PHILIPPINE REAL ESTATE and RELATED NEWS in and around the country . . .

Hotel Sogo targets to have over 50 branches by 2020

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HOTEL SOGO is expanding its branch network.
HOTEL SOGO aims to have more than 50 hotel branches in the Philippines in 2020, according to its parent company.

Maria Suzette Geminiano, marketing director of Global Comfort Group Corp., said on Monday the company is planning to widen the hotel’s footprint in the country to 55-60 branches by 2020. There are currently 39 Hotel Sogo branches.

While there are plans to expand overseas, she said the company will pursue these after the Philippine expansion.

“Actually, ‘yung [in] 2020, we are really targeting 55 hotels to 60, Philippines lang [only]. May ibang plans for Asia Pacific [There are different plans for Asia Pacific], pero [but] after 2020. We are already strengthening our backbone, ‘yung tinatawag na [the one called] skeletal force… kasi [because] we really want to be available globally, but that will come after,” Ms. Geminiano told BusinessWorld after the company’s press conference at Eurotel Vivaldi in Cubao, Quezon City.

Aside from Hotel Sogo, Global Comfort Group also operates brands such as Icon Hotel and Eurotel.

Among its corporate social responsibility programs is Doctor on Wheels, which was started in late 2015. The company provides medical assistance such as medical consultations, and laboratory examinations.

Ms. Geminiano said more than 5,700 families in provinces such as Iloilo, Bicol, and Cagayan De Oro have benefitted from its Doctor on Wheels program.

“If you want to invite Doctors on Wheels in your barangays… we can accept request from the barangay through our branches nationwide. You can pass the letter of request to the hotel manager… [who] will endorse the letter to us and we will be the one to have it approved in the management,” Joana Balitaan, CSR supervisor of Hotel Sogo, said during the press conference. — Vincent Mariel P. Galang

PHA eyes acquisition of tourism hospitality firms

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PREMIERE Horizon Alliance Corp. (PHA) plans to acquire companies engaged in real estate and tourism hospitality in the next two years, while waiting on the development of its resort project in Palawan. 

In a disclosure to the stock exchange on Wednesday, PHA listed the acquisition of companies as part of the application of proceeds from its 250-million euro or P15-billion funding facility extended by Doha-based firm Sama Global Investments.

The acquisition of firms will provide PHA with short-term and medium-term recurring income while the construction of its Palawan projects is ongoing.

PHA is currently working on the execution of its master plan for Nagtabon beach in Palawan. The company is building two hotels and a four-phased commercial center in the area as part of the project’s initial phase. 

The second phase will include two five-star hotels on two beaches in the 100-hectare North Cove Development. This will be developed in partnership with a global resort brand that is interested in expanding in the Philippines. 

For the third phase, the company is planning a business hotel, as well as a convention center to take advantage of the Meetings, Incentives, Conventions and Exhibitions (MICE) market in Palawan.

The company also plans to immediately implement “organizational strengthening, housekeeping, and subsidiaries consolidation” within the first and second quarter of the year. 

“This is in order to increase company profitability and bolster the management and execution team for sustainable organizational growth,” the company said. 

PHA disclosed details on how it will use the fresh funds to satisfy the inquiries of the Philippine Stock Exchange.

Shares in PHA have been steadily rising since Sama’s investment in the firm was disclosed. On Wednesday, PHA shares closed 0.63% or a centavo higher to P1.59 apiece.

The terms of Sama’s investment in PHA includes having the right to convert the facility, in whole or in part, into ownership of up to 60% in the company, in accordance with the country’s foreign ownership laws and regulations. 

Sama is an investment management firm that seeks to serve a broad spectrum of clients. — Arra B. Francia

Young workforce driving real estate trends

Major trends in the real estate sector are fueled by the expanding population and the changing living and working preferences of the younger age group, real estate services provider Santos Knight Frank (SKF) said on Tuesday.

Santos Knight Frank said the median age of the workforce in the Philippines is the youngest in a group at only 24.3 years, followed by India at 27.9, relatively younger compared to Japan’s over 40.
A work-at-home set-up is hindered by factors such as being prone to distractions and slow internet connection, co-working offers a better environment which allows people to collaborate and share ideas in person. 
Relative to this, the Philippine Statistics Authority in a 2010 census-based projection projected the Philippine population to have grown to 142 million by the year 2045, a 50 million increase in just 35 years. At present, the Philippines has a population of around 106 million.

“It’s generally a concept that’s used towards younger people. What we have seen, people older than the millennials, they tend to go to the service office a bit more. That’s a little more private, sometimes a little bit more upscale, that’s generally been their market. And then the younger they get into the co-working space,” Senior Director of the Occupier Services & Commercial Agency Morgan McGilvray said.

The rise in co-working spaces is one of the eight real estate trends the SKF is seeing this year. According to their data, there are 135 locations in Metro Manila categorized as co-working, serviced and shared offices, most of which are situated in financial districts Makati (38 percent) and Taguig (27 percent).

Property giants Ayala and Robinsons, in particular, ventured into the market with their brands ClockIn and, respectively, owing to the arrival of foreign co-working operators such as WeWork and Common Ground.

Co-working spaces like The Company and iioffice has also pioneered the phenomenon in Cebu, SKF said, adding that international and local operators established in Manila are expected to enter Cebu in a matter of time.

McGilvray said that the co-working, which benefits small firms, self-employed workers or entrepreneurs, has a great market in the Philippines.

