philippine real estate news: 08/01/2020

Phase 1 of Filinvest New Clark City on track for completion

September 1, 2020 | 12:01 am [ bworldonline.com]

THE FIRST PHASE of Filinvest New Clark City (FNCC) is expected to be completed “in the near future,” including the first 60 hectares of Filinvest Innovation Park.

Filinvest Development Corp. (FDC) is developing the FNCC, a 288-hectare project that is part of the New Clark City in Tarlac. Industrial lots at the Filinvest Innovation Park are currently being offered for lease.

The company said the FNCC “represents Filinvest’s vision of building a smart, green, sustainable, and highly accessible metropolis outside Metro Manila.”

“Working with Bases Conversion and Development Authority (BCDA) and the government has only reinforced our vision that our country should be mindful of only building smart, efficient and future-ready cities,” Josephine Gotianun-Yap, president and CEO of Filinvest Development Corp, said.

“With this, we identified that Ecology, Technology and Architecture, Future, and Culture or Eco-tech-ture are vital elements that should be well-integrated to attain our goal.”

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DMCI Homes to start 3 projects before yearend

September 1, 2020 | 12:02 am [ bworldonline.com ]

DMCIHOMES.COM

DMCI HOMES plans to start residential developments this year as it remains bullish about the property market amid a coronavirus pandemic.

In a statement, the property arm of listed DMCI Holdings, Inc. said it was finalizing plans for a new residential project at its 150-hectare Acacia Estates in Taguig City. It is also studying new projects in Makati and Manila.

“Sales of our projects are still encouraging despite current circumstances which gives us confidence to launch two to three new properties before yearend,” DMCI Homes President Alfredo R. Austria said in the statement.

“Acacia Estates is always on our list because of the strong residential demand in the area,” he said. The company is also working on permits to use its land bank in Makati and Manila, he added.

The new project in Taguig City called Alder Residences will be a high-rise condominium standing on 28,607 square meters of land, according to DMCI Homes’ website.

The company said it would continue developing the Acacia Estates township as its recently finished project — Mulberry Place — was quickly sold out within weeks from launch.

The 13-year-old Acacia Estates is home to more than 8,000 families. It is near McKinley Hill, Bonifacio Global City, Makati City and the Ninoy Aquino International Airport.

Aside from residential properties, the township also features a 22,000-square-meter commercial space with restaurants, salons, gyms and a supermarket.

“Through the years, DMCI Homes has continuously developed Acacia Estates to bring the necessities of modern living to the residents,” it said.

The property developer posted a 97% profit decline to P38 million in the first six months as its operations were disrupted by the coronavirus pandemic.

Income at the whole DMCI group, which has businesses in mining, construction, water and power plunged 69% to P2 billion from a year earlier. — Denise A. Valdez

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Property sector outlook remains dim as shoppers stay away from malls

September 1, 2020 | 12:31 am [ bworldonline.com]

A man walks outside a shopping mall at the central business district during the “enhanced community quarantine” in Luzon last March. — REUTERS/ELOISA LOPEZ

By Denise A. Valdez, Senior Reporter

LISTED PROPERTY companies may continue to see double-digit profit drops for the remainder of the year, as consumers continue to stay away from shopping malls amid the rise in the number of coronavirus infections.

Researchers from brokerages AAA Southeast Equities, Inc. and Philstocks Financial, Inc. continue to see weak mall traffic as an indicator of the slow recovery of the property sector despite the easing of lockdown restrictions since June.

“We are taking a very close look at mall traffic because of its multiplier effect on the property companies. Residential sales are done through booths at the mall. Most property companies will suffer as mall traffic remains low,” said Christopher John Mangun, research head at AAA Southeast Equities.

The coronavirus disease 2019 (COVID-19) has sickened 220,819 and killed 3,558 in the Philippines as of Monday.

The government has locked down parts of the country since mid-March, imposing new quarantine protocols with varying degrees of strictness every two weeks, in hopes of containing the spread of the virus. As a result, nearly all economic activity ground nearly to a halt in April and May, pushing the economy into a recession.

Malls, hotels and office buildings were shuttered across Metro Manila at the height of the lockdown. As a result, earnings of listed companies were lower by a median of 40.5% in the first half. This decline is in line with the estimates of both AAA Southeast Equities and Philstocks.

“The Philippine property sector is one of the most vulnerable sectors, alongside hotels, tourism, gaming, and transportation,” said Piper Chaucer E. Tan, a research associate at Philstocks. “We are not so bullish for the property sector right now.”

