Posted on April 13, 2015 10:27:00 PM
AYALA Land, Inc. is keen to build township projects in 25 additional Philippine cities over three to five years, part of a rush by the country’s property developers to capitalize on widening economic growth and offset a slump in condominium sales in Manila.
With sales of new residential units in Manila having slumped 40% in the past two years, according to property broker Colliers International, growing demand in provinces for large-scale projects that include condominiums, malls and offices has come at a fortuitous time for developers like Ayala and Megaworld Corp.
Ayala Chief Executive Officer Bernard Vincent O. Dy told Reuters that new projects would come on top of those in 45 cities nationwide.
Urban centers outside Manila accounted for a third of net profit in 2014, up from barely a fifth in 2009.
“The economy is expanding at 6%-7% annually, and that’s not just in Metro Manila because it’s spread out all over the country. If there’s good growth… in a particular region, it’s an area we would be interested in,” Mr. Dy said on the sidelines of a shareholders meeting last week.
Growth in provincial townships as well as robust condominium sales in Manila have helped Ayala and Megaworld notch up record earnings every year since 2009. Ayala expects sales and income to climb 20% annually to 2020, while Megaworld is targeting double-digit revenue growth this year.
Mixed-use projects outside the capital have risen to account for 15% of Megaworld’s revenue from zero in 2011 and the company wants this climb to about a third of revenue in three to five years, Company Senior Vice-President Jericho Go said last week.
SM Prime Holdings, Inc., owned by the country’s richest man Henry Sy, Sr. also plans to build hotels, as well as office and residential towers near its sprawling shopping malls in provinces such as Cebu in central Philippines. -- Reuters