“In the near-term, I would expect more occupants to come in, to set up. Eventually they might hold up a little bit and say, okay, do we have enough co-working, do we have too little co-working, maybe we shouldn’t grow quite so quickly, but that wouldn’t be for at least a few years. I think for now, it will continue to grow,” said McGilvray.

Megaworld hikes capex by 8% to P65B

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MEGAWORLD CORP. is allocating P65 billion for capital expenditures (CAPEX) this year, as the property developer continues expanding its residential, office, and mall projects across the country.

In a statement issued on Tuesday, the listed firm said 80% of the capex will be spent on property developments across its 23 townships. Megaworld will use the remaining 20% for land acquisitions and investment properties.

This year’s capital spending is 8.33% higher than the P60 billion it allocated for 2018.

“We are ramping up our residential properties in our portfolio this year as we have seen a remarkable spike in residential demand across our townships, both in Metro Manila and in the provinces,” Megaworld Chief Strategy Officer and Executive Vice-President Kevin Andrew L. Tan said in a statement.

The company led by tycoon Andrew L. Tan said it will launch 28 new residential towers that will generate about P90 billion in sales. These will be developed within existing townships, including The Mactan Newtown in Lapu-Lapu, Cebu; The Upper East in Bacolod; Iloilo Business Park in Mandurriao, Iloilo; and Capital Town in Pampanga, among others.

Meanwhile, Megaworld will also launch five new office towers spanning about 116,000 square meters in gross leasable space. The new offices will be located in Uptown Bonifacio in Taguig, Capital Town in San Fernando, Pampanga, and Westside City in Parañaque City.
The firm also expects to complete five commercial projects covering a GLA of around 9,000 sq.m. within the year, allowing it to add to its portfolio of shopping malls.

“We remain focused on cementing our leadership in the office category by launching more office spaces, and we are looking into opening more lifestyle malls as we keep track of our goal towards P20 billion in rental revenues by next year,” Mr. Tan said.

Megaworld aims to record rental revenues of at least P20 billion annually starting 2020. By that time, total rental space is expected to reach 2.5 million sq.m.

In 2019 alone, Megaworld looks to have 2.14 million sq.m. of leasable properties, about 60% of which will come from office properties.

The company currently has 23 integrated urban townships across the country, consisting of about 700 residential towers, 60 office towers, 17 malls, and nine hotels.

Megaworld booked a net income attributable to the parent of P11.29 billion in the first nine months of 2018, 13% higher year-on-year, while revenues jumped 13% to P41.76 billion.

The firm is part of holding firm Alliance Global Group, Inc., which also has core interests in liquor, gaming, and quick-service restaurants.

Shares in Megaworld were unchanged at P5.29 each at the stock exchange on Tuesday. — Arra B. Francia

POGOs to drive PHL property mart, but challenges seen

By Arra B. Francia, Reporter

REAL ESTATE consultancy JLL Philippines said China’s contributions to the Philippine real estate market are critical, noting how the presence of Philippine Offshore Gaming Operators (POGOs) offset the slowdown of business process outsourcing (BPO) companies’ expansion in 2018.

“We cannot forget that the investment from China is critical to this country at any level, residential, commercial, construction, infrastructure,” JLL Country Head Christophe Vicic during a round table discussion hosted by online real estate marketplace Lamudi in Makati on Tuesday.

“The Chinese money is important to this country, it’s part of the GDP (gross domestic product) growth.”

Mr. Vicic’s statement comes amid the increasing presence of Chinese nationals employed by POGOs in the Manila Bay Area. With more POGOs operating in Metro Manila, their employees have also started occupying nearby residential developments.

While this has caused a surge in demand for residential properties in the Bay Area and nearby business districts, panelists during Lamudi’s round table discussion noted that taking in POGOs as tenants has been challenging.

“It’s true that the POGO employee is not necessarily the most dedicated, most likely don’t speak English….Ultimately you need a certain discipline,” Mr. Vicic said.

For Anchor Land Holdings, Inc. (ALHI) President Digna Elizabeth L. Ventura-Sison, having Chinese tenants means cooperating with POGOs to ensure their workers comply with building rules.

“We’re working closely with the operator and making sure that the property management controls the situation and makes these people follow the rules,” Ms. Ventura-Sison said during the round table discussion.

Mr. Vicic said they are recommending that landlords keep a balanced mix of tenants in their properties, given the challenging nature of POGOs.

“If I were a landlord I would not rely on POGO for a long-term strategy only because it’s highly visible and politically-charged because of the nature of the industry,” he explained, adding that they conduct reference checks of POGO clients in China before taking them in as tenants to assure landlords.

Prices have accordingly risen following the surge in demand for residential projects in the Bay Area. With this, JLL Philippines Head of Research and Consulting Janlo delos Reyes said that local property buyers are being pushed toward the fringes.

“Prices are at around P300,000 per square meter, and that’s comparable to Makati and Bonifacio Global City. What’s happening is the Bay Area is pushing the domestic market away from that community, not only in terms of the sale but also in terms of the rents,” Mr. delos Reyes said.

“The local market is unable to keep up with that kind of pricing. Some of them are being pushed toward the fringes and other areas.”

Lamudi Philippines Chief Executive Officer Bhavna Suresh said that moving toward the provinces will be good for the country in the future.

“The only flip side there is infrastructure needs to catch up, we need to move our offices to these outskirt areas too,” Ms. Suresh said.

AHR pours P1.5 billion into Astoria Palawan

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Astoria Palawan
Astoria Palawan expects to attract more tourists this year, after it added new rooms and a waterpark. -- COURTESY OF ASTORIA HOTELS & RESORTS
Astoria Hotels & Resorts (AHR) has spent P1.5 billion so far for the on-going development of Astoria Palawan in Puerto Princesa City.

