expressway (right at the entrance of the existing Eton City-Greenfield interchange, which will soon be called Eton City Interchange), will include a golf course and a central business district.

The project will integrate residential enclaves, a world-class business district, a golf course and a broad range of commercial, resort-style recreation facilities as well as schools including the University of the East, which the Tan Group also owns.

Big advantage

Although relatively a new player, Ignacio explained that Eton Properties’ big advantage is that it has access to the most extensive land bank in this country—both the land bank of the Lucio Tan Group of Companies and real and other properties owned or acquired by Philippine National Bank and Allied Bank.

“Because of this, we are able to choose locations. Once we know the best demand is, we are able to launch right away a project in those locations,” he said.

Aside from Eton Properties’ experience in developing premium and mid-income residential and commercial buildings, construction of IT- and BPO-ready office buildings, the Lucio Tan Group also boasts of a vast experience in property development in Hong Kong, Shanghai, Xiamen, Beijing and Guam.

-TC-

January 14th, 2008, 08:09 PM

http://business.inquirer.net/money/breakingnews/view/20080115-112371/Property-demand-seen-close-to-peak-of-cycle

Property demand seen close to peak of cycle
Analysts say boom may last for 2-3 years
By Doris Dumlao
Philippine Daily Inquirer
01/15/2008

The Philippine property sector may be close to hitting the peak of a post-Asian-crisis cycle, as analysts expect robust demand to extend for about two to three more years.

Analysts and bankers said low interest rates and big demand from end-users were supporting appetite for real estate -- the exact opposite of the situation 10 years ago when people were buying real estate on speculation that prices would rise further.

“I think we’re closer to the top” of the cycle, said Michael Manuel, chief investment officer of Sun Life of Canada (Philippines) Inc. “A lot of things are going on in the property market, but if you look at the supply that’s being built now, I think come 2009 and 2010, we’ll probably see some kind of peaking.”

Manuel told the Inquirer that in 2005 people were not too confident on the domestic economy expanding at a robust pace. He added the construction of buildings only started in 2006.

“If it takes three years to put up a building, then all of the supply will come in 2009 and 2010,” Manuel said. “While I feel like the property sector has a way to go -- because of the vacancies right now which are still pretty tight at below single digits -- once supply comes in 2009-2010, we may see some plateauing.”

Aurelio Montinola III, president of the Bank of the Philippine Islands (BPI), noted that real estate prices today are still 15 percent lower than the levels seen during the height of the Asian currency crisis ten years ago.

In disposing of its idle property assets, BPI has seen a significant improvement in valuation deals, Montinola said.

“Previously, we were giving discounts of 30 percent,” he said. “Today, we give discounts of five to 10 percent for the big pieces, and there are pieces that we can sell at appraised or higher-than appraised value.”

Alfonso Salcedo, president of BPI Family Bank, agreed that the real estate boom could still last for up to three years, supported by low interest rates which make it more affordable for people to finance housing requirements.

Salcedo said bulk of the housing borrowers today are people who buy real estate units for their own or their family’s use -- vastly different from the situation 10 years ago.

Manuel said that in 1997, “property purchases were more speculative than anything, so it was easy to give up on payments.”

“Now the units -- such as those bought by OFWs [overseas Filipino workers] -- are those where their families live,” he added.

As of end-September, the combined real estate exposures of Philippine commercial banks amounted to P220 billion, up 2.4 percent over a year earlier, according to the latest central bank data.

The majority, or 96.8 percent of the sector’s total real estate exposure, was held by the banks proper, while the remaining 3.2 percent was accounted for by their trust departments.

Loans extended for the construction and development of commercial properties, including infrastructure projects, comprised the bulk at 79.9 percent, or P154 billion, while the remaining 20.1 percent, or P38.6 billion, was granted for the acquisition of residential units by individual homeowners/borrowers.

Past-due real estate loans fell by 17 percent to P15 billion from the previous quarter’s P18.1 billion.

“The improvement was mainly due to banks’ rigorous collection, settlement, restructuring and foreclosure efforts,” the central bank reported.

Consequently, past-due real estate loans fell to 7.8 percent of total loans from 9.4 percent a quarter earlier and 13.9 percent a year earlier.

portludlow

January 27th, 2008, 06:07 AM

Good News for everybody. Banks can now lend more to private individuals. :)

BSP eases rules on real estate loans of banks

http://www.abs-cbnnews.com/storypage.aspx?StoryID=106989
By DES FERRIOLS
The Philippine Star

The Bangko Sentral ng Pilipinas (BSP) has eased the restrictions on banks’ exposure in the property sector and excluded private housing and public infrastructure construction loans from the 20-percent ceiling on real estate loans.

The policy-setting Monetary Board of the BSP has approved the new regulations that will rationalize the limits on real estate loans, which were first instituted in reaction to the 1997 Asian financial crisis.

The BSP said it is imposing a single 20-percent overall limit on the real estate lending of universal and commercial banks primarily as a prudential safequard against over-concentration of credit to commercial lending.

Under the new rules, the BSP said loans for the construction of public infrastructure are now excluded from the definition of real estate loans and consequently from the 20-percent limit.

The BSP first decided to limit the banking sector’s exposure in real estate following the collapse of the property sector in 1997 that left banks holding large amounts of non-performing assets that the industry is still trying to unload to date.

However, the BSP decided to remove loans related to public infrastructure since projects such as roads, bridges and railways had a different risk configuration relative to commercial property development.

The BSP said that unlike public infrastructure, commercial property development projects are more susceptible to speculative motivations and bank exposure should continue to be limited.

The BSP also decided to exclude housing loans for individual households regardless of the amount, as well as loans extended to real estate developers for the construction of socialized and low-cost residential properties under various government housing programs.

The BSP said it excluded housing projects from its restrictions to prop up the government’s National Shelter Program which was supposed to address the country’s chronic housing shortage.

However, the BSP warned that such loans would remain under the BSP’s tight regulations on strict underwriting standards and the prescribed limits on loan amount that banks are allowed to grant relative to the value of collateral.

But the BSP said real estate loans to the extent guaranteed by the Home Guaranty Corp. or collateralized by non-risk assets would continue to be excluded from the 20-percent limit.

Furthermore, the BSP said the new rules also exempted trust department of banks from complying with the prescribed REL limits, saying that apart from observing the prudent man’s rule, the trustee banks do not really assume credit risk.

"The assets received in trust or in any other fiduciary capacity are administered in accordance with the terms and conditions of the trust or fiduciary agreement," the BSP explained.

Thrift banks and rural/cooperative banks whose traditional market niches are residential RELs and mortgage financing as well as agricultural and cooperative loans, are not subject to the 20-percent limit.

-TC-

February 13th, 2008, 03:44 AM

http://globalnation.inquirer.net/news/breakingnews/view/20080210-118004/Despite-strong-peso-OFWs-still-buying-houses

Despite strong peso, OFWs still buying houses
By Doris Dumlao
Philippine Daily Inquirer
02/10/2008

THE PESO'S sharp appreciation against the dollar has neither dampened overseas Filipinos' interest in buying real estate nor resulted in delinquency in their housing loans so far, BPI Family Bank said.

Alfonso Salcedo, president of BPI Family Bank--the thrift bank subsidiary of the Ayalas' Bank of the Philippine Islands--said housing loans from overseas Filipinos were still growing and these borrowers had been up to date in their loan payment.

The BPI group is currently the country's biggest channel for foreign exchange remittances.

Salcedo said the bank checked late last year whether there were requests for loan repackaging from this sector and found out there was none.

"But of course we're very cautious, we're looking at how that sector is doing," he said.

The peso gained 18.8 percent against the dollar last year to become Asia's best performing currency. But the steep appreciation has also diluted the peso equivalent of the money sent home by overseas Filipinos, raising concerns over a possible decline in consumer spending and an increase in loan delinquency among borrowers from this sector.

Salcedo said the strong peso had not affected housing loan take-up apparently because of these borrowers' determination to own their own homes.

"And I really laud our developers because they have come up with projects designed for OFWs, " he said.

He estimated that OFWs accounted for about a third of BPI Family's new housing loans. Loan size, he said, ranged from P1.2 million to P1.7 million, used mainly to fund the acquisition of housing units worth about P2 million.

These borrowers' commitment to pay their housing loans, he said, was firm because they live in the houses they bought and they knew they could lose them if they failed to pay their loans.

He also noted the growing segment of well-heeled Filipino migrants who were buying local condominium units for their own use when they visit the country.

The BPI group is projecting a double-digit growth in local lending in the next three years. For this year, the group expects its loan portfolio to expand by 12 percent, up from 11 percent last year.

For 2007, BPI reported a 17-percent expansion in consumer loans and remained the biggest player in consumer lending. Market shares for housing and auto loans were maintained at 24 percent and 22 percent, respectively.

Recently, the Bangko Sentral ng Pilipinas--the Philippine central bank--liberalized real estate lending regulations for the first time since the 1997 Asian crisis to pump in more money into two of the government's priority sectors--infrastructure and housing.

The BSP agreed to adopt a single industry limit of 20 percent for real estate loans as a share of total loans.

The cap was slapped on banks' exposure in the property sector before the Asian currency crisis erupted. But a leeway to raise the exposure up to 30 percent was incorporated to accommodate borrowings of up to P3.5 million for the purchase or improvement of residential units.

