PHILIPPINE REAL ESTATE and RELATED NEWS in and around the country . . .
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Hoteliers seek recall of BOI rule on income tax holidays

By Louella D. Desiderio (The Philippine Star) | Updated May 1, 2013 - 12:00am
MANILA, Philippines - The Philippine Hotel Federation Inc. is calling on the Board of Investments (BOI) to revoke a regulation removing the income tax holiday (ITH) for tourism accommodation facilities in Metro Manila, Cebu City, Mactan Island and Boracay Island.
In an open letter to President Aquino published last Monday, the group headed by Arthur Lopez said it wants the BOI to revoke Regulation 2013-001 approved on March 5.
Under the new policy, expanding tourism accommodation projects such as hotels, resorts and bed and breakfast facilities in the four areas will no longer qualify for ITH.
Although the government is promoting the country as a viable investment haven, the group said offering both fiscal and non-fiscal incentives to provide the Philippines a competitive edge over its Association of Southeast Asian Nations’ neighbors is important.
The Department of Tourism (DOT) supported the federation’s call citing the anticipated room demand in line with the National Tourism Development Plan’s goal of achieving 10 million foreign tourists and 35.5 million domestic travelers by 2016.
The group also cited the expected demand from the country’s hosting of the Asia Pacific Economic Cooperation (APEC) forum in 2015 as well as the location of the primary gateways in Metro Manila and Cebu.
“Unfortunately, the Tourism Infrastructure and Enterprise Zone Authority (TIEZA), which is mandated by the Tourism Act of 2009 as the agency tasked to grant and administer incentives still awaits the issuance by the Bureau of Internal Revenue and the Department of Finance of the necessary revenue regulations that would allow it to implement the law,” it said.
The BOI regulation was issued following the Philippine Economic Zone Authority’s decision to amend rules on incentives given to tourism economic zone developers and locator enterprises in the four areas.
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Late-comer Sta. Lucia proves timing perfect

Published on Wednesday, 01 May 2013 00:00  [ Malaya.com.ph ]
Written by IRMA ISIP
Sta. Lucia Land may have been late in selling to overseas-based Filipinos but its late timing proved perfect.
It started selling its project abroad in 2011 just when other companies had made inroads almost saturating the market.
Michelle Robles, corporate marketing director of Sta. Lucia Land, said  the company differed by giving buyers a variety of choices in acquiring properties in the Philippines either for their own use or for investment.
Liezel Magpoc, company senior vice president for international sales, said Sta. Lucia was the only developer offering products to suit the needs and budget of the market: either a lot, a house and lot package or investment in a condominium or a condotel.
Magpoc said another advantage of Sta. Lucia is that its development is all over the Philippines with 200 projects covering 10,000 hectares enabling it to offer projects in buyers’ hometown. Magpoc said that Sta Lucia in its roadshows abroad tries to convince Filipinos it is better to invest their hard-earned money in properties rather than keeping them in banks.
“Somebody who could only afford to part with P3,000 to P4,000 per month can initially buy a lot from us, then eventually Sta. Lucia can construct a house for him,” she said.
According to Magpoc, the income, profession and location of the overseas Filipinos have much to do with the salability of Sta. Lucia’s real estate products.
“For example, some parts of Italy have a large number of Filipinos who hail from Batangas who would naturally want to buy properties located in that province. In Spain, majority of our buyers come from Nueva Ecija and Ilocos. In London, since many Filipinos there work as nurses, they earn more. But surprisingly it is the domestics who can afford to buy Sta. Lucia condos because they don’t pay taxes,” Magpoc said.
“US and Canada-based Filipinos prefer condos because quite a number of our “kababayans”  no longer see themselves retiring here. They hold on to condos for their visits, as investment or for their relatives here,” Magpoc added.
Middle East and Singapore-based Filipinos get lots or house and lot packages since most of them return to live in the country, plus the fact that it is hard to own properties in those countries.