In a statement, the local hotel chain said the funds were used to expand Astoria Palawan’s villas, food and beverage outlets, and its waterpark.

Astoria Palawan added 30 new premier villas that have access to the Sulu Sea beachfront, which brings to 146 the eco-resort’s total number of rooms. The company has once again partnered with Cebu-based architect Ed Gallego, and with interior design firm Atelier Almario for the design of the villas.

A new food and beverage outlet, The Pavilion, is set to open within the first quarter.

Palawan Waterpark by Astoria now features a wave pool, water slides, and a lazy river, among others.

“This investment is proof of our belief in the continued growth of foreign tourists, our commitment to develop the countryside as part of our nation building efforts, and to make a positive impact on human capital by providing avenues for gainful employment to our fellow Filipinos,” Jeffrey T. Ng, president of AHR, said in a statement.

Mr. Ng noted Palawan is expected to attract more tourists after being named by New York-based magazine Travel + Leisure as the “World’s Best Island” in 2017, while Puerto Princesa’s Underground River was included in the New 7 Wonders of Nature in 2011.

As part of its corporate social responsibility projects, Astoria Palawan recently hosted a Sikap Pinoy event on financial education for farmers and fisherfolk. The hotel also directly buys fresh catch of fishermen and vegetables from local farmers at fair prices.

“By investing and building relationships with the local community, in the end we deliver outstanding experiences for our guests at Astoria Palawan,” Mr. Ng said.

AHR has eight properties in top destinations in Metro Manila, Palawan, and Boracay. — Vincent Mariel P. Galang

Growing logistics sector provides opportunities for property firms

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CentralHub Tarlac
CentralHub Industrial Centers Inc. completed the CentralHub prototype in Tarlac last year.
By Vincent Mariel P. Galang
PHILIPPINE PROPERTY developers should advantage of the continued growth of the logistics sector this year.

During a panel discussion for the 2019 report of the Emerging Trends in Real Estate for Asia Pacific on January 16, Raoul A. Villegas, executive director for deals and corporate finance of PricewaterhouseCoopers (PwC), said the logistics sector is projected to grow by 20% to 25% this year.

“I am also very bullish about logistics, particularly how it relates to warehousing, but more specifically is cold storage warehousing. The reason why cold storage warehousing is very significant it’s because our country lacks a viable cold chain… and that’s one of the reasons why the food that comes to the market is more expensive than… in other cities,” he noted during the discussion.

DoubleDragon Properties Corp. Chief Investment Officer Hannah Yulo noted there is no major player in the industrial warehouse sector, which is why DoubleDragon is planning to build a chain of industrial complexes around the country.

“Cold storage facilities… those are one of our ideal locators for CentralHubs. So, our CentralHub warehouses, these are actually meant for… cold storage, light manufacturing, e-commerce facilities, and other logistics centers… There is no really major player… in the industrial warehouse space. A lot of these warehouses you see today are very segmented, so… you’ll have to talk to so many landlords… for their warehouse facilities,” she said during the panel discussion.

“That’s really what we are trying to consolidate this type of businesses,” she added.

DoubleDragon entered the industrial leasing business when it set up CentralHub Industrial Centers, Inc. It currently has two CentralHubs in Tarlac and Iloilo City. DoubleDragon aims to have eight CentralHub sites by 2020, with two each in North Luzon, South Luzon, Visayas, and Mindanao.

“I am very, very bullish particularly in the industrial warehouse sector… we want to get to about 100,000 square meters (sq.m.)… in particular, if you noticed in the Philippines, it is actually an emerging trend. Everywhere else in Asia, it’s an established sector, but in the Philippines, it seems to have been forgotten,” Ms. Yulo said.

“We in DoubleDragon are very bullish about this sector. We want to be the largest in the Philippines to provide this kind of facility especially with the emerging e-commerce sector,” she added.

Developers should also consider expanding into dormitories catering to students and workers.

“Great thing about this population (Philippine population), not only is it… a consuming population there is also a working population, so that is going to be contributing to our economic output… our population is replenishing itself unlike other countries, for example Japan… where populations are shrinking,” Mr. Villegas noted. “Because of the traffic, the demand is going to increase.”

Philippines Urban Living Solutions, Inc. (PULS) operates a chain of dormitories under the brand name MyTown. Property giant Ayala Land, Inc. (ALI) also opened The Flats Amorsolo, which features co-living spaces catering to young professionals, in Makati City.
Tourism projects are also being pursued by many property firms.

Augusto Cesar D. Bengzon, chief financial officer of Ayala Land, Inc. (ALI), said the company is expanding its footprint in the tourism sector to take advantage of the boom in domestic travel.

“We’re quite bullish on the tourism sector. When we put up our own hotel brand eight years ago, we were originally thinking about Seda, which is the brand that would cater to the foreign tourists… but I think the bigger number that the people do not see is the number of domestic tourists… 95 million domestic tourists. We’re seeing that in our hotels during the weekdays… we all know about ‘staycation’ phenomenon and that’s being driven by local tourists… and we expect domestic tourists to continue to rise,” Mr. Bengzon said.

Seda is a hotel brand under Ayala Land Hotel and Resorts Corp, (AHRC), subsidiary of Ayala Land, Inc. (ALI). It is currently present in Bonifacio Global City, Cagayan de Oro, Davao City, Nuvali in Laguna, Iloilo, Quezon City, Bacolod, Cebu, and Palawan.