-TC-

March 2nd, 2008, 06:47 PM

http://business.inquirer.net/money/topstories/view/20080229-121848/Housing-office-space-markets-seen-remaining-firm

Housing, office space markets seen remaining firm
By Daxim Lucas
Philippine Daily Inquirer
02/29/2008

MANILA, Philippines -- Dollars sent home by overseas Filipinos will continue to power the real estate sector in the foreseeable future, keeping property prices firm and helping it avoid a downturn amid global economic uncertainties, according to a study by a property consulting firm.

The study by CB Richard Ellis Inc. said purchases of real estate were still driven by end-users rather than speculators, which lends more strength to the market.

"The primary movers for both horizontal and vertical residential developments are still the inflow of dollars from overseas Filipinos and workers, the empowered and expanding middle class, low lending rates and flexible payment terms from property developers and banks,” it said.

The company’s assessment was contained in its study about market conditions in the fourth quarter of 2007, which was released this week.
“Owning a home is one of the ultimate goals of every Filipino and the opportunities present make that goal within reach,” the study said.

The strength of the property sector was also evident in the market for office space, it added.

It said the upscale office leasing market remained robust even as overall vacancy across all districts increased to 1.11 percent in the fourth quarter of 2007 from 1.00 percent in the third quarter.

“The low vacancy indicates demand still outpacing supply,” the study said.

“This is expected to continue as more BPO [business process outsourcing] companies are eyeing to set up operations during the year.”

There was also a new supply of office space turned over during the period, it said.

The new supply came by way of the turnover of newly completed buildings and an expansion of a “Grade A” building in the Makati business district, it said.

Makati prime office rent remained stable at P1,200 a square meter a month even as vacancy decreased to 1.00 percent from 1.23 percent the previous quarter, the study said.

“This is indicative of the market temporarily stagnating in anticipation of major tenant movements in the coming months,” it said. “Landlords are being prudent as further increases in their rates might send negative signals to major tenants whose lease agreements are up for renewal.”

The study said the Grade A office market showed a different behavior, as some office buildings reduced their rent by six to eight percent over the previous quarter, bringing the average rate to P862 a square meter a month from P891.

“This indicates that landlords have started to ease on the lease rates given that a number of large tenants in these buildings are contact centers,” it said.

Vacancy in this segment fell to 1.16 percent from 1.38 percent in the previous quarter, it added.

The additional 5,000 square meters from the expansion of the GT Tower had little effect to curb the decrease in vacancy, it said.

icarusrising

March 6th, 2008, 10:29 AM

Megaworld expects strong 2008 growth

By Rocel Felix
Thomson Financial

Posted date: March 06, 2008

MANILA, Philippines -- Megaworld Corp., the Philippines' second-biggest property company, expects another bullish year in 2008, driven by strong demand for mid-priced housing units and business process outsourcing projects although a prolonged slowdown in the global economy may hurt sales to millions of Filipinos working abroad.

"We expect to hit an all-time high net profit of P2.9 billion for 2007. We are quite confident we will be meeting our guidance numbers," Kingson Sian, executive director of Megaworld told Thomson Financial.

"At the same time, we expect to continue the growth momentum of our business and increase our profitability this year."

Megaworld is 42.2 percent owned by listed conglomerate Alliance Global Group, of which Sian is president.

A purely domestic player, Megaworld has yet to release its 2007 results. It previously reported a 52 percent increase in net profit for the first nine months to P2.29 billion, reflecting gains in residential projects, which account for 80 percent of total revenue, and rentals from offices leased to business process outsourcing (BPO) companies.

Megaworld is poised for higher growth this year, according to Sian, even as some analysts say that the outlook for the local property sector may be undermined by a sluggish global economy.

The Philippine property sector, which has seen an unprecedented boom in the last three years, is being fuelled largely by hefty dollar remittances from overseas-based Filipinos.

More than eight million Filipinos, or a tenth of the population, are working overseas, half of them in the United States. Their remittances, which fuel domestic spending, average $1 billion a month.

But with the US economy headed for, if not already in, recession, many Filipinos working there are worried about keeping their jobs.

Fears that a potential slowdown in the global economy may hurt Megaworld's sales to overseas-based Filipinos saw the stock skid nearly 38 percent since the start of the year. The local property stock index was down 22.3 percent.

‘NO MAJOR CANCELLATIONS’

But Sian downplayed the possibility of a decline in demand.

He said Megaworld, which is focused on the residential middle-market, remains unaffected by the slowing US economy as sales to US-based Filipinos make up only about 5.0 percent of the company's overseas sales. Sales to Filipinos working in the Middle East, Europe and Asia are higher than those based in the US, said Sian.

"We have had no major cancellations, and the strong domestic reservation sales we have I believe, attest to the resiliency of the middle-income housing segment, which is the fastest growth market in the residential sector."

Sian said Megaworld is allotting P12 billion for capital expenditure this year, about the same as last year's.

"While our projects are predominantly in Metro Manila, we are looking outside of Manila and tapping opportunities in other high-growth areas," he said.

Megaworld expects to begin this year the initial redevelopment of a 54.5-hectare airport in Iloilo province in central Philippines and is spending P1.5 billion to construct a hotel, convention facilities and BPO offices.

It also acquired last year a major property in Mactan Island in Cebu, a major tourism destination, also in the central Visayas region.

"We are prepared to launch as many projects as the market can absorb," said Sian.

CLSA Securities, which has a 'buy' rating and 12-month target price of P3.90 for Megaworld, said the company's reservation sales continue to be robust.

"In the first three weeks of February, the company's reservation sales have already hit management's monthly target of P2 billion based on an end-2008 sales target of P24 billion, or a 26 percent year-on-year increase," CLSA said in a recent research note.

"We continue to see a lot of prospective customers and see no slowdown in construction," the brokerage said.

CLSA considers Megaworld's valuations quite low given its earnings potential.

"Even with fundamentals intact, we see a serious disconnect with Megaworld's share price down substantially over the past month. The current weakness is unjustified in our view."

CLSA said investors may be concerned that Megaworld is relying too much on the middle-market segment of the residential condominium market.

Megaworld expects to tap this segment further as local demand remains robust, and plans to increase sales to Filipinos based in Europe, the Middle East and Asia.

"Our business model is what has sustained our growth so far. There is still a big market for those buying homes for the first first time," said Sian.

Megaworld shares closed two centavos lower at P2.46 on Thursday.

($1 = P40.66)

Source: http://business.inquirer.net/money/breakingnews/view/20080306-123162/Megaworld-expects-strong-2008-growth

icarusrising

March 7th, 2008, 11:25 AM

SM Development 2007 profit up 24.2% on condo sales

Thomson Financial

Posted date: March 07, 2008

MANILA, Philippines -- Home builder SM Development Corp. reported a 24.2 percent rise in net profit in 2007 to P1.2 billion on strong sales.

Revenue jumped 91 percent to P2.7 billion, with condominium sales registering a threefold increase to P1.9 billion, the company said.

But the increase in net profit was tempered by the absence of gains from marketable securities owing to turbulence in equities markets triggered by the subprime mortgage crisis in the US, it said.

SM Development, which is controlled by Filipino tycoon Henry Sy's conglomerate SM Investments Corp., still holds marketable securities in its portfolio as it started doing business as an asset management company before becoming a residential condominium developer.

In 2006, it booked gains of P225 million from marketable securities. (By Enrico dela Cruz)

Source: http://business.inquirer.net/money/breakingnews/view/20080307-123392/SM-Development-2007-profit-up-242-on-condo-sales

lightsaber46

March 11th, 2008, 10:45 AM

I have a question to all real estate pros here, Does the cost of a building increases as the floor/storey gets higher?? To site an example the cost of a 3-4storey is different to a 5-20 storey and the latter also different for a 21-30storey on a single structure.

So as the storey increases the cost of construction also increases, is there a truth to this? Does cost to "build" really increase as the project progress vertically?

icarusrising

March 11th, 2008, 07:28 PM

Vista Land to list 2.5B shares
By Honey Madrilejos-Reyes
Reporter

VISTA Land & Lifescapes Inc., the newly incorporated property holding firm of the MB Villar Group, would list its shares by way of introduction at the Philippine Stock Exchange (PSE) on June 25.

Listing by way of introduction only involves the listing and trading of a company’s shares at the bourse but not necessarily selling these stocks to the public.

Vista Land said it plans to eventually offer its shares to both domestic and foreign markets but is still in the process of completing the details on the share offering.

Based on the company’s filing with the Securities and Exchange Commission (SEC), a maximum of 2.5 billion shares to be sold at a maximum price of P10 per share is being contemplated by Vista Land.

“Proceeds [from] the public offering would be used by the company to rapidly expand its operations and strengthen its market position,” it said in a statement issued Tuesday.

It has appointed Switzerland-based UBS Investment Bank as sole global coordinator and bookrunner with ABN Amro Rothschild as colead manager for the planned offering.

Vista Land combines the strengths of Brittany Corp., C&P Homes, Crown Asia and Communities Philippines, making it one of the largest homebuilders in the country offering various horizontal residential products across all income segments.

Brittany is a major provider of luxury high-end homes in master-planned communities. It units are priced at P9 million or above.

The company recently ventured into the high-rise residential condominium segment with Viera in Muntinlupa, Rizal, Mosaic in the Makati central business district and the newly launched Avant in Fort Bonifacio. As of end March 2007, Brittany had 12 projects (including one leisure project) with an aggregate area of 258 hectares under development.