AAA Southeast Equities’ Mr. Mangun added: “We saw some traction back in July as mall traffic was beginning to pick up, but the spike in daily new cases and the imposition of tighter restrictions in August diminished mall traffic once again.”

Malls have seen improved foot traffic since lockdown restrictions were eased but sales remain lackluster.

Both analysts anticipate that property companies will still post lower year-on-year earnings in the second half, but efforts to adjust to the pandemic may help them show improvements compared to how they did in January to June.

“We are expecting earnings to improve quarter on quarter but still come in between 15% and 25% lower from the same period last year,” Mr. Mangun said.

“[A] large chunk of second-half earnings will depend on whether consumers are confident to go out and spend during Christmas time in the fourth quarter. With new daily cases on the rise, people may continue to avoid crowds and the malls until a vaccine is available,” he added.

But the quarter-on-quarter growth may sit at around 20% to 30%, Philstocks’ Mr. Tan said, as companies are trying their best to adjust their business operations to the current virus situation.

“I think that people should learn to live with the virus, and property companies must be aggressive with marketing to scrape off the trauma and fear of going to malls,” he said.

“We do not see the mall apocalypse here compared to other countries since the malls here in the Philippines are part of the culture,” he added.

Property giants Ayala Land, Inc. (ALI); Robinsons Land Corp. (RLC); and Megaworld Corp. have all announced reduced capital expenditures this year to help cope with the pandemic.

ALI slashed its capex by 36% to P70 billion, while Megaworld cut its budget by 40% to P36 billion. RLC trimmed its spending plan by 11% to P24 billion, while SM Prime Holdings, Inc. maintained its capital expenditures at P80 billion.

All four companies reported earnings decline in the first half: ALI by 70% to P4.52 billion; RLC by 8% to P3.68 billion; Megaworld by 35% to P5.41 billion; and SM Prime by 46% to P10.43 billion.

The four companies are part of the 30-member Philippine Stock Exchange index, which has fallen 24% or 1,858.35 points since the start of the year to a 5,884.18 finish on Friday.

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Sta. Lucia Land touts projects in key cities

August 25, 2020 | 12:01 am [ bworldonline.com ]

STA. LUCIA LAND’s Orchard Towers is a nature-inspired upscale condominium located in Pasig City. — COMPANY HANDOUT

WITH the ongoing coronavirus pandemic, it’s now even more important to wisely choose the location of your home.

Local governments of Pasig, Marikina and Manila, as well as the municipality of Cainta in Rizal, have stepped up in helping their residents cope with the “new normal.” These LGUs have regularly distributed relief goods and cash aid, and strictly implemented health and safety protocols.

“We have seen what these cities and their leaders have done to lighten the load of their constituents. Thus, it comes as no surprise to see people wanting to move and relocate in areas like Pasig and other parts of the metro where the battle against COVID-19 (coronavirus disease 2019), while not completely won, is somewhat better addressed and dealt with,” Sta. Lucia Land President Exequiel Robles said in a statement.

Sta. Lucia Land has developed residential subdivisions and vertical communities within these cities. These include Sta. Lucia Residenze, Acropolis Loyola, Orchard Towers, Cainta Greenland and Pasig Greenland.

“For those looking to acquire homes that could serve as their sanctuary during and beyond the pandemic, we encourage them to look into our various projects in the area. As one of the first movers in these cities, we believe that we really understand what the market wants and that we’ve managed to create and build projects that would help further increase the value and livability of these cities,” Mr. Robles said.

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SEC says company owners may now opt for perpetual corporate existence

August 24, 2020 | 12:07 am [ bworldonline.com ]

CORPORATIONS may amend their corporate term to be extended, shortened, or deemed to have perpetual existence after a vote from their respective board and stockholders, the Securities and Exchange Commission (SEC) said in its guidelines.

The Revised Corporation Code (RCC) signed into law by President Rodrigo R. Duterte last Feb. 20, 2019 states that firms may now exist forever instead of the previous 50-year limit that can be renewed thereafter.

SEC Memorandum Circular No. 22 released on Sunday said that corporations incorporated when the code was made effective on Feb 23, 2019 will have perpetual existence unless its articles of incorporation provide a specific corporate term.

These corporations, if they have a specific term of existence in their articles of incorporation, may amend their articles of incorporation to extend or shorten their term with the written assent or majority vote of the board of directors or trustees and the stockholders representing two-thirds of outstanding capital stock.

They may do the same to amend their specific corporate term to perpetual existence.

Corporations under the revised code whose articles of incorporation already provide for a perpetual term of existence may amend this for a specific corporate term under the same written assent or vote.

SEC last year said that perpetual existence would create a sense of longevity for corporations to implement long-term projects.