In general, she said, lots are more preferred by overseas Filipinos because they are more affordable. A piece of land is the first step to fulfilling every Filipino’s dream to own a home.
“It’s a wise choice because land values appreciate fast. One project we launched in San Jose del Monte, Bulacan in 2005 used to sell P3,500 per square meter. The value has nearly doubled to P6,800 per sq.m.,” Magpoc said. Sta. Lucia’s main product lines really are in subdivisions and horizontal developments.
“This is actually where Sta. Lucia started,” Magpoc said.
Leveraging on that strength, it has not been difficult for Sta. Lucia to build up its land banking through joint venture arrangements with locals in areas where there opportunities for development.
“That sets us apart from other developers because not everyone can afford a property in Makati. This also addresses the fact that overseas Filipios still prefer to own a property in their hometown. As a national brand, Sta. Lucia partners with the locals who know the community,” said Magpoc.
This also explains why Sta. Lucia is not present in the Makati CBD (Central Business Disrict) where there already is a heavy concentration of condos.
“A lot of condominium developments are so-called transit-oriented – where the buildings are near access to transportation. We believe otherwise. Once a community rises, the  transportation system soon follows the development which was our experience in Davao,” said Magpoc.
Magpoc said other developers which have gone much ahead abroad did not find it difficult to sell condos at the start because buyers have little choice.  The come-on had always been affordability.
“Imagine a P1.7 million 17-sq.m. condo unit at P10,000 per square meter is affordable. That’s very nice to hear but the buyer has no idea how small that 17-sq.m. unit actually is. For the same price, one can have a house and lot somewhere in Batangas,” Magpoc said.
Though competition is stiff, Magpoc said sales of the international operations are increasing every year “because we don’t stop in our developments.”
She said even before setting up abroad, 90 to 95 percent of Sta. Lucia’s buyers are OFWs but transactions are done here through their relatives and not direct to the buyers.
The fact that Sta. Lucia’s products are for end-users, the default rate averages 10 to 15 percent. The speculative behavior of the market since the Asian financial crisis seems to have disappeared.
Magpoc said Sta. Lucia also prides itself as the most reasonably-priced among the developers “because we don’t spend too much on advertising.”
“We only rely on our track record,” Magpoc added.
But despite establishing a niche in horizontal development, Sta. Lucia has not totally ignored condo development but under different tack.
According to Magpoc, Sta. Lucia focuses on tourist areas and not CBDs in building condos geared for investments through rental income
Sta Lucia’s condotel concept is similar to time-share, only better. Unlike time-share, condotel investors get to own a unit. Initially, the unit is pooled together with other units and leased out to the developer for a period of 15 years, renewable. The investor starts earning once full down payment is made, normally after three years which is also about the time the construction shall have been finished. In addition, the investor is entitled to use his unit, depending on the availability, for 30 room nights per year.
Once the property is turned over, the buyer begins earning dividends. In the end, the quarterly income would offset the payment after a certain period of time.
“We are pushing this condotel concept as this sets us apart from other condo developers,” Magpoc said.
Robles said the company has three operational condo/condotels: two in Mactan and one in Quezon City (La Breza).  Soto Grande in Mactan was the first to operate.
From 60 to 65 percent average last year, occupancy rate has been increasing since January, Magpoc said.
Sta. Lucia Land launched last year Tower 2 of Splendido Tagaytay, which is a condotel, after the success of its Tower One, a pure condo.
This year, Sta, Lucia will open one more condo/condotel in Mactan, two more in Quezon City and one each in Davao and in Iloilo.
Magpoc said Sta. Lucia has had success in selling condos/condotel units to foreigners, especially its Mactan properties. Surprisingly, these units have been selling well to Singaporeans.
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Gov’t refines rules on grant of incentives

Posted on April 29, 2013 10:17:26 PM [ BusinessWorld Online ] 
ENTERPRISES operating in economic zones and freeports seeking to get incentives under the Republic Act 9400, which amended the Bases Conversion and Development Act of 1992 (BCDA Law), must cancel their registrations under other preferential regimes, according to the Finance department.
