Thursday, September 17, 2009 | MANILA, PHILIPPINES [ BusinessWorld Online ]
BY KRISTINE JANE R. LIU, Reporter
PROPERTY FIRM Moldex Realty Inc. will temporarily put on hold plans to develop high-end projects pending the full recovery of the global economy.
The company will focus on Luzon, tapping the low and middle-income markets, where demand remains high.
In an interview, Moldex President Rey Ignacio Diaz said that while the country was spared from the full impact of the financial meltdown that hit major economies last year, overseas Filipinos took a hit.
As such, it was no surprise that property developers saw a decline in sales in recent quarters after designing products for the overseas Filipino market, he said.
"The property industry is generally doing good [except] those companies who are dependent on the [overseas Filipino] market," Mr. Diaz said.
"A typical [overseas Filipino] is still a bit jittery now. His confidence is shattered. Most of them are holding on to their money and would rather not invest in capital assets like the property sector," he added.
THE Priscilla model house of Moldex Realty’s MetroGate series
Despite the government projections of a recovery next year, Mr. Diaz said "real recovery" won’t come in until the last quarter of 2010 or the early part of 2011.
Because of this, Moldex will continue to position itself to the local market, he said, citing "pent-up" demand that needed to be tapped. The overseas Filipino market, he pointed out, constitutes only 20% of the company’s total revenue and there is no plan to increase its share.
The company will also continue to focus on the middle- to lower-middle market because most buyers consider affordability before purchasing a house, he said.
"For now, the middle-income and the lower middle-income will continue to be the bread and butter of Moldex," Mr. Diaz said.
The company is pursuing five projects that would be launched in the next 12 months. These projects, three of which are high-rise buildings, will be located in Valenzuela, Makati, Roxas Boulevard in Manila, Bulacan and Cavite. The other projects are subdivisions.
"There is still a big population in Luzon that we can tap [so we will] continue to focus on this market for the next five years. The demand is still there and it is not decreasing," he said.
Moldex still has 400 hectares of land waiting to be developed, he said.
Mr. Diaz said Moldex will stop developing high-end projects in the next three years.
"I believe there is an over-supply in the high-end market," Mr. Diaz said.
Moldex’s first luxury project, the 1322 Golden Empire Tower on Roxas Boulevard, for instance, has experienced a significant slowdown in sales.
From the usual six units sold annually, only two units were sold this year, Mr. Diaz said.
He said Moldex has managed to sell 128 of the total 328 units since the company first marketed the 57-story tower in 1996.
Prices for the high-end tower range from P16 million for a 186-square-meter (sq. m.) unit to P50 million for the biggest unit, measuring 400 sq. m.
Moldex Realty is part of Jacinto T. Uy’s Moldex Group of Companies known for its PVC pipes. It it also involved in construction, marketing and insurance.
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