Online platform makes it easier to buy, sell, and lease properties

January 28, 2020 | 12:04 am [ bworldonline.com ]

By Adrian Paul B. Conoza

Special Features Writer

PROPERTYACCESS Philippines recently launched its own online platform that aims to make buying, selling, and leasing real estate properties easier for Filipinos.

Founded in 2018 by real estate experts Hiroki Kazato and Shiela Baylon, PropertyAccess provides users with real estate multi-listings, intelligent data, and analysis. It also serves to connect real estate developers, agents, institutional/retail buyers and sellers, landlords, and tenants across Southeast Asia. Aside from the online platform, PropertyAccess’ businesses include consultancy, transactions, and events.

Mr. Kazato, chief executive officer of PropertyAccess, said the company was founded with the vision of “elevating the real estate experience through transparency of information and accessibility to a wider market.”

According Mr. Kazato, the “immense growth potential” foreseen in the Philippine market, with the country as one of PropertyAccess’ top market for transactions, pushed the company to build the PropertyAccess Philippines platform.

“With this website, property buyers will be able to access properties [easily]. At the same time, they will be able to look through key information and data that some websites and portals failed to provide,” Mr. Kazato said during the launch event in Makati City.

Ms. Baylon, chief revenue and partnership officer of PropertyAccess, said the main focus of PropertyAccess was to act as a bridge for Japanese investors interested in the Philippine market. Now, she said the company hopes to further tap into the Philippine market with this newly-launched platform.

“The Japanese [market] is using it. However, we also want the Filipinos to [use] it, and we want to make it more friendly too,” she said.

Modeled after innovative websites from leading markets in the region such as Singapore and Australia, the newly designed website has a new user interface that makes the platform easy to understand.

Not only is the website designed with the Filipino market in mind, but it also aims to bring real estate investment closer to a younger demographic.

“One of our goals is to bridge the gap between real estate and the younger generations,” Alyssa Narvasa, the company’s head of product, said while presenting the new website.

She added that with this new website, PropertyAccess wants to show Filipinos that real estate is not a scary venture, but rather a practical and sound investment. “We’re here to serve as a transactional environment that is safe, legitimate, intelligent, and credible,” she said.

The website’s home page has a search bar that conveniently guides users on what to look for based on their preferences. Featured listings are located underneath, while location tags are also provided below for users who prefer to search based on area. Tailored searches can be made through the website’s various search pages.

Overviews of every search result can be accessed without extra steps. By clicking on a listing, a comprehensive profile of the property can be viewed, together with vital information such as the price, size, description, details, location, and even the listing agent.

A key addition to the website is its Affordability Calculator, designed to make searching for properties less intimidating, especially for first-time buyers. It provides the expected monthly expense of a desired property based on the information given by the user.

“It gives the buyer a sense of empowerment, a sense of preparation, which makes them more confident to move forward with his investment,” Ms. Narvasa noted.

The website also caters to sellers, real estate agents, and brokers by helping them find customer leads for their property listings. For P999 a month, they can post an unlimited number of listings without any commission sharing with PropertyAccess Philippines.

The website also has a feature called Leads Filtering. With the help of trained professionals who use a criteria “based on logic and experience,” quality leads are filtered in and sent to agents or brokers.

It also has articles on real estate news, home care tips, and design trends, among others.

PropertyAccess is also holding regular events for the real estate industry, all of which are staged in Japan. For this year, the company will hold the International Property and Investment Conference in May, the third Japan International Property Awards, and the World Investment Fair, both in November.

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Arthaland raises P3 billion in green bond offer

January 30, 2020 | 12:01 am [ bworwldonline.com ]

THE maiden offering of ASEAN green bonds by niche property developer Arthaland Corp. has been oversubscribed to reach P3 billion.

In a stock exchange disclosure yesterday, the listed firm said the P1-billion oversubscription option of its P2-billion green bonds “has been exercised in full,” which means the company was able to raise P3 billion from the first tranche of its total shelf registration of P6-billion ASEAN green bonds.

Arthaland started its offer period for the fixed-rate bonds on Jan. 22, which ended on Jan. 28. The bonds have an interest rate of 6.3517% per annum and are scheduled to mature by 2025.

BDO Capital and Investment Corp. and ING Bank acted as the joint lead underwriters and joint bookrunners, while PNB Capital and Investment Corp. acted as the co-lead manager for the issuance.

The offer of Arthaland marks the Philippines’ first non-bank corporate issuance of ASEAN green bonds registered with the Securities and Exchange Commission (SEC).

Green bonds, also called climate bonds, are a type of loan that are committed to be used for environmental projects. The SEC adopted the ASEAN green bond standard for the Philippines, which requires that proceeds from such issuances must be “exclusively applied to finance or refinance, in part or in full, new and/or existing eligible green projects.”

Arthaland said before that the cash to be generated from its green bond offer will be used to finance its pipeline of green projects. The company has several internationally and locally recognized green buildings in its portfolio, such as the Arthaland Century Pacific Tower and Arya Residences in Bonifacio Global City, Taguig.

The company has a plan to expand its development portfolio by five times until 2024, which will result in an increase in its gross floor area to above 500,000 square meters.

