Thursday, August 20, 2009 | MANILA, PHILIPPINES [ BusinessWorld Online ]
REAL ESTATE developer Phinma Property Holdings Corp. is considering buying land occupied by squatters and build low-cost housing for them, while reserving a portion for customers in other market segments to make money.
In a briefing Tuesday, Phinma Properties President and Chief Executive Officer Willie Joven Uy said the company is studying whether it could build mid-rise condominiums for the lower-end market in Quezon City.
"A lot of land owners have problems with land [occupied by squatters]. [We will look for] four hectares [to buy and develop]... [After acquiring the land] our plan is to limit the informal settlers in one area and build units worth P600,000 each for them," he said.
Mr. Uy said the units would still be as the same quality as Phinma Properties’ other projects, but would have less decorative features and smaller floor areas.
He was confident the lower-income segment would be able to afford such projects because of the government’s socialized housing programs.
He also pointed to a Phinma Properties survey that found that squatters were willing to pay up to P5,000 monthly for rights in some areas for a 10-square-meter space.
"As long as we recover our investment we would be happy, because we would make money on the three hectares [which would be developed for other customers]," he added.
Mr. Uy also said the company is negotiating with potential partners on projects to be launched next year in Pasig and two in either Parañaque or Muntinlupa.
Phinma Properties, whose projects are mostly in Metro Manila, is also studying whether it could build residential projects in Cebu and Davao.
Phinma Properties expects sales to reach P1.4 billion this year from about a billion last year, as the global economic slowdown did not have much impact on revenues, Mr. Uy said.
"The [financial crisis] affected us in a positive way because people looking at higher-end products considered Phinma Properties," he said, noting that October 2008 — when news about the collapse of several financial companies in the US broke out — was one of the company’s better months last year.
Last Tuesday, the property developer launched its Flora Vista project in Quezon City, to be sold to the mid-income segment. The company said two buildings would be built by the first quarter next year.
The project, worth P550 million, will have nine five-storey buildings, with units having a standard size of 30 square meters. Prices start at P850,000.
The company is also spending P800 million for its Sofia Bellevue project in Quezon City and P350 million for Fountain Breeze project in Parañaque.
Mr. Uy said the projects would be funded by bank loans and cash generated from sales. — Don Gil K. Carreon