On the other hand, Crown Asia pioneered the development of large scale themed projects catering to the middle market and primarily offers middle class homes in Mega Manila priced between P3.5 million and P9 million. Since its establishment in 1995, Crown Asia has launched and developed more than 20 projects, of which 14 projects with an aggregate of 247 hectares were under development as of March 31, 2007.

Meanwhile, C&P Homes carries the flagship brand Camella, servicing the low-cost (including socialized) housing segment (priced below P1.3 million) and the affordable housing segment (P1.3 million to P3.5 million) in the Mega Manila area for over 30 years now.

Last year, Camella ventured into the condominium market with the Pacific Residences launch in Taguig. As of March 31, 2007, C&P Homes had 19 projects with 216.0 hectares under development.

For its part, Communities Philippines has the widest geographical reach among Philippine property developers, offering residential properties under the “Camella” and “Crown Asia” brands in the regions outside Mega Manila. As of March 31, 2007, Communities Philippines had 22 projects covering 323 hectares under development in 13 cities and municipalities, including Pangasinan, Pampanga, Bulacan, Batangas, Iloilo , Cebu, Leyte, Cagayan de Oro and Davao.

Vista Land said it has an extensive land bank available for future development—1,434 hectares of raw land, of which approximately 1,185 hectares were acquired directly and about 249 hectares under joint venture agreements with land owners.

Source: http://www.businessmirror.com.ph/06132007/companies01.html

-TC-

March 11th, 2008, 08:14 PM

http://showbizandstyle.inquirer.net/lifestyle/lifestyle/view/20080301-122063/How-to-buy-real-estate-almost-worry-free

How to buy real estate (almost) worry-free
By William L. Jasarino
Philippine Daily Inquirer
03/01/2008

(First of two parts)

MANILA, Philippines—Nowadays, it’s a challenge to buy a condominium unit or subdivision lot (with or without house), anywhere in the Philippines.

There is an increasing risk when making that purchase as one faces the prospect of poor construction materials or workmanship, delayed, inadequate or absent house or project development, mortgaged or absent title and other problems. And the worst situation that a prospective homeowner may find himself in is to be duped into parting with his hard-earned money and get nothing in exchange.

The dangers especially for a first-time buyer of real estate are not for want of laws, rules and regulations. Typically, there’s enough of the legal stuff.

The problem is people do not know much about them.

This article is meant to arm ordinary buyers with sufficient information and knowledge that will prevent or, at least, minimize headaches and heartaches when making a purchase. By ordinary buyers, we mean people who are buying a unit or house to live in and who may not have ready access to professional legal assistance.

Here are some tips:

• Look for permits and licenses.

If buying within a townhouse, subdivision or condominium, the seller must be able to show that the project has been previously issued a subdivision approval or development permit, a certificate of registration and a license to sell. For sure, the existence of all these three permits is not an assurance that there will be no problem. However, they will ensure that government will be involved in correcting any situation. However, if any of such permit is absent, disaster is likely.

If it is a subdivision project or a townhouse that is being developed with individual land titles, the subdivision approval will come from the local government unit (LGU) having jurisdiction over the property. Usually, the office of the mayor and the sanggunian are part of the process that eventually leads to a subdivision approval that is sometimes called development permit by some LGUs.

If it is a condominium or a townhouse with title to the unit only, the development permit emanates from the Housing and Land Use Regulatory Board (HLURB).

Regardless of type of project, a project must have a certificate of registration and a license to sell, both coming from the HLURB only.

• Check the title.

The title is one of the best indications of the existence of a defined piece of real estate that may be subject of a sale transaction. It contains a technical description that tells you the precise boundaries of the subject lot as well as its area, which is normally in square meters. It also identifies the name of its registered owner. And the last but not the least of the important information found in a title is the absence or presence of any annotation or record of any other interest in the property.

A buyer must insist on getting a copy of the title which he should present to the proper Register of Deeds to see if a copy of said title is on file with that Office. To know which Register of Deeds to go to, check the upper portion of the first page of the title.

If the buyer has the time and extra money, he may have the technical description plotted by means of a computer program that will visually show if the project’s boundaries are complete and if the indicated area is accurate.

While admittedly not a full-proof guarantee of its genuineness, a confirmation by the Register of Deeds that there is such a title in its custody should reasonably raise the buyer’s confidence.

• Visit the property.

There is nothing like the buyer seeing the property for a first-hand appreciation. It is helpful to bring along the people who will eventually live in or have a real stake in the property of interest.

The various observations will certainly enrich the appreciation by the buyer. Certain points that he would otherwise miss are brought to fore (i.e. steps are high for the small children, the room is too small, space is too cramp, lot is too far from neighbors, etc.)

Of course, a few buyers get discouraged from proceeding with a purchase after hearing negative comments from family members who are difficult to satisfy to start with.
-----------------------------------------------------------------------

http://showbizandstyle.inquirer.net/lifestyle/lifestyle/view/20080307-123428/How-to-buy-real-estate-almost-worry-free

How to buy real estate (almost) worry-free
By William L. Jasarino
Philippine Daily Inquirer
03/07/2008

Conclusion

MANILA, Philippines—Last week, this writer enumerated tips for people who are buying a unit or house to live in and who may not have ready access to professional legal assistance. This is intended to arm ordinary buyers with sufficient knowledge that will prevent, if not lessen, headaches or heartaches when making a purchase.

Here are other tips:

• Get a copy of documents to be signed and study them.

The basic documents include a reservation agreement (although this is not always required), contract to sell and deed of absolute sale. For a condominium, a master deed with declaration of restrictions is indispensable. These documents generally provide the terms and conditions of the sale. The obligations of the buyer are expectedly favorable to the seller.

The interested buyer must take pains to read the documents and identify the provisions that are not clear to him, which will likely be many. He must pay special attention to provisions regarding payments that will be required of him, from reservation, downpayment, amortization, interest and charges for delayed payments to miscellaneous expenses. The important questions here are the exact amounts, in pesos and centavos, and due dates.

The other provisions that the buyer must know about pertain to the completion of the house or unit, if any, and of the entire project. A key document for this purpose is the contract to sell. When the house or unit will be finished, as in livable and delivered to the buyer, should be clear.

Related to this concern is the details of what to expect in the house or unit, viz., size or area, features (with partitions, etc.), kind of flooring, ceiling and wall finishing, kind of electrical fixtures, color, etc. These are not usually spelled out in ads or brochures. Neither are they referred to in any of the documents that the buyer is asked to sign. The prospective buyer must ask the seller to specify these items in writing to prevent a disappointing surprise. The model house or unit can give the parties a basis for doing an itemization.

Project completion is seldom mentioned in any document that the buyer is asked to sign or even in the seller’s advertisement. Nevertheless, this is important because no buyer would want to live in a subdivision or condominium that is incomplete. The not-so-obvious significance of this timetable is the buyer may lawfully suspend amortization payments, upon compliance with certain procedures, if the developer fails to complete the project within the required period for doing so.

This required period for project completion is found in the license to sell issued by HLURB.

A person interested to buy must insist on an explanation by the developer of the documents he will be required to sign before he signs them. He must bear in mind that he will be bound by these documents for his entire life.

• Know the persons you are dealing with.

A buyer will invariably deal with a seller’s employee, whether a lowly clerk, a mid-level manager or a top vice president, a broker or salesman or some other representative.

As an objective criterion, a buyer must deal only with someone who can present a credential or what appears to be a credential, i.e. identification card, letter of authority, HLURB certification or license from the Bureau of Trade Regulation and Consumer Protection of the Department of Trade and Industry.

There may still be some bad apples, so to speak, among these credentialed guys but you have a better chance in going after them and getting some remedy if you will be so unlucky to fall into their hands.

And, always record the names and persons you talk to, their contact numbers and the date and approximate time of the interaction. One may never know when these information will become necessary or even indispensable.

Many times there will be guys who are part-timers in selling. These are one-time agent who are in this only for the commission. They include well-meaning friends and relatives who stumbled upon what they see as good properties. If you have to deal with this bunch, look for the guy behind them with the credential. If you cannot locate this fellow, forget it.

Why? If some unexpected problem is encountered, these guys will likely become difficult to find as their stake in the transaction is almost incidental.

• Know the seller.

The permits will tell you who the seller is. That’s good. But just as important is the reputation of the person or entity appearing as seller. And I’m not referring to the number of employees, the size of the organization, the network of the brokers and agents or the size of the projects. These may matter for other purposes but not always for worry-free buying.

A good source for determining reputation is HLURB, which maintains records of developers and the existence of complaint in their respective specific projects.

To inquire, one needs only to present the name of the owner-developer as well as the name and location of the project.

The number and nature of complaints given the size of the project will give a buyer a more informed judgment as to the reputation of the developer and, in the final analysis, an idea of whether or not there is a big chance that there will be repeats of the complaints in the project that he is buying into.

For sure, none of the foregoing tips should be relied on alone. All or most of them will have to be considered and followed in making a purchase that will be without or with few problems.

(The author is a practicing lawyer and the special assistant to the national president of the Chamber of Real Estate and Builders’ Associations Inc. He was a co-managing partner at Fondevilla Jasarino Young Rondario & Librojo Law Offices.)