Earnings of Arthaland in the first nine months of 2019 soared to P647.36 million from P75.64 million a year ago, driven by the 151% growth in its revenues to P1.49 billion.

Its shares at the stock exchange inched up one centavo or 1.23% to P0.82 apiece on Wednesday. — Denise A. Valdez

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Change will be huge in 2020

Change will be huge in 2020 :@inquirerdotnet

Philippine Daily Inquirer / 03:04 AM January 29, 2020

Real estate companies and developers must embrace a higher degree of knowledge and expertise to understand and strategize the complexities of a mature property market

By: Enrique Soriano III - Executive director, Wong+Bernstein Advisory - 

Soriano stressed the importance of learning how to adapt in order to survive amid new risks and new value drivers.

If there is one thing that we can bank on to remain constant, it is change. A common and overused sentiment, yes, but nevertheless true.

Change is not afraid to disrupt and unsettle what is believed to be established, even the seemingly optimistic future of the real estate industry for 2020. The changing landscape has major implications and developers must adapt early to survive.

As key players in a sector that requires big chips and big risks, it is necessary to learn how to adapt in order to survive. It is imperative to survey and understand new value drivers such as fast growing cities, the rising competition and the double-edged sword of sustainability and technological innovation because these will undoubtedly usher in greater risks alongside greater opportunities.

According to a PWC report, the property sector will find itself at the center of a rapid economic and social change.

While most of these trends are already happening, players are still underestimating their implications over the next six years and beyond. Real estate developments can still expect opportunities but this time, fraught with far greater risks and new value drivers. It is therefore important to plan for these changes.

This, in a nutshell, was the message I had reinforced in the first ever, jampacked Property Forum of the Philippine Daily Inquirer entitled “State of Real Estate: A Clear Vision for 2020” in front of seasoned and battle-tested real estate veterans.

Opportunities everywhere

Building up on the talk of Colliers’ Richard Raymundo who had discussed data-driven insights, I shared the inevitable truth that the industry will encounter—that hope is not a strategy in the face of the ever-changing landscape where the opportunities and real threats are inextricably linked. And the best way to sustain the momentum is to plan and create powerful strategies that are deliberate and target specific.

The growing middle class is one of the two most powerful sectors to watch out for—but it is not without certain implications. Arguably, cities that are progressive will greatly benefit from the current boom while others will turn into ghost towns or downright disqualified due to certain factors that are out of reach such as poor local government support, slums and rampant crime.

The burgeoning population in the cities should also be looked at as an opportunity to explore creative ways of optimizing space. At the same time, the increasing urban sprawl should challenge developers to pursue smaller apartment and functional dwellings.

Another huge opportunity to bet on and watch out for is the aging population. The increasing global demand to support this phenomenon should compel stakeholders to create a new breed of asset class and invest in infrastructure. 

You don’t have to do anything wrong to fail—your competitors will just have to do it right to take you out of the game

We are now witnessing a natural behavior of the tenants becoming owners. A “flight to quality migration” by long time lessees of old dilapidated apartments switching loyalty to new vertical developments that offer better convenience and amenities and the opportunity to own their first homes.

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Let’s Talk Tax : Feeling REITful

Feeling  REITful

January 27, 2020 | 9:58 pm

Let’s Talk Tax

By Ma. Jessica A. Guevarra

Today, I celebrate my one-year anniversary working at Punongbayan & Araullo (P&A). In the past 12 months, my life has changed, and my priorities have transformed in ways I could never have imagined. It’s challenging, but these challenges were just one of many things that helped me grow and develop my professional work opportunities.

In 2009, Republic Act (RA) No. 9856, otherwise known as The Real Estate Investment Trust (REIT) Act of 2009, was passed by Congress. A REIT is a stock corporation established in accordance with the Corporation Code and rules of the Securities and Exchange Commission (SEC). Its primary purpose is to own income-generating real estate assets. Investment in the REIT shall be by way of subscription to or purchase of shares of stock of the REIT. With this, the public may invest in the real estate sector by merely owning shares, without the need to directly own the asset itself.

Although a REIT is subject to the regular corporate income tax, every REIT may benefit from the several tax incentives as provided in the REIT Law.

One of the major benefits of investing in a REIT is that, it is mandated to distribute at least 90% of its distributable income as dividends to its shareholders. Although generally, dividends distributed out of the retained earnings of a corporation are non-deductible, the REIT Law seems to provide an exception — such dividend distribution may be deducted from the REIT’s taxable income. Likewise, income payments to a REIT shall be subject to a lower creditable withholding tax of 1%.

The law has also provided for certain requirements, such as but not limited to the following: (a) it must be a public company; (b) it must have a minimum paid-up capital of P300 million; (c) must be listed in and maintain its listing status with the Philippine Stock Exchange (PSE); (d) at least 75% of its assets must be property and must be income-generating. Moreover, in order to be considered a public company, a REIT must, upon and after listing, have at least 1,000 public shareholders, each owning at least 50 shares of any class, who in the aggregate, own at least one-third of the outstanding capital stock of the REIT.

With the promising effects of the REIT Law, there were regulatory issues that need to be addressed before the public and the property developers can truly experience the benefits of the law.