Mr. Bengzon also shared ALI’s vision for sustainable tourism. The property giant is undertaking an aggressive carbon-neutral program that will offset the projected 490,000 tons of carbon emissions from its commercial properties by 2022.

Megaworld to sell office spaces in Cavite township

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MAPLE GROVE is envisioned as a “green” central business district in General Trias, Cavite. — MEGAWORLD
MEGAWORLD Corp. expects to generate P1.5 billion from the sale of office spaces at a building within its Maple Grove township in General Trias, Cavite.

In a statement on Monday, the listed property developer said it is selling 93 office units at the 17-storey One Corporate Place. Units, which are sized from 63 square meters (sq.m.) to 281 sq.m., can cater to business process outsourcing (BPO) companies, and small and medium enterprises (SME).

“Maple Grove’s rising business district in this side of Cavite allows companies to thrive and grow their businesses in a green and sustainable community where everything is integrated and within reach. The entire development itself, as in any other townships that we’ve already built, will be walkable from one office tower to another, or to the mall, residential towers and parks that we will build around the community,” Mary Rachelle I. Peñaflorida, vice-president for sales and marketing of Megaworld, was quoted as saying.

Megaworld is developing the 140-hectare Maple Grove township as Cavite’s “green” central business district.

Ms. Peñaflorida noted rental prices in the area are projected to rise as more buildings sprout up in Maple Grove.

“Owning an office space in Maple Grove would be a wise move especially that General Trias is now fast becoming a key growth area of Cavite. In five years, we expect rental prices to go up as more developments rise within the township,” she said.

One Corporate Plaza has its own Building Management System (BMS), 24-hour security and fire command center, seismic detection and monitoring system, stand-by generators for full back-up for power, fire security system, water reservoir with separate water tanks in case of fire, and a 24-hour closed-circuit television (CCTV) monitoring system. The building is also fiber optic ready.

The building will use light-emitting diode (LED) lights in common areas, and dual-flush types for common restrooms. It also has its own materials recovery facility for waste segregation and recycling.

Last October 2018, Megaworld launched The Verdin at the Maple Grove, its first 10-storey residential condominium inside the township. It also unveiled plans for Maple Grove Commercial District, a 35-hectare “Makati-inspired” business district.

Maple Grove will also have its own lifestyle mall, commercial centers, and office towers.
The property developer reported an 11% rise in attributable profit to P9.98 billion during the first nine months of 2018, driven by a 5% jump in consolidated revenues to P37.1 billion. — Vincent Mariel P. Galang

Permit processing needs streamlining say housing developers

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THE processing of permits for low-cost housing projects should be streamlined in order to attract more developers to venture into the sector, said Jefferson S. Bongat, president of the Organization of Socialized and Economic Housing Developers of the Philippines Inc. (OSHDP), during a forum on “Addressing Socialized and Economic Housing Challenges,” on Thursday.

Seventy permits with more than 200 signatures are needed in order to start a project, he said, citing the latest study that OSHDP conducted with the Center for Housing and Independent Research Synergies, Inc. (CHAIRS).

“It’s highly regulated. You go to different agencies like DAR (Department of Agrarian Reform), DENR (Department of Environment and Natural Resources), even in some areas you need to go get clearances from… Phivolcs (Philippine Institute of Volcanology and Seismology), so our main concern now is that because real estate is becoming popular for the last few years… we felt last year that there is an overreaction of regulating the industry,” Mr. Bongat told BusinessWorld after the forum.

Marcelino C. Mendoza, chairman of the board of OSHDP agreed with Mr. Bongat and noted that there are developers who think that developing housing projects is a very complicated business.

“Ang tingin nila ngayon sa housing [The way they see housing], is [it is] a very complicated business. A lot of developers would rather go into high-rise (developments) not housing, not horizontal housing,” Mr. Mendoza told BusinessWorld.

“We want really that ease of doing business should be improved a lot in housing permitting because there are a lot of permits. There are a lot of government agencies that you have to go [to],” he said.

The government could simplify the process as some permits are redundant, said Mr. Bongat, and this should be done before the bill creating the Department of Human Settlement and Urban Development (DHSUD) is signed by the president, he noted.

“As we mentioned… we need to close to 70 permits and clearances, and 270 plus signatures. Sana ma-reduce yun…. Some permits can be eliminated already because some of them are really redundant permits,” he said during the interview.

“We are hoping now, together with the CHAIRS, and together with HUDCC (Housing and Urban Development Coordinating Council) [that] before magkaroon ng [there is a] department… this issue would be addressed because may [there is] concern [that with a new] department baka bumagal lahat ’yung [there could be a slowdown in] approval nung mga [of the] permits, unlike before it’s regional based. So it’s a big concern talaga na [really since] those delays in those permits attributed a lot of costs… kaya talagang nagmamahal yung housing projects [that is why housing projects become more expensive],” he said during the forum.

The bill creating the DHSUD was transmitted to the Palace on Jan. 16 and is awaiting the signature of President Rodrigo R. Duterte. This department “shall act as the primary national government entity responsible for management of housing, human settlement, and urban development.”

“It’s not just providing a house kasi [because] building a house is the easiest part. Crafting the program, financing, targeting beneficiaries… doon na dapat magfocus [these should now be given focus],” Mr. Bongat noted in the interview. — Bamba Galang

China Railway unit tapped to build $3.7-billion Makati City subway

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PHILIPPINE Infradev Holdings, Inc. (formerly IRC Properties, Inc.) has inked a deal with China Civil Engineering Construction Corp. (CCECC) for its $3.7-billion Makati City Subway Project.