Weina

March 12th, 2008, 03:36 PM

Ayala Land offers long-term
fixed-rate home financing

INDUSTRY leader Ayala Land Inc. (ALI) has come up with an in-house financing scheme enabling prospective homeowners to take advantage of the low-interest rate environment.

Rex Mendoza, ALI senior vice-president for corporate sales, said the company is set to launch a home-starter financing that is the lowest in the industry.

He said the scheme only requires a down payment of 10 percent of the property cost, with the buyers amortizing the remaining balance for 20 to 25 years at a fixed interest rate of 11 percent.

“It’s 11 percent because banks offer 11.25 percent to 11.5 percent. So what happens now is [you have] a property that is good with low rates which makes it affordable for a lot of people,” Mendoza said.

“The competition here now is not just only on the property [itself] but also on the financing side,” he added.

Mendoza said the home-starter financing product will be offered initially to clients of its unit, Community Innovations Inc. “as this is [their] initiative.” He said the scheme may be extended to other ALI subsidiaries such as Avida Land Corp. and Ayala Land Premier.

ALI’s in-house financing scheme comes on the heels of similar long-term fixed-rate offers made by property developer Megaworld Corp. in a tie-up with Security Banking Corp.

Thrift lenders such as Philippine Savings Bank also have begun offering fixed-rate housing loans for up to 10 years.

http://www.manilatimes.net/national/2007/mar/14/yehey/business/20070314bus3.html

Weina

March 20th, 2008, 07:53 AM

Singapore fund buys Ayala Land shares
03/20/2008 | 12:37 PM

MANILA, Philippines - Singapore-based fund Aberdeen Asset Management Asia Limited has bought about P667-million worth of shares in developer Ayala Land Inc. since the start of the year.

In a report to regulators, Aberdeen also revealed that in February its total shares in the company were about 1.36 billion or 10.4586 percent, more than 1 percent from 10.305 percent it had at the start of that month.

The fund manager added that it bought Ayala Land shares between a range of P11.22 and P14.98.

Aberdeen, which has been investing in Asia for 20 years, manages about $51.8 billion as of end December 2007, making it one of the largest managers of regional equities globally.

Ayala Land has earlier announced that it will be spending an “unprecedented" P24.3-billion capital expenditures this year. The company said it will fund its capex through a combination of debt and internally generated cash from pre-selling and collection from its leasing business.

In 2007, Ayala Land spent P15.2 billion in capital expenditures.

Of the total budget in 2008, 42 percent will go to residential projects; 30 percent to the corporate business division and shopping centers, 14 percent.

Strategic land bank will get 10 percent.

Some of these projects will be launched in new locations such as Pasig, Marikina and the northern part of Quezon City. - Cheryl Arcibal, GMANews

Weina

March 25th, 2008, 03:48 PM

Upbeat outlook for property developers; Megaworld leads

By Enrico dela Cruz
Thomson Financial
First Posted 12:13:00 03/25/2008

MANILA, Philippines -- Shares in major Philippine property developers were firmer on Tuesday, rebounding from recent losses on expectations that home sales will remain strong due to low domestic interest rates.

"We're seeing renewed interest in property stocks, which are really oversold but still fundamentally sound," said Gomer Tan, vice president for marketing at Regina Capital Development Corp.

"We've been worried about the US subprime mortgage mess but we believe that the local property sector is still enjoying good sales, partly because of low interest rates," he said.

Outperforming its peers, Megaworld Corp. -- the country's second-biggest home builder in terms of market value -- rose 14 centavos or 6.2 percent to P2.40. Megaworld shares are down 36 percent so far this year, compared to a nearly 20 percent decline for the Philippine composite index.

Ayala Land Inc., the country's biggest developer, was up 25 centavos or 2.3 percent at P11.00. The stock has fallen about 23 percent year to date.

Filinvest Land Inc advanced 5 centavos or 5.1 percent to P1.04.

Domestic interest rates may have bottomed out as higher food and fuel prices pushed inflation higher in the first two months of the year. But there are no signs yet that the Philippine central bank will increase key interest rates anytime soon.

The central bank cut its rates four times between October 2007 and last January.

The government's improved fiscal performance also cancels out any upward pressure on interest rates.

Last week, the Department of Finance reported that the government had a budget deficit of P13.9 billion in January, less than half the deficit it incurred a year earlier because of lower interest payments.

Insisting that its cash position remains strong, the government rejected all bids for benchmark Treasury bills for the third straight auction on March 17, given lean volumes and as banks pushed for higher rates.

On Monday, the government announced its decision to stop offering 91-day and 182-day T-bills at fortnightly auctions in the second quarter, although it would double its offer of one-year bills from the current size of P3 billion per auction.

Banks use the average 91-day T-bill rate as a benchmark in pricing loans. At the last successful auction, the three-month rate averaged 3.673 percent.

($1 = P41.60)

-TC-

March 26th, 2008, 03:50 AM

http://www.businessmirror.com.ph/03262008/companies01.html

Property stocks post longest rally on speculation sales, rent will rise
BusinessWorld
March 26, 2008

FILINVEST Land Inc. and Megaworld Corp. paced a four-day climb among Philippine property stocks, the longest rally in more than two months, on speculation bank lending will boost home sales and office rents will rise.

The Philippine Stock Exchange Property index of 22 stocks advanced 2.5 percent Tuesday, capping a 9.3-percent advance since March 17. The measure has rebounded from an 18-month low after dropping on fears a recession in the US, the biggest overseas market for Philippine goods and labor, would squeeze consumer spending in the Southeast Asian economy.

“The property sector isn’t very dependent on the US, contrary to what many investors fear,’’ said Alex Pomento, strategist at the Philippine unit of Macquarie Group Ltd. “The sector has it own legs domestically that it could stand on its own even with a US recession.’’

Funds sent home by Filipinos working abroad, which the central bank expects to reach a record $15.84 billion this year, are spent on durables such as homes, helping spark a building spree in the past three years. About half of the remittances come from the US, home to the biggest Filipino population overseas.

A push by banks to increase lending and “generally low interest rates’’ will help soften the impact of a US slump on domestic demand for homes, Pomento said. A shortage of office space will support rents amid demand from call centers and other providers of outsourced business services, he said.

Filinvest Land, the nation’s fifth-largest homebuilder by market value, rose 7.1 percent to P1.06 at the noon close of trading. Megaworld, the biggest provider of call-center space and the No. 2 homebuilder by value, jumped 5.3 percent to P2.38.

The US accounts for no more than 5 percent of Filinvest Land’s total home sales to overseas Filipinos and less than 10 percent for Megaworld.

Ayala Land Inc., the largest Philippine builder, climbed 2.3 percent to P11.

“Ayala Land and SM Prime are good defensive plays,’’ Pomento said.

SM Prime Holdings Inc., the nation’s biggest shopping mall operator, was unchanged at P8.30, after rising 5.1 percent over the previous two days. (Bloomberg)

lightsaber46

March 27th, 2008, 09:37 AM

Landco sets P3.5B capex
http://www.businessmirror.com.ph/03272008/companies04.html

By Honey Madrilejos-Reyes
Reporter

LANDCO Pacific Corp. (Landco) is allotting P3.5 billion as capital expenditure this year to finance ongoing and new projects.

In a press briefing Wednesday, executive vice president and chief operating officer Francis Ceballos said the capex will be funded by internal cash and sales from preselling activities.

Among the projects that will keep the company busy this year include the existing ventures Playa Calatagan in Batangas, the Hacienda Escudero in Quezon, Amara en Terrazas and the TRIbeca residential project in Parañaque. New projects include Playa Laiya in San Juan, Batangas; the Playa Azalea on Samal Island, Davao; WoodGrove Park residential community in San Fernando, Pampanga; and the Playa Calatagan Resort and Hotel.

Ceballos said half of the capex will go to its leisure-community development, while the other half will be distributed to its hometown-community projects and the TRIbeca venture.

Landco, a unit of listed Metro Pacific Investment Corp., posted a net income of P261.2 million in 2007 from a loss of P12.9 million a year earlier.

The turnaround was on the back of the 191-percent jump in its revenues to P2.08 billion from last year’s P712.4 million.

With the launch and marketing of new projects in the year just concluded, Landco’s operating expenses rose to P884.2 million from 2006’s P695.8 million, an increase of 27.1 percent.

-TC-

March 27th, 2008, 08:31 PM

http://www.philstar.com/index.php?Business&p=49&type=2&sec=27&aid=2008032733

Be wary as more scams come
BIZLINKS By Rey Gamboa
Friday, March 28, 2008

For millions of Filipinos working abroad, one of their most coveted aspirations is to save enough money to buy house and lot, no matter if it is located miles away from the center of Metro Manila.

With the slowing US economy affecting the value of the dollar versus most regional currencies, however, our overseas Filipinos have been finding it more difficult to save up for this dream.

The strengthening of the local currency has meant that the dollar is worth fewer pesos. With prices of basic commodities on the upswing, the peso also buys a smaller quantity of goods. Saving money for that house and lot has therefore become more difficult.

Compounding the situation is the growing number of scams in the real estate pre-selling business. And they come in all shapes and sizes.

With the real estate business booming, the industry is ever keen on cashing in on many Filipino families’ improved financial status arising from those overseas jobs. So are those shameless con artists posing as real estate agents.

Oftentimes, these unscrupulous individuals are able to dupe their victims into believing they are legitimate representatives of accredited real estate firms. Their modus operandi may take on a myriad of styles, but in the end, the hapless buyer ends up without his money and with no land title.