Some of the issues encountered during the time were the following:

(1) Imposition of VAT on the transfer of real property;

(2) Imposition of the minimum public ownership rule 67%; and the

(3) The requirement of putting the tax benefits/savings in escrow

But with the continuous developments in the field of taxation, these issues were gradually resolved.

With the passage of the TRAIN Law, and issuance of the Revenue Regulations (RR) No. 13-2018, which implements the provisions of the TRAIN especially on VAT, transfers of property under Section (40)(C)(2) are now exempt from VAT. Hence, REIT sponsors or promoters will not be burdened with huge cash outs for VAT payments when they contribute their real properties to set up the REIT.

Recently, the Securities and Exchange Commission (SEC) issued SEC Memorandum Circular No. 1, Series of 2020, or the Revised Implementing Rules and Regulations of the REIT Act.

This is indeed a great development for the public and property developers, especially that the MPO at 67% which was deemed burdensome to them, has been lowered to 33% under the revised IRR. The SEC has also inserted a provision on reinvestment requirement for any sponsor/promoter, which is in line with the policy to promote the development of the capital markets and Filipino participation in the real estate industry, democratizing wealth by broadening the participation of Filipinos in the ownership of real estate, and using the capital markets as an instrument to help finance and develop infrastructure projects.

To safeguard the interests of investors, the SEC has also required that for related-party transactions, there must be a related-party transactions committee, where the majority of the members are independent directors who must vote unanimously in approving such transactions. Also, the SEC requires the REITs to comply with the SEC Memorandum Circular No. 10, Series of 2010, specifically, the requirement for publicly-listed companies to disclose their respective policies on material related party transactions and report such dealings within three days from their execution.

The requirement in the original IRR to put the tax savings in escrow no longer appears in the revised IRR.

With these notable amendments, the SEC hopes to develop a viable REIT market that will unlock a deep source of funding for more infrastructure projects along with a lucrative investment opportunity for Filipinos.

Now that I am starting another year at P&A, I know that my professional work opportunities would continue to develop as I go along, in as much as I am truly grateful to see another year with the firm.

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Let’s Talk Tax is a weekly newspaper column of P&A Grant Thornton that aims to keep the public informed of various developments in taxation. This article is not intended to be a substitute for competent professional advice.

Ma. Jessica A. Guevarra is tax associate of Tax Advisory & Compliance division of P&A Grant Thornton, the Philippine member firm of Grant Thornton International Ltd.

First REIT issuance expected in two months

January 24, 2020 | 12:04 am [ bworldonline.com]

THE new guidelines for real estate investment trusts (REITs) are set to take effect in the first week of February, after which any possible applicant may take at least two months for the country’s first REIT issuance.

The Securities and Exchange Commission (SEC) published in newspapers of general circulation yesterday the new implementing rules and regulations (IRR) of the REIT Act, three days after it was launched to the press on Monday.

Section 8 of the IRR said the rules will take effect 15 days after the publication, or on Feb. 7.

Ramon S. Monzon, president and chief executive officer of bourse operator Philippine Stock Exchange, Inc. (PSE), said on Monday a company that wants to do a REIT listing may take two months at the earliest to complete all documents needed for such issuance, or by the second quarter of the year.

The REIT guidelines presented earlier this week is expected to drive up interest from property developers to tap the investment vehicle, as the government relaxed the provisions of the REIT Act (Republic Act No. 9856) as enacted in 2009.

This covers the adjustment of the minimum public float for REITs to 33%, lower than the previous requirement of 40% public float within one year and 67% within three years.

The new rules also allowed the exemption from value-added tax for the transfer of property into a REIT vehicle. Minimum paid-up capital for a REIT issuance is set at P300 million.

However, proceeds from any REIT issuance are required to be invested to any real estate and infrastructure project in the Philippines within one year.

The IRR said if the real estate is located offshore, the investment of the REIT must not exceed 40% of its deposited property and must be done only through a “special authority” from the SEC.

Among other allowable investments are in real-estate related assets, corporate bonds of non-property and privately-owned domestic corporations, commercial papers and offshore mutual funds.

In his speech at the launch of the REIT IRR on Monday, Finance Secretary Carlos G. Dominguez III said the new investment vehicle is expected to become a “powerful financial instrument to fund property development and drive the economy forward.”

“We democratize wealth by opening access for thousands of small investors wanting to be shareholders in secure and profitable real estate projects,” he added.

Companies that have previously expressed interest to launch REITs are Ayala Land, Inc., DoubleDragon Properties Corp., Megaworld Corp. and Century Properties Group, Inc. — Denise A. Valdez

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ALI says land deal ‘beneficial’ for UP but market fears persist

January 22, 2020 | 12:08 am [ bworldonline.com ]

UP-Ayala Land Technohub — WWW.AYALALAND.COM.PH

By Denise A. Valdez, Reporter

AYALA LAND, Inc. (ALI) said it is open for a probe of its contract with the University of the Philippines (UP) for the UP-Ayala Land Technohub project following allegations of underpayment by Malacañang.

In a statement late Monday, the property arm of the Ayala group said it “(welcomes) a transparent review and assessment of our partnership with UP” as it “(believes) this development has been fruitful and beneficial for UP, ALI and the community.”

