Vol. XXII, No. 94 [ BusinessWorld Online ]
Thursday, December 4, 2008 | MANILA, PHILIPPINES
HONG KONG — The Century Properties Group plans to more than double its spending next year to build condominiums in the Philippines, its chairman, Jose E.B. Antonio, said yesterday.
Despite a financial crisis in the US and Europe that has led some property developers to pull back, Century Properties will spend as much as $15 billion ($303 million) for various projects in the business districts of Makati, Ortigas in Pasig and Fort Bonifacio, up from $6 billion this year, he said.
"We want to take advantage of the lower costs of construction materials. With oil prices down, prices of steel and other materials have also fallen," Mr. Antonio said in an interview on the sidelines of a conference in Hong Kong.
The company is marketing its products to 11 million Filipinos working abroad, hoping they will buy its mostly high-rise residential units.
Remittances by Filipinos working overseas have remained buoyant despite the slowing global economy, which has prompted developers around the world to cut or postpone investments, sending property prices spiralling downwards. Data from the central bank showed that funds sent home by Filipinos living abroad rose by almost a fifth to $12.3 billion in January to September from a year earlier.
"Despite the financial crisis, property prices in the Philippines are holding up. That’s because of the demand from Filipinos overseas," Mr. Antonio said. "Also, unlike in other countries, the Philippines still have a limited supply of housing units," he added.
The company has 27 offices outside of the Philippines to market their projects to Filipinos working and living abroad, he said. "Filipinos working abroad are a huge market. They have the spending power, and they find property prices in the country relatively cheaper than, say, in the UK," he said.
In a related development, listed real estate developer Anchor Land Holdings, Inc. hiked its net profits by almost two-thirds in the third quarter, bucking a trend for dipping profits among realty firms.
Based on its financial statement, Anchor Land’s July to September net income stood at P82 million from P49 million last year, bringing its nine-month profit to P191 million — an almost threefold increase from a year earlier.
"In line with the company’s plan of expansion, Anchor Land is aggressively recruiting personnel to increase its sales network and backroom support," it said.
In an interview, Anchor Land Vice-Chairman Steve Li said the company remained optimistic about hitting its profit target this year, although they expect growth to be not as robust next year. "The market has been severely affected by what is happening globally. We are taking a cautious stance although we are optimistic about our performance next year since the end-user market is still there," he said.
Anchor Land earlier said it expected profits to go up by 2.5% to P250 million this year, while revenues would likely more than double to P1.02 billion.
Ramon E. Aguirre, Collier International research manager, said the difference between Anchor Land and other developers is that it has a niche market.
"They are exclusive to Filipino-Chinese customers who are well-off and thus have the means to buy properties," he said.
The property analyst said he expects demand for Anchor Land unit to continue. "If a company has found its niche, it will be better if it sticks with it." — Reuters and Kristine Jane R. Liu
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