In a disclosure to the stock exchange on Thursday, the Antonio L. Tiu-led firm said it entered a memorandum of agreement (MoA) with the Chinese firm. The two companies target to complete the due diligence process by May 31 before its execution of the investment agreement.

“The Company… has executed a binding MoA with CCECC, a 100% owned subsidiary of China Railway Construction Corp., in connection with the Makati City Subway PPP (public-private partnership) Project of the Company,” it said.

The MoA indicated CCECC will invest $300 million to $350 million in Philippine Infradev or its subsidiary; and undertake the engineering, procurement and construction works for the Makati Subway Project. 

It will also “provide completion performance guarantee for the completion of the Makati Subway Project… subject to, among others, the completion of a financial, legal and technical due diligence.”

Last December, Philippine Infradev started preparatory works on the Makati Subway Project, which aims to build a 10-kilometer intracity railway system in the business district.

The Makati City government awarded the project to the consortium of Philippine Infradev and Chinese firms Greenland Holdings Group, Jiangsu Provincial Construction Group Co. Ltd., Holdings Ltd. and China Harbour Engineering Company Ltd. The 30-year concession agreement is scheduled to be signed this year.

The railway is targeted to open by 2025, and will connect Ayala Avenue to Ospital ng Makati through an underground mass transport system. It is expected to benefit around 700,000 passengers every day.

Shares in Philippine Infradev jumped 8% or 18 centavos to close at P2.42 each. — Denise A. Valdez

Maynilad allots P100 billion for capex budget until 2022

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MAYNILAD Water Services, Inc. targets to achieve 100% sewerage coverage by the end of its concession in 2037. — MAYNILAD WATER SERVICES, INC.
By Victor V. Saulon, Sub-editor

MAYNILAD Water Services, Inc. is setting aside P100 billion as capital expenditure in five years through 2022, or the period covering its fifth rate rebasing, of which more than a quarter will cover the construction of new sewage treatment plants (STPs).

“The P100 billion for five years includes the roughly P40 billion of wastewater plant and conveyance,” Maynilad President and Chief Executive Officer Ramoncito S. Fernandez told reporters, adding that the budget includes installation of underground pipes.

“The other ones are for water treatment plant — tinatayo pa (under construction) — ‘tsaka (and) reservoir para ma-improve ‘yung (to improve the) [water] pressure ‘tsaka (and) pipe replacement para bumaba ‘yung (to reduce the) non-revenue water, plus the automation,” he added.

Mr. Fernandez disclosed the company’s five-year budget during the inauguration of its new sewage treatment plant in Parañaque on Thursday.

“We have internally generated funds, we have loans,” he said. “We’re still not borrowing too much.”

Company officials said Metro Manila’s west zone concessionaire is investing P26.4 billion in five years to build new STPs and lay sewer lines in Caloocan, Las Piñas, Muntinlupa and Kawit, Cavite. For this year alone, the company is investing P11.4 billion for wastewater projects.

The new facilities will have a combined treatment capacity of 320 million liters per day (MLD). They are expected to remove harmful substances from the wastewater generated by more than two million Maynilad customers, helping reduce the pollution going into water bodies.

Of the P26.4 billion, about P16.3 billion will be spent to install around 241 kilometers of new sewer lines, which will convey wastewater from households to Maynilad’s new STPs for treatment.

Once completed in 2021, the new facilities will expand the company’s sewerage coverage to 47% from only 6% in 2006 before Maynilad was re-privatized.

The company targets to achieve 100% sewerage coverage by the end of its concession in 2037. It has a customer base of 1,407,503 service connections.

Mr. Fernandez said Maynilad had so far invested P23.3 billion to improve the wastewater infrastructure and expand the coverage in the west zone since 2007. He said by sustaining its investments in wastewater projects, the company is doing its part in the clean up and rehabilitation of Manila Bay.

Maynilad’s concession area covers a total of 540 square kilometers. The company operates and maintains three water treatment plants, 22 wastewater plants and 28 pumping stations, 32 reservoirs, eight mini-boosters, and 30 online boosters. It has installed a total of 7,691 kilometers of water pipelines.

The new STP in Parañaque was build at a cost of P1.7 billion was funded by the Japan International Cooperation Agency through the Development Bank of the Philippines. It can treat up to 76,000 million liters of wastewater per day and serve about 500,000 Maynilad customers in the city.

At present, Maynilad is constructing other STPs in Valenzuela, Cavite City, and Tunasan and Cupang in Muntinlupa.

Metro Pacific Investments Corp., which has majority stake in Maynilad, is one of three Philippine units of Hong Kong-based First Pacific Co. Ltd., the others being Philex Mining Corp. and PLDT, Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has interest in BusinessWorld through the Philippine Star Group, which it controls.

Amaia Land set to launch 5 new projects

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AMAIA LAND Corp. offers “affordable yet superior quality” housing projects. — AMAIA LAND CORP.
THE economic housing unit of Ayala Land, Inc. (ALI) on Thursday said it is launching five residential developments this year, alongside the expansion of eight existing projects.

In a statement on Thursday, Amaia Land Corp. said it is introducing two townhouse projects within ALI’s mixed-use developments Vermosa Estate in Cavite and Nuvali in Sta. Rosa, Laguna, as well as a building in Capitol Central in Bacolod City, Negros Occidental.

Amaia Land is also developing a house-and-lot community in Binangonan, Rizal, and a condominium in Tandang Sora, Quirino Highway.