Contrary to figures cited by Presidential Spokesperson Salvador S. Panelo that ALI is paying less than P20 per square meter (sq. m.) for its 25-year contract with UP, the company said UP will be getting P171 per sq. m. per month for the partnership.

The value comes from ALI’s P4.23-billion lease payment covering 25 years — P1.1 billion from 2008-2018 and P3.13 billion from 2019-2033 — and the P6 billion construction cost for the 16 commercial buildings within the complex. This is equivalent to a total of P10.23 billion payment from ALI to UP for the partnership.

Divided by the 20 hectares (200,000 sq. m.) that ALI said is “developable” within the 37-hectare Quezon City property where Technohub stands, and the 25 years (300 months) covered by the contract, the total payment is P171 per sq. m. per month.

“After 2033, UP as owner, will receive 100% of the buildings’ rent. UP also continues to own the land which has appreciated in value since the start of the partnership,” ALI said.

“Over the 25-year term of the lease, UP will receive the following: 1) lease payments and 2) buildings. This totals P171/sqm/month,” it added.

Despite the clarification, shares in ALI and its parent Ayala Corp. (AC) at the stock exchange continued slumping on Tuesday. Shares in ALI lost one centavo or 2.47% to close at P39.50 each, while shares in AC gave up 35 centavos or 4.67% to P715 each.

PNB Securities, Inc. President Manuel Antonio G. Lisbona said investors are worried other contracts between Ayala-led firms and the government will also be scrutinized. “If any more are found to be ‘onerous’, the company’s income could be threatened,” he said in a text message Tuesday.

AC’s water arm Manila Water Co., Inc. is also alleged by the government of having an onerous contract. A new contract is currently being drafted by the government.

“How long this will last is anybody’s guess at this point, unfortunately. You can bet though that all the business groups that have government contracts are now reviewing these carefully,” Mr. Lisbona added.

But for Philstocks Financial, Inc. Research Associate Piper Chaucer E. Tan, since much of the decline is brought by negative sentiment, he believes its impact on AC and ALI shares are short-lived.

“I think that would be temporary. Kasi kung makikita mo, Technohub, isa lang naman yan sa maraming projects ng Ayala Land [I think that would be temporary. Technohub is just one of the many projects of ALI],” he said in a phone call Tuesday.

“Kung magkaroon man ng clarity on a compromise parang sa water… yun yung underlying catalyst for Ayala Land [If there will be clarity on a compromise like what was done for water concessionaires… that is an underlying catalyst for ALI],” he added.

Meanwhile, Presidential Legal Adviser Salvador S. Panelo said he would recommend the investigation of the contract between UP and ALI, adding that the deal is “onerous.”

In a television interview, he said he would be making the recommendation to President Rodrigo R. Duterte after ALI disclosed on Monday that UP will be receiving P10.23 billion by 2033 or 25 years after the company leased the property in 2008.

“I will recommend to the President pag-aralan natin ito mukhang kawawa na naman ang gobyerno dito (We need to study this because it appears that the goverment is again the aggrieved party in this),” he said.

“For 25 years I think they will be getting about P48 billion, while UP will be getting (P10.23 billion) according to them and you must remember that 25 years in a building, I think that should be demolished already. By that time, it is not that worth[y]. It is not that valued anymore,” Mr. Panelo said.

“Definitely lugi ang gobyerno dito (The government is on the losing end here),” he added. — with Gillian M. Cortez

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Bria to hold Grand Open House

January 21, 2020 | 12:03 am [ bworldonline.com ]

Bria Homes has over 50 residential communities nationwide. -- COMPANY HANDOUT

MASS HOUSING developer Bria Homes is holding a Grand Open House in more than fifty of its residential communities nationwide on Jan. 25 and 26.

“Bria Homes intends to aid in nation-building by showing Filipinos that owning a Bria Home is just the first step towards achieving more goals that, in turn, contributes to the country’s progress,” the company said in a statement.

The Grand Open House on Jan. 25 starts with a motorcade at 7 a.m., followed by the launch of Bria Homes’ Pambansang Pabahay Campaign.

Prospective homeowners can check out Bria Homes’ various model units throughout the weekend. These include Elena, a 24-square meter (sq.m.) unit on a 36 sq.m. lot; Bettina, a 44-sq.m. unit on a 36-sq.m. lot; Alecza, a 36-sq.m. unit on an 81-sq.m. lot; and condominium model units.

During the Grand Open House, Bria Homes will unveil seven new communities. These are located in Alaminos, Pangasinan; Pililla, Rizal; Montalban, Rizal; Naga, Camarines Sur; Danao, Cebu; Cagayan de Oro; and Maco, Davao de Oro.

Bria Homes is a subsidiary of Villar-led Golden Bria Holdings, Inc.

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Real estate crowdfunding platform launched

January 21, 2020 | 12:02 am [ bworldonline.com ]

Flint aims to simplify the process of purchasing and investing in Philippine properties.

By Bjorn Biel M. Beltran

Special Features Writer

ONLINE real estate platform Signet Properties, working with SeedIn Technology (SeedIn PH) and RE/MAX Premier Manila, launched Flint — the first tech-enabled real estate crowdfunding platform in the Philippines.