Department Order (DO) 18-2013, dated April 16 and published in a newspaper yesterday, clarified RA 9400’s implementing rule on the grant of incentives.
Section 12 of the implementing guidelines, issued formally as DO 3-2008 by the Finance department, stipulated that economic zone and freeport enterprises already availing of incentives provided for under RA 9400 shall be disqualified from availing of other incentives and benefits defined or granted under other laws or regulations.
DO 18-2013 amended the section to include this sentence: “Qualified enterprises already enjoying incentives under other preferential regimes should have their registrations thereunder cancelled before they may subsequently avail of the benefits provided under RA 9400.”
RA 9400, signed in April 2007, provides fiscal and non-fiscal incentives to firms in economic zones and freeports managed by the Bases Conversion and Development Authority, such as Subic Special Economic Zone, the Clark Special Economic Zone, and the Clark Freeport Zone, among others.
The perks include a special tax rate of 5% on gross income earned in lieu of national and local taxes and the tax- and duty-free importation of raw materials and capital equipment. Income tax holidays are excluded.
Several incentive-granting agencies aside from the BCDA, however, provide other fiscal and non-fiscal perks other than those granted or defined under the BCDA Law, such as tax credits and exemption from wharfage dues and export taxes and other fees.
RA 9400 stated that firms registered under and granted other incentives by other agencies shall be entitled to the incentives only until the expiration of their contracts that were entered into prior to the effectivity of the law. -- Bettina Faye V. Roc
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Ayala Land to buy Panlilio properties

By Jenniffer B. Austria | Posted on Apr. 27, 2013 at 12:02am |
[ manilastandardtoday.com ]
Ayala Land Inc., the biggest property company, said Friday it agreed to acquire some properties of Boulevard Holdings Properties, a listed hotel and resort developer owned by the Panlilio family.
“The agreement is subject to obtaining the requisite approvals and compliance with other conditions after the conduct of due diligence and related studies,” Ayala Land said in a disclosure to the stock exchange.
Share price of Boulevard jumped 15.5 percent to P0.179 from Thursday’s close of P0.155 apiece after the disclosure. Ayala Land gained 0.6 percent to P31.20.
Boulevard said in a separate disclosure Ayala Land just took a preliminary interest in some of its assets or operating units.
“We wish to emphasize that BHI is intensely involved in the development of its resort chain throughout the country; and thus its landholdings are related to the growth of its high-end Fridays Hotel brand. It is logical to also develop some related resort residences maybe with a counter party or not,” Boulevard said.
The company’s board said it authorized chairman Jose Marcel Panlilio to sign the terms of reference on April 25 and the final agreement on or before May 10.
Boulevard was established in 1994 as a holding company with primary interests in the development of hotels and resorts and tourism-related businesses and investments in strategic land locations and rentable real estate properties.
The company is seeking joint venture partners to develop its 3,000-hectare Puerto Azul property in Ternate, Cavite.
The Puerto Azul property is envisioned to be master-planned resort project, which includes condominiums, hotels, retirement village, golf courses and retail developments.
Boulevard is also the owner and operator of Friday’s Boracay Island Beach Resort in Boracay Island, Aklan, Crown One Land Inc. and Friday’s Puerto Galera Inc.
Ayala Land earlier said it would launch 69 projects this year with total investments of P129 billion, amid a robust growth momentum in the property sector.
Ayala Land allotted P65.5 billion in capital expenditures for the year, which it would use for the completion of ongoing developments and launch new residential and leasing projects.
“For 2013, we have earmarked another P65.5 billion primarily for the completion of ongoing developments and launch of 69 new projects with a combined value of P129 billion, which will help sustain the company’s growth trajectory over the coming years,” Ayala Land chief finance officer Jaime Ysmael earlier said.