Fly-by-night firms

There is also the fly-by-night real estate company that will sell dreams of a future model housing community complete with cement-paved roads, electricity and water supply, concrete sidewalks, a park and even a community clubhouse.

After the last amortization is paid, the duped investor realizes that – and usually with his likewise gullible “neighbors” – the piece of property acquired is almost inaccessible and offers no basic utilities for decent habitable living.

Not surprisingly, getting back the money paid for broken promises will be almost impossible. Securing legal sanctions for such misdeeds, especially on those real estate firms that have pleaded insolvency, could be more difficult and costly.

Government, and even established and legitimate real estate brokers, will always say that the best way to avoid falling for such expensive pitfalls is to stick to the big boys – real estate firms that have track record, and are backed by a reputable board.

Greedy big boys

And yet, this route is not 100-percent foolproof, as a few of those who have been burned can attest to. The complaining new owner of an expensive farm lot or condominium unit will need to be ready to do battle against a battery of corporate lawyers, many of them experts at exploiting the loopholes and weaknesses in the judicial system on land and property court cases.

An individual who has been wronged may win the decision, but the years of waiting plus the aggravation of building the case and taking it through the many judiciary levels can dull any sweetness from victory.

Unlike investment scams (which I have written about in past columns as a function of greed on the part of the investor), victims in real estate stings or rip-offs did not aspire to earn scandalous returns, i.e., five percent a month on their money.

If there is anyone to blame for his sad experience, it is the existing system – administrative and legal – that does not adequately protect him from thieving individuals or companies and worse, does not provide for quick resolution of conflicts and misdeeds.

As more of our overseas Filipinos improve their income levels, the market for real estate will continue to be brisk. And more scoundrels will be around to feast on the hapless – unless more stringent measures are adopted by government.

The big question now is when these measures will be put in place.

...

Reader’s lament

One of our readers, Mr. Ely L. Alba, wrote in lament on the unfortunate situation he and about seven hundred families are in. Part of his letter follows, “I am writing to know if you could help me in inquiring my investments with ASB Group of Companies…. For more than seven years now, I don’t hear anything from said corporation.”

Included in the letter of Alba were copies of checks stamped with “Payment Stopped.” And he alleges that these were supposed to be payments for investments he and his group made with said company.

My immediate advice to him, and this holds true for many others who feel they were short-changed or are suspecting some kind of “scam,” is to sit down with a trusted lawyer and take legal action as quickly as possible. If one dilly dallies, the perpetrators may be able to get off the hook as our judicial system grinds its slow wheels.

3cr

April 1st, 2008, 11:43 AM

Empire East launches 3 mass transit-oriented metro housing projects
By Zinnia B. Dela Peña
PhilStar

Empire East Land & Holdings Inc., a subsidiary of Megaworld Corp., is simultaneously building its first three mass transit-oriented projects which are seen to further bolster its leading position in middle-income residential development.

These new projects are San Lorenzo Place in Makati City, Pioneer Woodlands in Mandaluyong City and Little Baguio Terraces in San Juan City.

“We are the first developer to launch simultaneously three new projects that are not only strategically located but more importantly, connected to mass transit systems. San Lorenzo Place has a direct connection to the Magallanes MRT station, while Pioneer Woodlands features a concourse level that connects residents directly to the Boni MRT station. Little Baguio Terraces is easily accessible to both the Gilmore and Ruiz stops of the LRT-2. This way, our future residents will be connected to all spokes of the metro: the workplace, shopping malls, schools, churches and hospitals,” said Empire East president Anthony Charlemagne Yu.

He said the construction of Pioneer Woodlands and Little Baguio Terraces will begin late this year while San Lorenzo Place will break ground next year. All three projects will be funded using internally-generated cash, as he cited the firm’s strong financial position.

“These three new projects will further bolster our standing as the country’s top mid-income developer,” Yu pointed out, adding that “the unit sizes, prices, terms of payment and location are especially geared towards starting families and overseas-based Filipinos.”

San Lorenzo Place will have four towers with one to three-bedroom units with the six-level play deck featuring various amenities such as swimming and kiddie pools, spa, tennis court and clubhouse, children’s playground and a jogging path. Considering the project’s prime location, it is being marketed under the Empire East Elite brand.

Pioneer Woodlands, on the other hand, will comprise nine residential towers offering studio to two-bedroom units. Aside from the concourse station, other amenities include restaurants and shops at the ground level of Tower 1, a lap pool and playground between Towers 3 and 4, and a landscaped private access road for vehicles along Pioneer Street.

Little Baguio Terraces, meanwhile, will provide two to three-bedroom units and amenities such as a lap pool, an aromatic garden, a fitness station and a Zen garden.

Among the completed projects of Empire East are California Garden Square, Governor’s Place and San Francisco Gardens in Mandaluyong City; Laguna Bel-Air in Sta. Rosa, Laguna; The Xavier Hills in San Juan City; Cambridge Village in Pasig City and Kingswood in Makati City.

3cr

April 1st, 2008, 11:43 AM

Megaworld acquires three Ayala Land units for P902M
Thomson Financial / Business Inquirer

MANILA, Philippines -- Homebuilder Megaworld Corp. has acquired three wholly owned units of Ayala Land Inc., the country's biggest developer, for P902 million ($21.6 million), the two companies said on Tuesday.

Ayala Land said proceeds from the sale of the assets which it considers non-strategic will be used to fund its capital expenditure for 2008. The company previously said its capex this year might reach P24.3 billion, up 60 percent from last year, as it plans to build more residential units and office buildings.

Megaworld, the country's second-biggest developer by market value, said it is planning a mixed-used development for a property that the acquired units own in the Makati financial district.

The property is currently being used for the operation of a public parking facility, Ayala Land told Manila's stock exchange.

3cr

April 1st, 2008, 11:44 AM

Robinsons Land bares Ortigas condo project
By Jenniffer B. Austria
Manila Standard

Robinsons Land Corp., the property development arm of JG Summit Holdings Inc., yesterday launched its newest twin-tower residential condominium project in Ortigas, called Sonata Private Residences.

Robinsons Land president and chief operating officer Frederick Go said during a launching that the project, site of the former Medical City and strategically located at the corner of San Miguel Avenue and Lourdes St., would primarily cater to the high-end market.

The two residential buildings will have 29 stories each.

Size of the condominium will range from 36.36 square meters to 55.15 sq. m. for one bedroom, 75.1 sq. m. to 101.45 sq. m. for two bedrooms and 115.9 sq. m. to 151.15 sq. m. for three bedrooms.

Go said the project aimed to become the most luxurious residential condominium in the Ortigas financial and commercial district.

Groundbreaking for the Sonata Private Residences is scheduled within the year with completion expected by 2011.

Go said the construction of the residential condominium formed part of the mixed development planned in the one-hectare property, which Robinsons Land acquired last year.

Robinsons Land also plans to put up a deluxe hotel and a 40,000-sq. m. office building that will provide office space to business process outsourcing companies.

Go said the company had not yet finalized the timetable for the construction of the BPO building and hotel.

The property firm has commissioned a renowned international master planner, Hellmuth, Obata and Kassabaum, to determine the optimal design for the prime property.

Robinsons Land has several big-ticket properties in Ortigas, including flagship mall Robinsons Galleria, five-star Crowne Plaza Hotel, Holiday Inn Galleria Manila, Galleria Regency, Robinsons Equitable Tower, Galleria Corporate Center and the soon-to-be-erected East of Galleria Residences.

Robinsons Land last year acquired two large blocks of prime properties in Fort Bonifacio Global City that will also cater to the high-end market.

Go, however, said bulk of the company’s projects would continue to be geared to the middle-income segment of the market, currently the major source of growth for most property companies.

Its parent company, JG Summit, is one of the country’s largest conglomerates in the Philippines with diverse interests in branded consumers foods, agro-industrial and commodity food products, textile, telecommunications, petrochemicals, air transportation and financial services.

Robinsons Land earlier reported that its net income grew by 43 percent to P2.44 billion in fiscal year ended September 2007 from P1.72 billion in the same period a year ago on strong revenues across all business groups.

Revenues in the same period rose 29 percent to P8.99 billion from P6.79 billion.

3cr

April 1st, 2008, 11:45 AM

Gov't bags $2-B investment from China's Shimao Group
04/01/2008
GMA News
http://www.gmanews.tv/story/87136/Govt-bags-2-B-investment-from-Chinas-Shimao-Group

MANILA, Philippines- The Philippine government has bagged a $2-billion land development investment from China's Shimao group, GMA's Flash Report said Tuesday morning.

The television report said the Shanghai-based firm's investment will be for the development of the 45-hectare property of Bases Conversion and Development Authority (BCDA) in The Fort, Taguig City.

The report said the agreement was finalized during the meeting between President Gloria Macapagal Arroyo and owners of Shimao Group Monday night.

Last year, Shimao Group entered into a Memorandum of Understanding with the BCDA for the joint development of a sizeable portion of land in the Bonifacio Global City.

Shimao Group is the owner of the Le Meridian Hotel, the Royal Meridien Hotel – the tallest structure in Shanghai, China and the Grand Hyatt Hotel also in Shanghai. The company has more than 10 luxury hotels in China.

It is a listed company in the Hong Kong stock exchange.