Flint aims to simplify and streamline the process of purchasing and investing in Philippine properties, while making it more accessible for local investors. The platform allows this through SeedIn PH’s robust financial system and network throughout Southeast Asia, as well as RE/MAX’s’ income-generating and capital-gaining real estate properties in Flint’s pre-funded portfolio.

“We are most excited about this latest innovation because it will finally provide opportunities for anyone who is hesitant or is overwhelmed with the process of investing in Philippine properties,” Andre Mercado, Signet Properties CEO, said.

He said that all real estate properties available for investment at Flint are pre-funded. For as low as P1,000, users can purchase a share of the real estate property regardless of whether or not the total Flint user investment has reached the investment amount of the property selected. Pre-funding the properties also allows the platform to secure higher interest rates and accelerate investment closing so users can earn the interest quickly.

Moreover, as it is powered by SeedIn, Flint has special regulatory accreditation covered. Foreigners and foreign-born investors can invest in available investments in Flint as long as there are no legal issues, precedents, or any other special circumstances that prohibit them from doing so, and they have passed account verification by Flint’s customer support team.

“Through our strategic partnership with Signet Properties and RE/MAX Premier Manila, we are empowering investors by strengthening services offered in Flint for the investment and real estate needs of Filipinos, overseas Filipino workers (OFW), and foreign investors, by ensuring the investments are safe, high-yield property projects that go through rigorous due diligence processes, all under a digital crowdfunding platform where Flint investors can participate and invest in its property projects safely and conveniently,” Edison Tsai, SeedIn partner and executive director, said.

Mr. Mercado added that the company plans to expand its reach to countries with significant OFW communities to include properties abroad in its pre-funded portfolio.

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Implementing rules on real estate investment trust ready for signing

January 20, 2020 | 12:07 am [ bworldonline.com ]

THE government is set to sign today the amendments to the implementing rules and regulations (IRR) of the Real Estate Investment Trust (REIT) Act, which is expected to draw up REIT registrations from listed property firms.

The Securities and Exchange Commission (SEC) announced through a media invitation on Friday the joint signing ceremony for the REIT guidelines with the Department of Finance (DoF), Bureau of Internal Revenue (BIR) and the Philippine Stock Exchange, Inc. (PSE) today.

Republic Act No. 9856 or the REIT Act was released by the government in 2009 as part of “(promoting) the development of the capital market, …broadening the participation of Filipinos in the ownership of real estate…, (and using) the capital market as an instrument to help finance and develop infrastructure projects.”

While the REIT Act requires the publication of the IRR within 90 days from the law’s effectivity, disagreements on a number of its provisions such as the minimum public ownership requirement delayed the release of the guidelines by more than a decade.

In October last year, the SEC released its draft IRR which reduced the minimum public ownership requirement for REITs to 33% from the current 40% within one year and 67% within three years, and required all income generated from REITs to be invested back to the Philippines.

But SEC Commissioner Ephyro Luis B. Amatong said in November that conflicting rules with the BIR is another thing that the SEC has to settle before the release of the IRR.

“Unless the BIR changes the revenue regulation to be in line with the proposed change in the SEC’s regulation lowering back the minimum public float requirement for a REIT to 33%, there will be potential confusion among issuers. SEC will be prescribing a lower threshold, and if the BIR does not amend its rules, the tax benefit will not come in unless we get 66%. So we’re coordinating with the Department of Finance in order to make sure that the regulations are aligned,” Mr. Amatong said then.

The release of the IRR is expected to result in REIT listings from private firms such as Ayala Land, Inc. and DoubleDragon Properties Corp. Other firms such as Megaworld Corp., Robinsons Land Corp. and Century Properties Group, Inc. have also expressed interest in REITs.

The PSE also sees the REIT rules as one of the growth drivers for the local bourse this year, in line with expectations of investment banking arm First Metro Investment Corp. and brokerages Philstocks Financial, Inc. and 2Tradeasia.com. — Denise A. Valdez

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CLI eyes provincial property near Cebu IT Park

January 16, 2020 | 8:13 pm [ bworldonline.com ]

CEBU Landmasters, Inc. (CLI) has expressed interest to develop a 6,000-square meter prime property across the Cebu IT Park owned by the Cebu provincial government. “Well, they expressed their interest to participate in any bidding for the development of several strategically-located and highly valuable properties of the province,” Governor Gwendolyn F. Garcia said. “Here is a homegrown… developer that can now be at par with other developers from Manila,” she added. CLI is also eyeing to develop the 849-square meter lot located at Jose Maria del Mar Street within Cebu IT Park that the provincial government used to lease to Innoland Development Corp. 

“We initially thought that we would offer this for lease since there is already an existing building but they opened my eyes to the possibility of also including development there so that it widens the area and gives the interested developer more flexibility,” Ms. Garcia said. Innoland remains qualified to bid for the property. The governor said they are now working on the terms of references for the bidding of all the provincial government’s properties in prime locations. She said a build-operate-transfer contract will be the most likely arrangement. — The Freeman

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Arthaland fined for not updating website

January 17, 2020 | 12:06 am [ bworldonline.com ]

ARTHALAND Corp. said it has paid the Securities and Exchange Commission (SEC) P130,000 for failing to comply with its website template guidelines.

