By Ray Eñano
| Posted on Jun. 27, 2013 at 12:01am
[
manilastandardtoday.com ]
A property
bubble in the Philippines is not happening yet, despite fears raised by some
conservative analysts. The real estate boom will persist as long as migrant
Filipino workers continue to fuel it, so says a top executive of a leading
property company in the Philippines.
Remittances
from Filipinos working overseas and the current property boom have become
intertwined, prompting real estate companies to build more condominium towers
and offer other types of affordable housing units. Ambassador Jose “Joey” E.B.
Antonio, chairman of Century Properties Group Inc., told this writer recently
over a round of golf at the Manila Golf and Country Club in Makati City that
demand for housing and condominium units from migrant Filipino workers had not
abated.
Workers
overseas remit billions of dollars annually to provide financial support to the
family and close relatives they left in the Philippines. Relatives normally
deposit part of the remittance in time deposits. A part may serve as a start-up
fund for a small business venture, like the acquisition of a jeepney unit,
to augment the income of relatives. For
some, the stock market may be a lucrative investment outlet.
Bank
deposits, however, are not a sound investment proposition because of low
interest rates. Small business ventures, meanwhile, may go awry to the
disappointment of the main fund provider.
Joey says
workers overseas are discouraged by the low or risky return of their current
investments. They, instead, turn to real estate as one of their investment
options. Real estate companies like Joey’s Century Properties, thus, have taken
advantage of the appetite of migrant workers for condominium and housing units.
Personal
remittances from migrant Filipino workers increased 7 percent in April to
$2.003 billion from $1.871 billion year-on-year, bringing the total in the
first four months to $7.7 billion, up 6.4 percent from $7.2 billion on year.
More towers
Century
Properties, SM Development Corp., Megaworld Corp. and other property companies
are racing against each other to build more condominium towers and raise funds
in the face of increasing demand.
Century
Properties started turning over 1,432 units of its 72-story Gramercy Residences
in Makati City, one of the tallest buildings in the Philippines with a gross
floor area of 121,595 square meters. It is raising more funds amid a
double-digit growth in reservation sales and its bullish outlook on the
property sector.
Joey told
reporters earlier that reservation sales were expected to rise between 10 percent
and 15 percent this year from P21.4
billion in 2012.
“We have
consistently been very active in the property sector. We take the opportunities
as they come. Right now I feel the big story is actually the rising
middle-class in the Philippines. Century Properties is addressing the needs of
the middle-class,” he said. Century Properties has tapped the capital market
for funds, tasking Standard Chartered Bank to raise $100 million from a bond
offering.
SM
Development Corp., the property unit of retail tycoon Henry Sy, meanwhile, has
raised P6.2 billion from the issuance of 7- and 10-year notes to finance real
estate projects.
SM
Development by far is one of the most aggressive companies in the condominium
sector, along with Megaworld. It is launching three to four new projects this
year. These are Trees Residences and Grass Residences Phase 2 in Quezon City;
Shore Residences at the Mall of Asia Complex; and possibly Rich Residences in
Mandaluyong.
Bullish
Megaworld is
equally bullish. It is confident of generating P12 billion in sales from four
new high-end residential towers that will soon rise in the Makati Central
Business District.
Megaworld
said the demand for residential units in Makati remained strong as reflected in
the robust sales performance of the company’s four residential buildings under
construction.
Megaworld’s
two “super high-end” projects, called Two Central and Three Central along
Valero Street, are 100 percent and 85 percent sold out, respectively.
Paseo
Heights, a newly-launched residential tower located in Salcedo Village,
meanwhile, is 65 percent sold out while another tower that will rise along
Legaspi Village called Greenbelt Hamilton is already 75 percent sold out.
Megaworld
expects to complete the new buildings, which will add 2,000 condominium units
of inventory in Makati, over the next three to five years. The company
currently has 18 residential and office buildings in Makati.
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