3cr

April 1st, 2008, 11:19 PM

China firm eyes hotel projects
By Marvin Sy
Wednesday, April 2, 2008
PhilStar

President Arroyo confirmed yesterday that the Shimao Group of China will push through with its $2 billion to $4 billion investment in the country.

Contrary to reports that the real estate giant is shifting its interest to Malaysia, the President said that the firm has reiterated its commitment to develop a big commercial and hotel property on a land owned by the Bases Conversion Development Authority (BCDA) in Fort Bonifacio, Taguig.

The President met with Shimao Group chairman Xu Rongmao in Hong Kong during a private dinner hosted by the tycoon.

Interviewed by the Philippine media at her suite in the Grand Hyatt Hotel in Hong Kong yesterday, the President said that the Shimao Group would be developing two towers for its 5 star hotel projects.

It would also construct a commercial establishment, which the President said would be like the malls in Hong Kong.

“That will be at least a $2 billion investment and they have submitted their formal proposal to the BCDA board,” the President said.

Malacañang initially reported the interest of the Shimao Group in the Philippines in March last year.

The President was able to meet with Mr. Xu in Shanghai, China in October last year during which he reiterated his commitment to invest in the Philippines.

According to the President, the Shimao Group would also be developing a resort hotel in the surfing capital of Calicoan Island in Guiwan, Easter Samar.

“We believe the Philippine economy is going up and we trust President Arroyo to heavens,” said William Lee, head of Shimao Group’s investment department and son-in-law of Mr. Xu.

Xu is officially China’s second richest man with his company having exposure in Australia, Russia and Southeast Asian countries.

The firm is involved in the development of high-end residential and commercial properties and five-star hotels.

Even Hong Kong-based tycoon Gordon Wu of Hopewell Holdings has renewed his interest in developing Sangley Point in Cavite.

President Arroyo said Wu knows Sangley Point very well and that the government is very eager to get his company to invest in the former United States naval base.

Wu is no stranger to the Philippines as Hopewell was very active in the development of power plants during the power-starved period in the early 1990s.

Hopewell was behind the development of the power plant in Malabon as well as the coal-fired power plant in Pagbilao, Quezon.

But Mr. Wu informed the President that the government should first address the relocation of the informal settlers in Sangley Point before he decides to take up that investment.

The President then replied that relocation is underway.

Mr. Wu also emphasized that the rules on bidding should be very clear and transparent.

The President said that Mr. Wu was not concerned about incurring losses in the country.

“He wins some, he loses some, he doesn’t mind. But he is willing to help in any way he can,” the President said.

While in Hong Kong, the President also had high tea with various fund managers who attended the Credit Suisse Asian Investment Conference where she delivered the keynote address.

Mrs. Arroyo noted that the fund managers she met represented around $3 trillion in investable funds.

“So if we can get just a fraction of that, it’s going to be a very welcome infusion into the Philippines,” the President said.

Mrs. Arroyo was scheduled to return to the Philippines last night after a two-day official visit to the Special Administrative Region of Hong Kong.

3cr

April 2nd, 2008, 12:18 AM

Plans for biggest RP tourism dev’t project bared today
Manila Bulletin
http://www.mb.com.ph/MAIN20080402120806.html

Four concepts for the Bagong Nayong Pilipino-Manila Bay Integrated City – the Philippines’ biggest tourism development project ever – will be unveiled during the Gaming and Investment Conference for the 2008 Asia’s Gaming and Entertainment plus Leisure Expo (Asia’s GEM) today, Wednesday, April 2.

The Philippine Amusement and Gaming Corporation (Pagcor), through Board Chairman and Chief Executive Officer Efraim C. Genuino, will announce details of the approved concepts for the project in the conference at the Hyatt Hotel and Casino in Malate, Manila.

When completed, the $ 15-billion project is expected to boost tourist arrivals in the country by over a million to three million annually, generate over 250,000 new jobs, and dramatically increase government earnings.

A big local firm and conglomerates from Australia, Japan, and Malaysia submitted the approved concepts for the Bagong Nayong Pilipino, which also formally breaks ground during Asia’s Gem 2008.

All concepts for the project underscore the Philippines as a major tourist destination and an ideal site for "integrated resort" developments – that is, an entertainment and leisure complex that features a complete range of world-class amenities for people of all ages.

The proponents see the Bagong Nayong Pilipino having six-star hotels, gaming facilities, malls, museums, cultural centers, sports arenas, residential villages, and theme parks, with slight variations in each of the four proposals.

One proponent sees the Bagong Nayong Pilipino-Manila Bay Integrated City, which will initially be built in 90 hectares of prime reclaimed land, as a "live, work, and play" complex 24 hours a day, seven days a week. The concept includes hotels and a popular theme park.

Another sees a resort with symbolic landmarks and amenities that represent "the very best of their type in Asia," including one of the largest Ferris wheels in the world.

Another foreign proponent sees the Bagong Nayong Pilipino built around three hotels facing Manila Bay, positioned to create "an unmistakable skyline address" for its resort complex.

A fourth sees the project having an "iconic structure" while seamlessly integrating with the existing amenities in the area.

Pagcor Chairman Genuino, who sees the project as the state-run firm’s ultimate legacy and contribution to the recovery of the country’s economy, said that the Bagong Nayong Pilipino will, "without cost to the government, create endless opportunities for local businessmen and generate jobs for our people."

Besides billions of dollars worth of revenues for the government in terms of direct foreign investments, lease payments, taxes, and tourism receipts, the Manila Bay Integrated City is expected to induce growth in locally based industries such as construction, information technology, food and beverage, hospitality, entertainment, and transportation.

Genuino has proposed that locators in the Bagong Nayong Pilipino pay salaries to their workers in US dollars, so Filipinos can earn as much as their counterparts in the gaming and entertainment industry abroad without leaving their families behind.

Pagcor co-presents Asia’s GEM 2008 with the EuroAsian Cooperation on Gaming Association (ECG), which Genuino heads as interim chairman. The expo is organized by the Asian GEM and Tourism Foundation, Inc.

lightsaber46

April 3rd, 2008, 05:25 AM

Thursday, April 03, 2008
http://www.manilatimes.net/national/2008/apr/03/yehey/business/20080403bus2.html

Ayala Land takes a hit from US woes

By Likha C. Cuevas-Miel Reporter

WITH the US slowdown, the Philippines’ biggest real estate developer said it is shifting its focus to the middle-income segment while strengthening its marketing efforts in the Middle East and Europe.

In a briefing on Wednesday, Rex Mendoza, Ayala Land Inc. (ALI) senior vice-president, said residential sales of Ayala Land Premiere (ALP) , the group’s high-end development unit, “slowed down” leading to flat growth in the first two months this year.

ALP is marketed largely to overseas Filipinos living in the US, with 60 percent of its sales from this market. ALI said it has yet to see a spike in cancellations, which usually stands at 10 percent.

Since ALI saw a “tapering off” in sales abroad, the company is widening its geographical scope, including the Middle East and Europe in its marketing campaign. The company also shifted its thrust as it offers more Avida and Community Innovations Inc. (CII) developments, its mid-income offerings, to US-based Filipinos.

In the first two months of this year, ALI booked a 39-percent increase in sales take up year-on-year, Bernard Vincent Dy, the company’s head of international sales, said.

The property firm is also expanding its other businesses, especially hotels. According to Marivic Añonuevo, senior vice-president for corporate division, the company’s hotels such as Hotel Intercontinental Manila traditionally serve the corporate business traveler market, which is suffering from “tight supply.” ALI, in partnership with Kingdom Hotel Investments, will build two hotels at the Ayala Center. In addition, ALI also sold a parcel of land to the Shangri-La group, which will build a hotel at the Bonifacio Global City.

The company said it is “reviewing” the opportunities presented by the growing tourism market and is “studying closely” what kind of hotels it would build in its projects in the south. Among its ventures south of Manila is Nuvali, the company’s largest development to date in Canlubang, Laguna.

ALI is earmarking P24.3 billion in capital expenditures, P10 billion of which would be borrowed while the rest would come from internally generated funds.

3cr

April 3rd, 2008, 06:34 AM

Alliance Global, Star Cruises to build $1-B leisure resort
By Zinnia B. Dela Peña
PhilStar
http://www.philstar.com/index.php?Business&p=49&type=2&sec=27&aid=200804022

Alliance Global Group Inc. (AGI) has entered into a memorandum of understanding with Star Cruises Ltd., an affiliate of Malaysian conglomerate Genting Group, to put up a $1-billion integrated leisure and resort as part of the multi-billion dollar Bagong Nayong Pilipino Manila Bay Integrated City Project in the Manila Bay reclamation area.

AGI, the listed holding firm of property tycoon Andrew Tan, will undertake the proposed project through subsidiary Travellers International Hotel Group Inc.

The project will entail the development of leisure and entertainment facilities including a theme park, theaters, amusement and cultural centers, a retail and gaming center and hotels. It forms part of the Philippine Amusement & Gaming Corp.’s vision to build an integrated tourism zone on a 40-hectare property in the Manila Bay reclamation area.

Pagcor said it hopes that the massive development will attract at least $4 billion in investments from both foreign and local investors and expects to generate about 100,000 jobs once the entire development is fully completed.

Under the plan, Travellers International will build hotels with a minimum of 1,000 rooms spread out over several phases of development.

“Our proposal comes at an opportune time when there is increasing awareness of the Philippines as a tourist destination, with the country achieving a milestone in 2007 with a record three million tourist arrivals for the first time in its history,” said AGI Chairman Andrew Tan.