In a disclosure to the stock exchange Thursday, the listed niche property developer said it had been alerted by the corporate regulator on Tuesday about failing to update its website in accordance with its guidelines.

“In its letter dated 10 January 2020 (copy received on 14 January 2020), the (SEC) found the corporation not having updated its website within the deadline prescribed in compliance with the SEC Prescribed Website Template (SEC Memorandum Circular No. 11, Series of 2014) and directed it to pay a penalty of P130,000 within 10 days from receipt of said letter,” it said.

The penalty was paid by Arthaland on Thursday.

SEC Memorandum Circular No. 11, Series of 2014 requires publicly listed companies to provide a list of items in their respective websites such as company backgrounds, corporate governance manuals, board committees, company disclosures, press materials and investor relations programs.

The SEC said the template for websites is part of its initiatives to “promote a better corporate governance environment for publicly listed companies.”

The required information uploaded on websites must stay for five years. The circular said this is a minimum requirement for the websites and “any item/s could be added or removed therefrom any time the need arises.”

Shares in Arthaland at the stock exchange inched up 1.15% to close at P0.88 each on Thursday.

The company is currently on a five-year plan to expand its portfolio by five times to a gross floor area of a little over 500,000 square meters by 2024. Its earnings in the first nine months of 2019 jumped to P647.36 million from P75.64 million in the year prior. — Denise A. Valdez

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Davao manufacturer ventures into hotel business

January 14, 2020 | 12:03 am [ bworldonline.com ]

Blue Lotus Hotel is targeting leisure and business travellers. -- BW/LEAN S. DAVAL, JR.

DAVAO CITY — The family behind weighing scale manufacturer First Philippine Scales Inc. (FPSI) has ventured into the hotel business, taking advantage of a 2,000-square meter prime property in Davao City where the new Blue Lotus Hotel now stands.

The lot along Quimpo Boulevard, one of the main roads in the city, was originally planned by the Policarpio family for an FPSI showroom for its Fuji line of weighing scales and other products.

“Nanghihinayang ako rito sa puwesto kung showroom lang (I felt it would be a waste if we just put up a showroom here),” Amparo U. Policarpio, president of Blue Lotus Hotel, said in an interview.

“Maganda naman ang location dito sa Davao at maganda ang surroundings kaya naisipan namin na gumawa ng hotel (The location in Davao is good and the surroundings are nice, that’s why we thought of building a hotel),” she added.

The seven-floor, 133-room hotel is being positioned not just for leisure and business travelers, but as a venue for small and medium-sized meetings, seminars, conferences, and special events with its eight function rooms.

The hotel also have an eco-friendly facilities such as LED lighting, solar power, rainwater harvesting system, and energy-saving air-conditioning system.

The hotel is being positioned and more. It offers eight function rooms that can accommodate up to 400 people theatre-style.

Ms. Policarpio said they do feel a bit nervous going into a new industry, and appreciate customer feedback so that they can keep on improving the service.

“This is our first time to venture into hotel business. There may be something that still needs improvement, we appreciate your feedback. There may be imperfections during your stay here, please accept our apology,” she said.

FPSI started as a trading firm in 1968 for weighing scales from Taiwan, Japan and the US. It started manufacturing its own Fuji brand in 1975 with its first plant in Caloocan. Its first branch in Davao City was opened in 2002. — Maya M. Padillo

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DMCI, RLC team up for Las Piñas condo

January 14, 2020 | 12:02 am [ bworldonline.com ]

DMCI, RLC team up for Las Piñas condo

CONSUNJI-LED DMCI Homes and Gokongwei-led Robinsons Land Corp. are teaming up for a three-building condominium project in Las Piñas City.

In a statement, the real estate arm of listed DMCI Holdings, Inc. announced its joint venture with Robinsons Land to build Sonora Garden Residences, a condominium that promises a resort-living experience within the metro.

The development will stand on a 1.45-hectare land near Alabang-Zapote road, which will have access to the Robinsons Place Las Piñas Mall.

The three buildings comprising the project are the 15-story Stellan, 40-story Cadence and 41-story Liran, which will have one-, two- and three-bedroom units with sizes ranging from 28 square meters (sq.m.) to 83.5 sq.m.

DMCI Homes said 70% of the land area for the project will be dedicated to open spaces and resort-inspired amenities.

“We envisioned Sonora Garden Residences to be a prime living destination for those who are craving for the pleasures of residing in a resort-like atmosphere and at the same time enjoying the convenience of having easy access to everything in southern Metro Manila,” DMCI Homes Assistant Vice-President for Project Development Dennis O. Yap said in the statement.

Aside from mall access, the development is located near the Ninoy Aquino International Airport and several entertainment hubs, schools, government institutions and hospitals.

Within the gates of Sonora Garden Residences, residents can also enjoy indoor amenities such as an entertainment room, Sky Promenade, a game area and a fitness gym. Its outdoor facilities also include a lap pool, a kiddie pool, a leisure pool, a basketball court, a play area for kids, a pool deck, a jogging path and an open lounge.