CORPORATIONS BEFORE THE RCC

Corporations that have certificates of incorporation issued before the RCC was made effective will be deemed perpetual without action from the corporation.

To reflect its perpetual corporate term in its articles of incorporation, the board of directors or trustees can vote by majority as well as stockholders representing majority of the outstanding capital stock including non-voting shares. For nonstock corporations, the vote must be cast by a majority of members.

But corporations with certificates of incorporation before the RCC took effect can continue its present corporate term by filing a notice with the SEC, certifying a decision made by vote. — Jenina P. Ibañez

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Virtual notarization

August 11, 2020 | 5:55 pm [ bworldonline.com ]

Amicus Curiae

By Philip James C. Todoso

Going through reportedly the world’s longest lockdown because of COVID-19, from easing up and back to further restricting quarantine measures, it would seem that this pandemic has brought both the good and bad out of this government. As the confirmed COVID-19 cases in the Philippines recently breached the 100,000 mark, making the country the number one in Southeast Asia in number of cases, questions whether the government is doing enough swirl around.

It cannot be denied, however, that the government implemented some measures and continues to innovate policies to adapt to the new normal.

And one laudable and unorthodox policy implemented by no less than the Supreme Court of the Philippines is the 2020 Interim Rules on Remote Notarization of Paper Documents (“Rules on Remote Notarization”), which effectively amended certain provisions of the almost-two-decade old notarial rules, specifically on personal appearance before the notary public.

Under the Rules on Remote Notarization, paper documents or instruments with handwritten signatures or marks may be notarized using videoconferencing facilities. With this recent development, the traditional required practice of persons personally appearing before the notary public to have their documents or instruments notarized now becomes a thing of the past. As long as one has the necessary devices and a stable internet connection, notarization can be done in the comforts of one’s own home — doing away with the stresses of social distancing, the wearing of face masks and shields, and crossing border control traffic; ultimately aiming to eliminate unnecessary travel.

Personal appearance before the notary public can be done through videoconferencing facilities, for both the principal and his or her witnesses. Videoconferencing facilities include Webex, Zoom, Google Meet, Microsoft Teams, and other similar web conferencing platforms. More informal platforms for videoconferences, such as the Facebook Messenger application, may even be used, as long as the participants can see, hear, and communicate with each other, and confirm competent evidence of identity to each other in real time.

The following general guidelines are to be followed under the Rules on Remote Notarization:

a.) The principal shall cause the delivery of the instrument or document requiring notarization to the notary public by personal or courier service. The instrument or document must be integrally complete, bear the signature of the principal and witnesses, and be placed in an envelope sealed with the initials of the principal.

b.) Together with the instrument or document, the principal and the witnesses, not personally known to the notary public, shall provide two copies of any competent evidence of identity to the notary public.

c.) The principal shall also submit to the notary public a video clip showing that he or she actually signed the instrument or document delivered. The submission may be made together with the instrument or documents by storing the same in a compact disc (CD) or universal serial bus (USB) or by sending the video clip by electronic mail or any other means of digital communication.

d.) Upon receipt of the instrument or document, the notary public shall schedule a videoconference with the principal and the latter’s witnesses. During the videoconference, the notary public shall require the principal to confirm his or her identity, including his or her location, and require the principal to affix his or her signature on a blank piece of paper within full view of the notary public, for signature comparison, among others.

The Rules also require that the notary public, as well as the principal and his or her witnesses should be within the territorial jurisdiction of the notary public’s commission during the videoconference. And, for notaries public, they are required to take photographs and screenshots of the videoconference to serve as proof that the principal and his or her witnesses appeared before the notary public.

The adoption of this new rule conforms with the fast-paced and technology-driven work environment. As a result, it eliminates possible delays and bottlenecks in document execution brought about by the traditional concept of personally appearing before notaries public, especially considering restrictions on movement of persons during this time of pandemic. Undoubtedly, this simple yet innovative measure adopted by the Supreme Court uses pre-pandemic technologies and applications. This means that it would have been possible to implement these rules even before the crisis; the pandemic only pushed policymakers to adopt newer and better policies.

Amidst too much negativity during this pandemic, it would surely help ease the anxiety to recognize small victories such as this. Indeed, kudos to the Supreme Court!

This article is for informational and educational purposes only. It is not offered as and does not constitute legal advice or legal opinion.

Philip James C. Todoso is an Associate of the Cebu Branch of the Angara Abello Concepcion Regala & Cruz Law Offices (ACCRALAW).