“With the continued surge in tourist arrivals, we expect existing stock of hotel rooms to fall short of demand,” Tan added.

AGI’s joint venture with Star Cruises brings together a partnership of two reputable and respected conglomerates. AGI is focused on property development, food and beverage and quick-service restaurants while the Star Cruises Group is the third largest cruise operator in the world.

Star Cruises, which has total assets of almost $7 billion in 2007, together with its affiliate, the Genting Group, is involved in a diversified range of businesses including, leisure, hospitality, gaming, entertainment, cruise and cruise-related, power and oil and gas exploration. The Genting Group, with total assets of $10 billion, is the largest Asian-based leisure, entertainment and hospitality conglomerate with close to 40 years of experience. Its flagship Genting Highlands Resort is one of Asia’s leading integrated leisure and entertainment resort with the largest stock of hotel rooms numbering 10,000 in a single development.

The Genting Group is also spending $3.6 billion), for a 49-hectare integrated resort at Singapore’s Sentosa Island, called Resorts World at Sentosa. To be opened in 2010, the project is envisioned to be a large-scale iconic development focused on attracting families and holiday vacationers. The project will include the first Universal Studios in Southeast Asia, the world’s largest Oceanarium Marine Life Park, an arts and science museum and a number of hotels with 1,800 rooms, retail and gaming center.

Pagcor is starting 2008 on the back of a landmark year in 2007, having achieved its highest total annual income ever of P27.8 billion.

“Pagcor’s plan to team up with Travellers for the 40-hectare resort project in the Bagong Nayong Pilipino Manila Bay Integrated City will help mak Philippines become a premier tourist destination,” Tan said.

“Star Cruises’ interest in the project is a strong testament of foreign investment interest in the underlying attraction of Philippines as the hub for leisure and entertainment and a vote of confidence in the country’s economy and tourism industry,” he said.

lightsaber46

April 8th, 2008, 04:15 AM

Filinvest to spend P6B to sustain momentum
April 06, 2008 22:24:00
Daxim Lucas
Philippine Daily Inquirer
http://www.inquirer.net/propertyguide/buildingblocks/view.php?db=1&article=20080406-128790

MANILA, Philippines—The earnings of publicly listed Filinvest Land Inc. (FLI) almost doubled last year as the company rode the crest of the recent real estate boom, registering strong results from the real estate development business as well as from rental income.

At the same time, the company said that it would allocate up to P6 billion for capital expenditures this year, launching 36 new projects to sustain its growth momentum as the local economy starts to feel the effects of the global slowdown.

According to the firm, it has lined up 36 new projects and phases for launching this year with an estimated sales value of P10 billion.

Some of these projects will be in new locations, beginning with the first residential subdivision in Butuan City, as well as more of the inner-city, mid-rise residential buildings.

“[Filinvest Land] is increasing its marketing efforts to reach more of its target market in the overseas Filipino worker-rich areas of Europe, the Middle East and Asia,” the company said in a statement.

The real estate firm, controlled by the Gotianun family, reported an audited net income of P1.7 billion for 2007. This was an increase of 95 percent from net earnings of P872 million reported in the previous year.

Revenues grew 46 percent to P5.1 billion from P3.5 billion in 2006.

“The growth in both revenues and net income is largely attributable to the strong results of the real estate development business, boosted by the full-year contribution of the rental income generated by the investment properties which were acquired in September 2006,” the company said.

Last year, 69 percent of Filinvest Land’s revenues came from the real estate development business, 7 percent from equity in net earnings of Filinvest Alabang Inc., while 20 percent were leasing revenues from Festival Supermall, PBCom Tower in Makati and the BPO office buildings at Northgate Cyberzone in Filinvest Corporate City in Alabang. The balance of 4 percent was from interest and other income.

Equity in net earnings from Filinvest Alabang included a P280-million net gain from the sale of Filinvest Land shares during the follow-on offering in February 2007.

Socialized and affordable housing, consisting of house and lot packages priced from P300,000 to P1.5 million, accounted for P748 million or 24 percent of Filinvest Land’s 2007 real estate development revenues.

The middle-income segment, covering house and lot packages up to P4 million, contributed P1.4 billion or 43 percent.

High-end projects, farm estates, industrial lots and “entrepreneurial housing” contributed the balance of P1.1 billion or 33 percent.

Filinvest Land has 60 ongoing projects which generated a sales take-up of P5 billion in 2007, its highest since the Asian financial crisis. This was a 35-percent increase from the P3.7 billion generated in 2006.

In 2007, Filinvest Land also expanded into several new areas, including the provinces of Pampanga, Tarlac and Palawan.

It also started offering two new products. The first is the mid-rise residential building (MRB) development in major urban centers. Last year, Filinvest Land launched two MRB projects, the first along Ortigas Extension, Pasig, and the other in Davao City.

3cr

April 9th, 2008, 10:05 AM

Guidelines set for govt, private sector joint ventures
By Darwin G. Amojelar, Reporter
Manila Times
http://www.manilatimes.net/national/2008/apr/09/yehey/business/20080409bus5.html

THE board of the National Economic and Development Authority (NEDA) on Tuesday approved the guidelines covering government and private sector partnerships, paving the way for the investment of a Chinese real estate firm in a prime lot at the Bonifacio Global City in Taguig City.

Acting Socioeconomic Planning Secretary Augusto Santos said the NEDA board has approved the guidelines for all negotiated projects that government agencies and private sector firms will undertake as joint ventures.

Santos said the approved guidelines will pave the way for the development of the $2-billion project at the Bonifacio Global City proposed by Chinese real-estate giant Shimao Property Holdings Ltd.

“With the approval of the guidelines, the Shimao project may push through,” he said.

Besides developing a property in Taguig, the Chinese firm is also planning a 500-room resort with two towers in Calicoan Island in Guiuan, Eastern Samar.

Earlier, NEDA announced 10 priority projects that will be implemented through public and private partnerships. These are the Operation & Maintenance (O&M) of the Subic-Clark-Tarlac Expressway (SCTEx); the 300-million-liter water per day (MLD) project of the Metropolitan Waterworks and Sewerage System (MWSS) worth P5.20 billion; the 50-MLD Wawa River Project worth P1.95 billion; and the Department of Energy’s Power Capacity Requirements for the Luzon Grid of 1,950 megawatts (MW) from 2010 to 2014, Visayas Grid of 820 MW from 2011 to 2014, and Mindanao Grid, 850 MW from 2009 to 2014.

The 10 projects are included in the updated P2.06-trillion worth Comprehensive Infrastructure Investment Program, which identifies the government’s major infrastructure projects to be implemented from 2007 until beyond 2010.

-TC-

April 13th, 2008, 07:22 PM

http://business.inquirer.net/money/breakingnews/view/20080413-130114/Merrill-raises-25-3B-Pacific-Rim-property-fund

Merrill raises $2.5-3B Pacific Rim property fund
By Jason Subler
Reuters
04/13/2008

BOAO, China--Merrill Lynch & Co is raising a Pacific Rim real estate investment fund worth around $2.5-$3 billion, an executive said on Sunday, saying certain Asian economies were well-placed to weather global financial turmoil.

The launch of the fund comes at a time when many investors are looking to Asia as a safe haven in the wake of the credit crunch set off by US subprime woes, as others shop for deals in the United States and Europe.

Damian Chunilal, Merrill's head of Pacific Rim origination, told reporters that the new fund will invest in a variety of types of property across the Pacific Rim, including in India, Australia, Japan and the rest of Asia.

The fund is part of an increasing push by the largest US brokerage to build up third-party funds to do principal investing, he said.

"That's very much going to be a model that's repeated in the future with different types of funds," Chunilal said, speaking on the sidelines of the Boao Forum for Asia being held on the southern Chinese island province of Hainan.

"That's something we are very actively exploring at the moment."

The firm is also currently raising a European real estate fund, Chunilal said, without providing details. He added that other new funds could focus on private equity and possibly infrastructure.

Other global investment banks are also planning to launch funds for Asian property. UBS recently said it plans to launch a roughly $1 billion fund for investing in China. Morgan Stanley and global investment firm Blackstone Group are also active in real estate in the region.

While European and US property markets are waning in the wake of the global credit crunch, Asia still shows signs of strength, recording a 26-percent jump in direct property investment to $121 billion in 2007, according to consultant Jones Lang LaSalle.

Chunilal said that although Asian financial markets had also taken a hit from the global credit woes, he thought that their economies generally would weather the storm relatively well, in part because liquidity in the banking system remained adequate.

"We still see significant growth momentum in this region, which I think will survive even if current headwinds in the US slow things a little bit," he said.

-TC-

April 13th, 2008, 07:25 PM

http://business.inquirer.net/money/breakingnews/view/20080413-130081/Philippine-property-firms-look-closer-to-home-for-sales

Philippine property firms look closer to home for sales
By Rosemarie Francisco
Reuters
04/13/2008

MANILA, Philippines--Merly Paz, a Filipina domestic worker in Hong Kong, has stopped sending money for the construction of her home in southern Iriga City because the peso value of her US dollar-pegged salary has fallen sharply.

"My salary is limited so I placed the house on hold," said 31-year-old Paz who has been working in Hong Kong for nearly eight years. "But the longer I'm putting it on hold, the more that prices of construction materials are rising."