The property is scheduled for turnover by December 2023. DMCI Homes and Robinsons Land have started pre-selling units at the 40-story Cadence building for P3.99 million and above. — Denise A. Valdez

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Developers expected to sustain double-digit pre-sales growth this year

January 13, 2020 | 12:30 am [ bworldonline.com ]

Developers are planning to launch new residential projects to address growing demand. -- REUTERS

PHILIPPINE developers are expected to sustain double-digit growth in pre-sales and profit this year, according to the research arm of Morgan Stanley.

“We forecast industry-wide residential pre-sales to sustain 10% growth in 2020 on tight levels of supply amid a conducive macroeconomic backdrop,” Morgan Stanley Research said in a report on the Philippine property sector titled “2020 Outlook: Another Year of Growth.”

Morgan Stanley Research estimated that pre-sales growth slowed to 10% in 2019, from 22% in 2018.

Based on company data from the largest 10 developers, it said actual pre-sales grew by 8% year on year in the first nine months of 2019.

Unsold inventory has continued to drop from 2016 to September 2019, with sales outpacing launches, it said. Developers are also planning to launch more projects to meet the “still-rising demand.”

“We also see developer earnings, on aggregate, sustaining double-digit growth on revenue recognition from previous years’ home sales and still-growing commercial rents,” Morgan Stanley said.

The Philippine property sector’s growth will be backed by favorable macroeconomic conditions, with gross domestic product (GDP) expected to grow from 5.8% last year to 6% in 2020.

“We think the economic growth recovery and falling interest rates will boost home-buyer sentiment and keep home purchase demand buoyant,” Morgan Stanley said, noting its economists see Philippine GDP growth as one of the fastest in ASEAN from 2019 to 2021.

The central bank is expected to further cut policy rates by as much as 50 basis points (bps) in the first quarter. In 2019, the Bangko Sentral ng Pilipinas reduced policy rates by 75 bps.

Meanwhile, Colliers International Philippines Research Manager Joey Roi H. Bondoc said they expect more residential projects to be launched in Metro Manila this year.

“After posting a record-high take-up 57,000 units in 2018, we see full year 2019 take up hovering between 40,000 to 50,000 units due to slower launches. However, we see launches in Metro Manila picking up over the next 12 months,” he said in an e-mail.

With surging land values and lack of developable space in key areas such as the Makati and Ortigas central business districts, developers are pushed to launch residential projects in the fringes to meet demand.

Areas that will account for most of the take-up include the Bay Area, Quezon City, Ortigas Center and fringe areas.

This year, Mr. Bondoc said Colliers is projecting the delivery of 15,610 units in Metro Manila, “outpacing the annual completion of 7,700 units annually in 2012 and 2014 and even higher than the 10,700 units delivered from 2016 to 2018.”

“Colliers encourages developers to constantly look for fringe areas ripe for construction of new condominium projects,” he noted, and added that developers should further look into the north and south areas of Quezon City, fringe of Ortigas Center, Pasig City, and areas in downtown Manila.

POGO EFFECT

Meanwhile, speculative activity in the property market fueled by the growth of the Philippine offshore gaming operator (POGO) industry is likely to continue this year.

“Siyempre risk ’yun. Binabantayan naman ng Bangko Sentral (Of course it is a risk. But it is monitored by the Bangko Sentral ng Pilipinas),” Bank of the Philippine Islands (BPI) lead economist Emilio S. Neri, Jr. said in an interview with BusinessWorld on the sidelines of an event of the Rotary Club of Manila.

Mr. Neri said both the property sector and the POGO industry should be taken into consideration in monetary policies as POGOs continue to expand in the country.

“Looks like it [risks] will continue…That’s why hindi na dapat i-aggravate ng (it should not be aggravated by) additional stimulus. Like for example, that has to be factored in the deliberations of the monetary policies.” he said.

Fitch Ratings last week said the property price surge fueled by the POGO industry could “affect market stability if unchecked.”

“To the extent that the increase in prices has been driven by a boom in the Philippine online gaming operator sector, it may also expose banks and the property industry to greater policy risk,” the rating agency said in a note sent to reporters on Wednesday.

Fitch said condominium prices in Metro Manila surged by an “unsustainable” 34% year-on-year, while the residential property prices jumped by an annual 10%, making it among the strongest growth prints in any major real estate market since 2010.

POGO workers have pushed up demand for residential spaces, particularly in Makati, Alabang, Quezon City, and the so-called Bay Area in Pasay.

Fitch noted a prolonged period of “rapid house price inflation” may cause increased borrowing, especially if the rise in prices is “speculative.”

“Aside from the property company themselves, direct exposure of the company to the POGOs, tinitignan din ng mga bangko ’yan [banks are also checking that]. There should be certain limits to the entire portfolio,” BPI’s Mr. Neri said.

Since 2015, Philippine banks’ real estate exposure remained “broadly stable” at about 20% of total loans.

Latest data from the central bank showed that credit for real estate activities inched up by 19.3% year on year to P1.631 trillion as of November 2019 from P1.354 trillion in the previous year. — Vincent Mariel P. Galang and Luz Wendy T. Noble

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Century Properties keen on REIT launch

January 13, 2020 | 12:03 am [ bworldonline.com ]

CENTURY Properties Group, Inc. (CPG) said it is “very interested” to launch real estate investment trusts (REITs) once the government finalizes its rules on the real estate investment platform.