“With the launch of these new projects, individuals and families alike may now look forward to settling down in their dream homes in ‘greener, more breathable’ neighborhoods in low-density locales in the metro,” Stephanie J. Lingad, chief operating officer of Amaia Land, was quoted as saying in the statement.

The property company is also expanding eight existing developments in Sucat and Bicutan in Parañaque; General Trias and Trece Martires in Cavite; Novaliches in Quezon City; Cabuyao, Laguna; Bulacan; and Shaw Boulevard in Mandaluyong City.

In an e-mail to BusinessWorld, an Amaia Land representative said the company targets to build 4,301 units this year, while 5,301 units are expected to be turned over to its owners. — Vincent Mariel P. Galang

NLEX aims to complete 4 projects this year

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NLEX Corp. is hoping to complete four projects this year after the opening of North Luzon Expressway (NLEx) Harbor Link Segment 10 was delayed. 

In a statement late Tuesday, the operator of NLEx and Subic Clark Tarlac Expressway (SCTEx) said it expects at least four projects to be finished by 2019: additional SCTEx toll lanes in San Fernando, Mexico, and Angeles; expanded connecting ramps of NLEx-SCTEx; a new NLEX Drive & Dine service facility; and the NLEx Harbor Link Segment 10.

“Continuous improvement, whether in infrastructure or service, has been and will always be our focus. 2019 will be even better for everyone as big-ticket projects are set for completion this year,” Metro Pacific Tollways Corporation (MPTC) President and Chief Executive Officer Rodrigo E. Franco said in the statement.

MPTC is the holding company of NLEX Corp., and the tollways unit of Metro Pacific Investments Corp. (MPIC).

Last week, the Department of Public Works and Highways (DPWH) said the main line of the NLEx Harbor Link Segment 10 is seen to launch this month, which will connect Karuhatan in Valenzuela City to C3 road in Caloocan City. It is designed to also have a spur road from C3 to Radial Road 10 (R-10) in Navotas City.

NLEX Corp. reported it was able to finish more than 20 projects in 2018, most notable are the new Mabiga Interchange in SCTEx, Sta. Ines-Magalang Exit in NLEx, and the additional lane in San Fernando Interchange Northbound Exit in Pampanga. 

“2018 was a productive year for us as we were able to build more roads that helped us provide travel convenience and establish stronger relationships with our stakeholders,” Mr. Franco was quoted as saying.

MPIC is one of three key Philippine units of Hong Kong-based First Pacific Co. Ltd., the others being Philex Mining Corp. and PLDT, Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls. — Denise A. Valdez

SM to open 4 new malls

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SM Prime Holdings, Inc. is planning to open new malls in the provinces.
By Arra B. Francia, Reporter

SM Prime Holdings, Inc. plans to open four malls in the provinces this year, while ramping up its land banking efforts for the development of more lifestyle cities in the future.

In a presentation posted on its website Wednesday, SM Prime said it will open SM Center Dagupan, SM City Olongapo Central, SM City Butuan, and SM Mindpro Citimall in Zamboanga City in 2019.

The new malls will have a combined gross floor area (GFA) of 179,000 square meters (sq.m.), bringing SM Prime’s shopping mall count to 76 in the Philippines and seven in China.

The Sy-led firm will also be expanding SM City Baguio and SM City Fairview, adding about 46,000 sq.m. and 32,000 sq.m. in GFA, respectively.

The company noted that its new malls will be located in the provinces moving forward, as part of its strategy to take advantage of the economic growth in the regions.

“SM Prime’s mall expansion is geared toward the provinces. The focus is to cover most of Northern Luzon, Visayas, and the progressive cities in Mindanao,” the company said.

The company’s malls in Metro Manila currently account for 42% of its GFA, 37% comes from Luzon, while 13% and 8% are in Visayas and Mindanao, respectively.

Meanwhile, the firm does not have any new malls lined up in China this year, where it operates seven malls covering a GFA of 1.3 million sq.m. It noted, however, that future expansion plans will focus in Fujian province.

Combined with its malls in China, SM Prime aims to end the year with 10.5 million sq.m. in GFA, nine percent higher year-on-year.

Meanwhile, SM Development Corp. (SMDC) looks to end the year with 72 projects, which will increase its sales by 10% to 21,145 units year-on-year.

Majority of SMDC’s land bank is in the provinces, at 432 hectares, compared to only 82 hectares in Metro Manila.

SM Prime’s leisure homes unit meanwhile has six projects in the pipeline this year, bringing its total number of units to 351, 32% higher year-on-year. Its land bank covers 542 hectares in the provinces.

“(We will) increase acquisition of large-scale strategic land bank to develop more lifestyle cities,” the company listed as one of its key strategies for the year, adding that leisure projects are for medium-term development.

For its commercial segment, SM Prime looks to end the year with 681,000 sq.m. across nine towers.

The hotel business will also be launching two new projects for the year, bringing its room count to 2,049.

“Our expansion program should allow us to sustain double-digit income growth over the next three years. The growth will be driven by malls and residential operations complemented by our other businesses,” the company said.

SM Prime booked a net income attributable to the parent of P23.44 billion in the first nine months of 2018, 17% higher year-on-year. Gross revenues meanwhile jumped by 15% to P74.56 billion.

Shares in SM Prime gained 0.63% or 25 centavos to close at P39.70 each at the stock exchange on Wednesday.