A real estate boom in the Philippines has been powered by demand from overseas Filipino workers (OFWs) such as Paz who send home salaries to fund purchases and construction of family homes.

But many OFWs have had to cut back on property purchases recently as the peso value of their salaries dropped by 19 percent in the past year due to the weak US dollar. A majority of the Philippines' eight million OFWs work in the United States.

This drop in demand should have had a chilling effect on the Philippine property sector, where real estate prices surged 18 percent in 2007 and 38 percent in 2006 largely because of demand from OFWs.

Indeed, share prices of property firms have plunged over a slowdown in overseas sales and worries of mortgage defaults.

But domestic sales are being kept buoyant by a huge housing backlog, low interest rates and friendly payment terms, higher incomes of workers in the growing outsourcing industry, and a rising expatriate population.

The slowdown in construction of new housing after the Asian financial crisis of 1997-98 has led to a housing backlog of 3.8 million units in the Philippines, said Alex Pomento, strategist and head of research at Macquarie Securities.

About 70 percent of the country's estimated 90 million population do not have their own homes, he said.

"It's end-user demand driven. It is not investor driven, that's the difference with the property boom before the Asian crisis," said Victor Asuncion, director at property services firm CB Richard Ellis Philippines.

"It is not speculative. There is a specific demand being addressed."

Construction is booming across much of the country, especially in Manila, a mostly low-rise city where dozens of residential towers are beginning to dot the skyline.

At least 38,000 new apartments will be available by 2013 in the Makati financial district alone and in nearby Bonifacio Global City, property firms say. There is no let-up in demand.

In just four days last month, market leader Ayala Land Inc sold about a third of the P3.3-billion value of a new residential tower at Bonifacio Global City.

"They say the property market is slowing. But despite the slower US sales for our premier product, we really can't feel it yet because the local market is still strong," said Rex Mendoza, head of residential and corporate sales at ALI.

Take-up rates or reservations for all its residential projects are up 39 percent in the first two months of the year, the same pace as the whole of 2007.

Cheaper prices

But the surge in real estate prices seems to be a thing of the past. Pomento said he saw prices rising about 6 percent in 2008 and next year.

"The days of aggressive growth appear to be behind us," he said. "We expect price hikes to be capped by the more competitive environment."

At least partly because of that, local property firms have sustained heavy falls on the stock market, with ALI down nearly 25 percent and mass housing leader Vista Land and Lifescapes falling 50 percent in the first quarter against a 17.6-percent drop in the main index in the same period.

"On a 12-month view, the negatives cannot be disregarded and the market is already trying to price in the concerns ahead of any negative news from property companies," CLSA said in a recent study on the Philippine property market.

Real estate firms say the fall is more because of depressed sentiment overall and that while local demand for housing is strong, they haven't given up on the overseas market.

In the first two months of this year, ALI says its sales to Filipinos abroad were down to 22 percent of total housing revenues against 35 percent for all of 2007.

To offset falling demand from the United States and Hong Kong where the local currency is pegged against the US dollar and where many OFWs work, property firms are now aggressively selling their residential projects to OFWs in the Middle East and Europe.

"I think our growth potential will continue so I'm hoping the market will recognize that," said ALI President Jaime Ayala, adding the share price was "very much driven by global sentiment."

-TC-

April 14th, 2008, 07:55 PM

http://www.philstar.com/index.php?Business&p=49&type=2&sec=27&aid=2008041430

Megaworld posts record P3.01-B income in 2007

By Zinnia B. Dela Peña
April 15, 2008
Megaworld Corp., an upscale propery development firm owned by tycoon Andrew Tan, said its net earnings reached a record P3.01 billion last year on robust real estate sales.

In a disclosure to the Philippine Stock Exchange yesterday, Megaworld said last year’s income level marked a 48-percent jump from the previous year’s P2.04 billion.

“2007 was a great year for us as we hit our highest ever net income in our 19-year history,” said Tan, adding that the company is confident it can sustain its growth across all business segments this year inspite of a challenging business environment.”

“The Philippine market remains to be resilient and offers vast opportunities for Megaworld to grow its business. We are confident that in 2008 we will continue our growth path and end the year with another record profitability,” Tan further said.

Megaworld registered revenues of P14.64 billion, 56 percent higher than the P9.37 billion recorded in 2006 as real estate sales breached the P10-billion mark, driven by the strong performance of its residential condominium and BPO (business process outsourcing) projects.

Real estate sales grew 72 percent to P10.61 billion from only P6.16 billion in 2006 while rental revenues from both BPO office and retail buildings pumped in P931.88 million or an increase of 32 percent from the year earlier level of P707.32 million.

“Filipinos have realized that condominium living, especially in our live-work-play developments, is the preferred choice for urban dwellers. The live-work-play community concept continues to create synergies in all our business segments underscored by the consistent double-digit rise in our rental income,” Tan said.

He said Megaworld will also continue to invest in building its rental income portfolio and within the various communities under its live-work-play concept of development.

Megaworld’s financial position remains strong with cash of P13.64 billion as against total financial debt of P6.35 billion, producing a net cash position of P7.29 billion.

“During these times of global uncertainty, Megaworld has consciously adopted a conservative financial management strategy to ensure all our stakeholders of the company’s financial strength to sustain its businesses,” said Tan.

To ensure continued growth, Megaworld is spending between P10 billion and P12 billion this year to fund the various projects in its six mega-communities, namely Eastwood City (Quezon City), Mckinley Hills (Taguig City), Forbestown Center (Taguig City), Manhattan Garden City (Quezon City), Newport City (Pasay City) and Cityplace (City of Manila).

In addition, Megaworld is also looking to expand into Iloilo City and Mactan, Cebu within the year.

leechtat

April 17th, 2008, 05:43 AM

there is a new policy for ALI guys. take note ALI clients/buyers.

You can now upgrade your units from Avida to CII or from CII to ALP. your present agent can handle that upgrade for you.

So all in all, CII agents got the best avenue for portfolio selling. they can now advise their clients who bought in avida to upgrade their units to CII projects and they can also offer ALP projects just the same as ALP agents. YaY!

Also, all ALI agents will be issued a broker's license. so every ALI agent you deal with will be/or are going to be a licensed broker. so if you are not satisfied with their service, you can easily report them.. hehe.. :lol:

3cr

April 17th, 2008, 11:42 PM

Property prices consolidating as banks rush to sell idle assets
Business World
http://www.bworldonline.com/BW041808/content.php?id=051

THERE ARE opportunities to buy house and lots and big tracts of land with property prices consolidating, as banks scramble to dispose of idle assets ahead of the expiration of a law granting tax perks to buyers and sellers of distressed assets.

In a briefing yesterday, CB Richard Ellis Philippines General Manager Trent M. Frankum said special purpose vehicles (SPV) and local banks would be "competing" to unload small-ticket assets and develop or sell big-ticket assets.

The Special Purpose Vehicle (SPV) Act of 2002 expires next month.

"It affects the value of the properties in a big way There are a lot of properties that have come on to the market through the SPVs and banks that are affecting the valuation and market value of these properties. We are seeing a shift in the market from a seller’s market to a buyer’s market," he added.

Citing Bangko Sentral ng Pilipinas estimates, Mr. Frankum said there are about P520 billion in nonperforming assets (NPA) for disposal with only about P170 billion sold to SPVs. Upon expiration of the law, which was extended to May 14 this year through Republic Act No. 9343, banks will have dispose of the remaining P350 billion worth of NPAs without incentives, and this is urgent as they have to comply with stricter Basel 2 capital rules.

Banks have to beef up their capital under the Basel 2 standard which emphasizes risk-based supervision, an approach that allows banks to take risks as long as they demonstrate the ability to manage them.

CB Richard Ellis Philippines sees lower property values due to competition between banks and SPVs.

"It is a good time to buy because of competition. If they sell it to the market, they will be competing against the domestic banks, which also cherry-picked the prime assets from the portfolios before they sold to SPVs," Mr. Frankum said.

Asked whether it would be wise to extend anew the SPV law, Mr. Frankum does not see any harm in giving sellers and buyers another chance.

"But you don’t want to keep sending the message to the market that we will keep on accommodating you time and time again," he said.

With rents in the Makati central business district (CBD) rising to P1,200 per square meter, CB Richard Ellis Philippines Vice-Chairman Joey M. Radovan said rents would stabilize at the range of P800 to P1,000 per square meter by yearend as some business process outsourcing (BPO) companies will move out of Grade A high-rise building to IT buildings in new business districts.

Feeling the pressure of high rental costs, some BPO firms will move out to new low-cost and growth areas.

CB Richard Ellis Philippines Chairman Rick Santos noted that building sales transactions have resumed in the Makati CBD over the last six months.

He cited the sale by listed holding firm South China Resources, Inc. and the Puyat family of two parcels of land with an aggregate area of 9,497 square meters beside Dasmariñas Village for P1.2 billion; San Miguel Properties, Inc. of its equity share in Enterprise Center to Shang Properties, Inc.; and Rizal Commercial Banking Corp. of a 2,400-square meter lot to Valparaiso I Land Holdings, Inc. for P975 million. Businessman William Gatchalian has also bought the 2,400-square meter Ayala Life Assurance building on Ayala Avenue corner V. Rufino Avenue for P696 million.

Mr. Santos also said there is pent-up demand for new hotel developments in Makati, Ortigas and emerging business districts since there is already a critical mass of office buildings and business travel.