CPG President and Chief Executive Officer Jose Marco R. Antonio told reporters Friday the listed property developer is eyeing its office leasing portfolio to register for REITs once the plan is ripe.

“We’re very interested. I think it’s been a long-time coming for the Philippines… For us, as we’re growing our office portfolio, the REITs would be a great way to raise capital,” he said.

“We would participate once we are able to comply with the minimums and when we think there is a substantial or an adequate size to be able to have a REIT for CPG. If ever, it would definitely be more concentrated into office developments,” he added.

CPG’s leasing revenues as of the nine months of 2019 stood at P404.07 million, up 41.67% from the same period a year ago. CPG’s office assets are classified under this business segment, which is also comprised of Century City Mall in Makati, 160 medical suites in Centuria Medical Makati and the Pacific Star Low Rise Building where it has 50% ownership, among others.

“We look at the REITs as a long-term fund-raising tool and capital markets initiative that would allow us to actually accelerate further our expansion plans for commercial leasing assets,” Mr. Antonio said.

The government is targeting to finalize its guidelines on issuing REITs within the year, 11 years after Republic Act No. 9856 or the REIT Act was approved in 2009.

Based on the last draft rules that the Securities and Exchange Commission released in October, the proposal is to reduce the minimum public ownership for REITs to 33% from 40% and to require all income generated from REITs to be reinvested onshore.

Aside from CPG, Ayala Land, Inc. also said in December it wants to make its maiden REIT offering in 2020 for its prime Makati office assets.

CPG has set its capital spending at P30 billion until 2022 to finance its expansion plans. Earnings of the firm in the nine months to September rose 81% to P1.2 billion as revenues jumped 36% to P9.8 billion.

Shares in the company shed 2 centavos or 3.70% to P0.56 apiece on Friday. — Denise A. Valdez

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Bulacan airport set to break ground next week

January 9, 2020 | 12:03 am [ bworldonline.com ]

THE Department of Transportation (DoTr) on Wednesday said the groundbreaking for the Bulacan airport project will finally push through next week.

“In so far as the Bulacan airport is concerned, I have been advised that the groundbreaking by the proponent will be done mid-January. I think it is also Jan. 15,” Transportation Secretary Arthur P. Tugade said in his speech during the conference on the Institutionalized Leveraging of Infrastructure Program for Airport Development (iLIPAD) held in Clark, Pampanga on Wednesday.

“This project will now be a go,” he also said. The groundbreaking for the airport project was supposed to happen in December last year.

Asked to confirm, San Miguel Corp. (SMC) Media Affairs Group Manager Jayson B. Brizuela told BusinessWorld in a phone interview: “Naghihintay pa rin kami ng confirmation, at saka kami magi-issue ng statement (We’re still waiting for confirmation, we’ll then issue a statement).”

SMC President and Chief Operating Officer Ramon S. Ang had said last month that the groundbreaking was “being delayed” after the government raised concerns about the contract.

According to Mr. Tugade, it was the Department of Finance (DoF) that raised concerns about the project contract.

He said Finance Secretary Carlos G. Dominguez III just wanted to make sure that all contracts are in favor of government.

The P734-billion Bulacan airport project, which will be officially called the New Manila International Airport, involves construction of a 2,400-hectare airport with four parallel runways (expandable to six runways), eight taxiways and three passenger terminal buildings. It will have an annual capacity of 100 million travelers, which the government hopes will help decongest Ninoy Aquino International Airport (NAIA) in Pasay City.

NAIA REHABILITATION

Mr. Tugade also said in his speech: “So what happens now to (NAIA) terminal 1, terminal 2, terminal 3 and terminal 4? The NAIA conglomerate, I hope that the conversations with the consortium will be finished in no more than two more meetings.”

“I will give them a final deadline to finalize everything within a set time limit in this month, otherwise I may be forced to cancel the unsolicited proposal and offer it to parties and individuals that are ready to accept the terms and conditions of the government’s concession agreements and the government’s detailed program in so far as the improvement and rehabilitation of terminals 1, 2, 3 and 4 are concerned,” he added.

In November last year, the board of the National Economic and Development Authority (NEDA) approved the unsolicited P102-billion proposal from the country’s top tycoons to rehabilitate NAIA.

The project will be subjected to a Swiss challenge after the Manila International Airport Authority and the NAIA Consortium agree on terms and conditions of the concession agreement. The Manila International Airport Authority will submit the draft agreement to the Office of the Solicitor General and the DoF for comment.

The consortium undertaking the project consists of Aboitiz InfraCapital, Inc; AC Infrastructure Holdings Corp.; Alliance Global Group, Inc.; Asia’s Emerging Dragon Corp.; Filinvest Development Corp.; JG Summit Holdings, Inc.; and Metro Pacific Investments Corp.

The NAIA rehabilitation is expected to increase its capacity to handle passengers to 47 million a year in the first two years and further expand this to 65 million after four years.

The international airport has been operating beyond its 30.5 million passenger capacity with 45.3 million passengers in 2018, 42 million in 2017 and 39.5 million in 2016. — Arjay L. Balinbin

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