The developer spent P71.3 billion last year, including the P22.6-billion initial payment for the acquisition of the 74-hectare Food Terminal Inc. complex.
Ayala Land posted a record profit of P9 billion in 2012, up 27 percent from P7.1 billion recorded in 2011.
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SM readies latest Tagaytay development

Posted on April 28, 2013 09:09:29 PM [ BusinessWorld Online ]
SM LAND, Inc., the property development and management unit of conglomerate SM Investments Corp. (SMIC), is set to open next month its first leisure-oriented development -- dubbed Sky Ranch -- in Tagaytay City.
A VIEW of Taal volcano from the ridge along Aguinaldo Highway -- seen in this photo taken on Nov. 21 last year — remains one of the country’s premier tourist attractions. -- JLC
 “Sky Ranch is targeted for opening by May 2013. It will be a leisure park that will offer the definitive Tagaytay experience to both local and foreign tourists, as well as provide a relaxing family retreat,” SM Land said in SMIC’s 2012 annual report released on Thursday last week.
According to SM Land, Sky Ranch sits on a five-hectare property beside Taal Vista Hotel -- operated by SM Land’s sister firm SM Hotels and Conventions Corp. -- along Aguinaldo Highway and will feature horseback riding facilities, an amusement park, gazebos, restaurants, and a 2,000-square-meter events tent.
The amusement park, which will include a 63-meter high Ferris wheel, will be operated by SM-controlled Family Entertainment Center, Inc., David L. Rafael, SM Land Commercial Properties Group senior vice-president, said in an interview following an SMIC briefing at SMX Convention Center, Pasay City last Thursday.
Upon completion, Sky Ranch will join SMIC’s three other developments in Tagaytay City: Wind Residences, a residential condominium under SM Development Corp.; Tagaytay Highlands, an upscale mountainside residential resort by affiliate Belle Corp.; and Taal Vista Hotel, formerly known as Taal Vista Lodge.
Tagaytay City, a 6,500-hectare, second-class city in the province of Cavite, according to its Web site, is known as the country’s so-called “Second Summer Capital” and is currently a significant tourist hot spot.
“Tagaytay City continues to be one of the major tourist destinations in the country. Apart from the view of Taal Volcano, Tagaytay (City) boasts of various attractions, such as historical landmarks, the Japanese Garden, the Tagaytay Highlands, People’s Park in the Sky, Picnic Grove and Livelihood Complex, and museums (Character Museum and Museo ng Tagaytay),” the city government said in its City Development Strategies report on its Web site.
MORE ON THE WAY
Mr. Rafael said that a sequel development to Sky Ranch could be introduced later this year.
“We are cooking up something. Let’s just say we’re going to do certain formats that the SM Group has not been known for -- small developments, around only one hectare (each) -- but we can’t disclose yet. We could possibly launch one more this year,” Mr. Rafael said, without elaborating.
SM Land, known as Shoemart, Inc. until late 2008, is into property management and construction, as well as commercial and office space leasing. It is the holding company for non-mall, property-related subsidiaries and projects of the SM Group.
SM Land is currently building ThreeE-com Center, a premier office hub in the Mall of Asia Complex in Pasay City, as well as SM Cyber West Avenue, an eight-storey business process outsourcing center at the corner of EDSA and West Avenue in Quezon City.
SMIC, SM Land’s parent, is the listed holding company of the SM Group with interests in shopping mall development, retail merchandising, financial services, real estate development and tourism, as well as hotels and conventions.
SMIC has allotted roughly P65 billion -- a record figure -- for capital spending this year, up from P56.80 billion in 2012, mostly for mall development arm SM Prime Holdings, Inc. and condominium developer SM Development Corp.
Shares of SMIC gained P2.00 or 0.18% to P1,141.00 apiece on Friday last week from P1,139.00 last Thursday. -- Franz Jonathan G. de la Fuente
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