RLC ventures into flexible workspaces

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ROBINSONS Land Corp. opened its flexible workspace hub in Cyberscape Gamma in Ortigas Center, Pasig. — ROBINSONS LAND CORP.
By Vincent Mariel P. Galang

ROBINSONS Land Corp. (RLC) is entering the flexible workspace segment with the launch of its own brand

In a statement on Tuesday, the Gokongwei-led property developer said its first flexible workspace, which spans 1,100 square meters (sq.m.), is located at Cyberscape Gamma building in Ortigas Center, Pasig.

The first facility had its soft opening in December 2018, but RLC is already planning to launch two to three hubs every year.

With its Scandinavian and industrial design elements, RLC expects its shared working space to attract start-ups, freelancers, and firms looking for extra space.

Kaye Sanchez, vice-president for business development and marketing — office buildings division of RLC, said’s edge over competitors is its location on the ground floor of Cyberscape Gamma building.

“Location! We are the first to locate in a ground floor space right in the heart of Ortigas central business district, while our private offices are at the penthouse of the prime office building,” Ms. Sanchez told BusinessWorld via e-mail.

The private offices, which include up to 6-desk suites, are located on the 37th floor of the Cyberscape Gamma. The private office space has a total capacity of 131 seats.

Rates at start at P250 for half a day up to P11,000 a month. The rate includes unlimited coffee and infused water, and free Wi-Fi.

For those who will lease a private office space for at least 30 days, there are additional perks such as mail and package handling service, the use of a business address, meeting room hour credits plus printing, photocopying and scanning credits, among others.

The hub also has a 200-sq.m. common area, a self-service bar with coffee machines and infused water, four meeting rooms and an events space that can accommodate up to 40 people.

“At, a dedicated Community Manager and Community Associate are also around to help you connect with people who might give your business a boost, or vice versa. members have the opportunity to attend events, talks, and seminars where they can socialize, establish connections, and plan collaborations with other members,” the company said.

Operating hours are from 8 a.m. to 7 p.m. from Monday to Friday.

Filinvest-JG consortium inks O&M deal for Clark

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A NEW passenger terminal is being built at Clark International Airport in Pampanga.
THE North Luzon Airport Consortium (NLAC), which includes companies owned by the Gokongwei and Gotianun families, on Tuesday signed concession agreement to operate and maintain the Clark International Airport for 25 years.

In separate disclosures, Filinvest Development Corp. and JG Summit Holdings, Inc. said NLAC inked the deal with the Bases Conversion and Development Authority (BCDA) at the Shangri-La at The Fort in Bonifacio Global City, Taguig City.

Aside from Filinvest and JG Summit, NLAC also includes Philippine Airport Ground Support Solutions, Inc.; (PAGSSI) and Changi Airports Philippines (I) Pte. Ltd., a wholly owned subsidiary of Singapore’s Changi Airports International (CAI).

Under the contract, the consortium will “develop the commercial assets, operate and maintain project facilities and fit-out the new terminal in Clark.”

NLAC was named the winner of the O&M (operations and maintenance) auction conducted by the BCDA on Dec. 20, after its bid was the only one that qualified. The consortium committed in its financial bid to give 18.25% share of the annual gross revenue from the airport to the government, well above the required minimum of 10%.

BCDA Special Bids and Awards Committee (SBAC) Chairperson Joshua M. Bingcang said in November he wants the winning O&M contractor to start taking over before the new passenger terminal finishes construction, which is being built by Megawide Construction Corp. and GMR Infrastructure Ltd. It is scheduled to be completed in 2020.

“We don’t want the building to be completed and then the incoming operator will say that’s not what we want. So we want them to be part of the construction stage,” he said then.

Aside from NLAC, another group initially joined the O&M bidding — the X-Droid Consortium comprised of Indonesia’s Angkasa Pura II; Michael L. Romero’s Globalport 900, Inc.; Alfredo M. Yao’s Mazy’s Capital, Inc.; and Desco, Inc.

Mr. Bingcang said X-Droid Consortium failed to advance in the bidding after BCDA found deficiencies in its qualification documents, leaving NLAC as the sole bidder.

Filinvest and JG Summit also submitted a separate P839-billion unsolicited proposal for the Clark International Airport early last year. This was rejected because of the government’s intention to hold an auction for the O&M contract instead. — Denise A. Valdez

Will housing department help address backlog?

housing NHA
The housing backlog is expected to hit 6.8 million units by 2022. -- HTTP://WWW.NHA.GOV.PH/
By Vincent Mariel P. Galang
HOUSING, particularly for low-income households, remains a big problem in the Philippines.

Data from the National Economic and Development Authority (NEDA) showed the housing backlog will reach 6.80 million units by 2022, including the backlog of 2 million units as of Dec. 31, 2016.

A 2016 study by the University of Asia and the Pacific showed the Philippines would need 12.3 million housing units by 2030, from an estimated backlog of 6.7 million from 2001 to 2015 plus a projected housing demand of 5.6 million from 2016 to 2030.

For legislators, the solution to the housing backlog is the creation of the Department of Human Settlements and Urban Development (DHSUD), which will “shall act as the primary national government entity responsible for the management of housing, human settlement, and urban development.”

Congress approved the measure creating the new department, which would merge the Housing and Urban Development Coordinating Council (HUDCC) and the Housing and Land Use Regulatory Board (HLURB), and take over the two agencies’ functions.

After being approved by both chambers last November, the bicameral report on the DHSUD was forwarded to Malacañang last Jan. 16 for President Rodrigo R. Duterte’s signature.

Senator Joseph Victor G. Ejercito, chairman of the Senate committee on urban planning, housing and resettlement, said the new department addresses the problem having divided agencies under the HUDCC.

In an email interview last Nov. 15, Mr. Ejercito said the HUDCC “lacks the mandate and organizational setup to manage a National Urban and Shelter Policy and administrative and technical supervision of the attached housing agencies, as well as to solve the current mass of housing and urban development issues.” He noted the HUDCC only takes note of the activities done by key shelter agencies (KSA).

“We need one housing department and working towards one direction, creating the roadmap for housing and urban development, leading its implementation, setting the general direction for everyone, and able to follow through each and every project with clear functions, policies, budget and financing,” Mr. Ejercito said.

Angelito F. Aguila, HUDCC director for policy development, legislation, and special projects group, said through the department, the government will be able to control and supervise all programs and projects for housing.

“Before, the HUDCC only coordinates. It monitors (the projects), but we have no direct control and supervision,” he said in an interview on December 3.

Mr. Aguila also said being a council, the HUDCC still has to coordinate their actions with different relevant departments, which slows down the delivery of the housing units.
As for the HLURB, he said it only determines the general guidelines for land use planning of the different local government units and ensures the compliance of the different subdivision and condominium developers.
“The supervisory and the control over the KSAs is weak, just coordinating and monitoring. Not controlling and supervision, which will now be the role of the new department,” Mr. Aguila added.
Mr. Ejercito also noted that having a single housing department will eliminate red tape.

“The separation of HUDCC and HLURB can be considered a layer of red tape. Not only do we eliminate this through the DHSUD, merging the coordinating function of HUDCC with the land use planning and regulation of HLURB we are finally integrating into one body the concepts of housing and urban development, eliminating the conceptual disconnect that adversely affects government housing projects,” the senator said.

For Bayan Muna Representative Carlos Isagani T. Zarate, there is no need for the establishment of a new housing department, saying it will only worsen the problem it is supposed to address.

In an email interview on Nov. 8, Mr. Zarate said the measure “prescribes the privatization of housing services, relegating the role of the government to provide adequate, decent, affordable, public mass housing to the business sector” leading the socialized service to commercialization, profiteering, and racketeering.

“Private sector housing costs are way beyond what the low-salaried can afford, how much more for the poor?… The proposal to resurrect the creation of the Department of Human Settlements and Urban Development will only worsen the housing crisis,” Mr. Zarate said.

Under the measure creating the DHSUD, the department will facilitate participation of local government partnerships, civil society organizations, non-government organizations, and private groups. The DHSUD will also enter into public-private partnerships and memoranda of agreement or understanding with foreign or domestic groups.

Mr. Zarate also expressed concern with the decreasing budget for housing, noting this is an effect of the government’s increasing partnerships with private developers.

He cited data from HUDCC that showed the national budget for housing plunged to P4.7 billion this year from P15.31-billion in 2017.

To support this, Mr. Zarate cited a comparative analysis done by Ibon Foundation, Inc. of the 2018 National Expenditure Program (NEP) and the 2017 national budget. Ibon Foundation’s analysis showed the combined budget of the six key shelter agencies, which include HUDCC, HLURB, Home Guaranty Corp. (HGC), National Housing Authority (NHA), National Home Mortgage Finance Corporation (NHMFC), and Social Housing Finance Corp. (SHFC), plunged by 70.2% to P4.4 billion in 2018 from P14.8 billion in 2017.

When asked about the dwindling budget for housing, HUDCC’s Mr. Aguila said the new department will have bigger budget allocations next year.

“In terms of budget… because of the bigger mandates, we will have bigger budget allocations. Not just combined, but there are additional mandates also…. Which would entitle us to claim for bigger budget,” he said.

An additional mandate for the DHSUD, Mr. Aguila said, is that the department will acquire land or properties that will be needed for housing projects.

Mr. Aguila also noted the department is aiming to increase annual housing production from 170,000 units to 250,000 units to reach a total of 1.5-million housing units by 2022.

“The usual average house production of the government is about 170,000 per year. We are increasing that to at least 250,000 a year, so that by 2022 (we will have) 1.5 million housing units… The other side of it, the private sector, will be the one to produce also. The duty of the government is to provide a good environment, regulatory environment to encourage them to produce more houses,” he said.
“(The housing backlog) cannot be answered by 2022, but for now, the task of the government is really to increase our production,” he added.
The Subdivision and Housing Developers Association, Inc. (SHDA), an organization of private housing developers, is supportive of the creation of the DHSUD.
“The moment the Department of Human Settlements and Urban Development Act of 2017 is signed into law, this country needs to kick off a massive program of the urban renewal and as the largest organization of residential developers, we will be ready to work hand in hand with the government,” Jeffrey T. Ng, national president of SHDA and president of Cathay Land, said in a statement.

“If we now have a department that is responsible for housing and urban development, we could now begin urban renewal and slum upgrading programs, which will be a key strategy to encourage housing delivery and improve living condition of Filipinos,” SHDA Chairman and 8990 Holdings President and Chief Executive Officer Willibaldo J. Uy said in the same statement.

For Mr. Zarate, to solve the housing problem the government should address the roots of the issue.

“Government must then perform its role to provide its people of their social and economic rights. Ensure decent wages, free distribution of land to the tillers, work towards national industrialization, social protection for the marginalized, among others,” the Bayan Muna representative said.

The government must also prioritize funding for affordable, decent, public mass housing for the poor.

“Even on the issue of budget prioritization alone, we can readily see that the solution to our mass housing problem is mere illusory. The proposed collective budget for the KSAs does not meet even 1% of the annual budget needed to address the current housing backlog,” Mr. Zarate said.

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