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E-commerce boom to help drive demand for PHL logistics spaces

August 18, 2020 | 12:05 am [ bworldonline.com ]

THE E-COMMERCE BOOM is fueling the demand for logistics spaces in the Philippines. – PHILIPPINE STAR/EDD GUMBAN

THE DEMAND for logistics space in the Philippines is expected to grow by 160,000 square meters per year in the next decade due to a spike in e-commerce demand, real estate services firm JLL Philippines said.

The company’s research found that there is 1.7 million square meters (sq.m.) in logistics space in the country — with 424,00 sq.m. expected to be completed next year.

Dry storage makes up two-thirds of the existing supply, while cold storage accounts for 21%.

“While there is a positive demand for logistics space in the country as reflected in the uptick in transaction activity in recent years, there is an increasing demand for better quality facilities, mostly from e-commerce firms and third-party logistics (3PLs) requiring high-specification warehouses that utilize technology and digital tools as part of their operations,” JLL Philippines’ Director for Industrial and Logistics Tom Over said.

JLL Philippines’ Head of Research and Consultancy Janlo de los Reyes, in a webinar last week, said the lockdowns have slowed down the real estate sector as construction activity was halted.

“Overall, we saw close to 350,000 square meters of office space that got deferred to the second half of 2020, and around 260,000 sq.m. in Metro Manila that will likely slip to 2021,” he said.

Average vacancy levels for offices increased by 9.1% in the second quarter of 2020 due to deferred business decisions from outsourcing, Philippine Offshore Gaming Operators, and corporations.

“We do anticipate that this sentiment will remain the same in the coming quarters and will translate to minimal change or movement in the office take-up,” he said.

The residential sector was also weakened despite landlords’ term negotiations.

Average Metro Manila residential rent fell by 14.9% quarter on quarter to P1,000 per month after leasing activities were slowed down by the pandemic.

Malls that have reopened are operating at 30% to 90% after restrictions were relaxed. The vacancy rate rose by the second quarter, after some stores closed permanently.

“We saw the supply slippage of around 60,000 sq.m. of shopping mall space in Metro Manila and Davao,” he said, while another 61,500 sq.m. is at risk of slipping next year.

Mall operators, he said, are focusing on growth in areas outside Metro Manila.

“We’ve seen overall declines in the rental values in Metro Manila, Metro Cebu, and Davao. So what developers have done now is that they’re offering much more flexible lease terms.” — Jenina P. Ibañez

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AREIT to offer P15-B debt notes

August 18, 2020 | 12:07 am [ bworldonline.com ]

AYALA-LED AREIT, Inc. is preparing to put up as much as P15 billion in debt securities.

The country’s first real estate investment trust (REIT) told the stock exchange on Monday that its board approved an upcoming filing of the debt notes with a three-year shelf registration to the Securities and Exchange Commission.

“This will provide AREIT the ability to leverage for future acquisitions while preserving cash for dividend distributions,” it said.

The company is set to release P0.59-per-share dividends from the first two quarters of the year on Sept. 15.

“AREIT provides investors regular dividend income derived from prime commercial properties, higher than most fixed-income instruments,” AREIT President Carol T. Mills said.

The REIT firm has a portfolio of three Grade-A properties in Makati City: Ayala North Exchange, Solaris One, and McKinley Exchange, which cover a total gross leasable area of about 153,000 square meters (sq.m.) with a 99.9% total occupancy rate.

It has also decided to pay out dividends on a quarterly basis. The planned distribution dates will be on or before March 31, June 30, Sept. 30 and Dec. 31 of the calendar year.

The REIT Act of 2009 provides for a distribution of at least 90% income of a REIT company to investors each year. AREIT’s dividend ratio, the company said, is higher than the prescribed minimum.

Meanwhile, AREIT said it is on track to buy Teleperformance Cebu, a business process outsourcing (BPO) office property in Cebu IT Park, from Ayala Land, Inc.’s ALO Prime Realty. Upon acquisition, AREIT’s portfolio will rise to over 170,000 sq.m. by yearend.

Shares in AREIT soared by 7.68% to close at P25.95 on its third regular trading day. — Adam J. Ang

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SEC probes brokers over failed REIT trade

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

THE Securities and Exchange Commission (SEC) is investigating cases of failed trading of real estate investment trust (REIT) shares which started last week.

The corporate regulator over the weekend said it received complaints from investors who failed to trade shares for Ayala-led AREIT, Inc.’s securities due to their brokers’ alleged failure to secure permission to deal in the transaction.

Particularly, it pointed out COL Financial Group, Inc. for supposedly failing to secure necessary permits to deal in AREIT’s offering.

The SEC is also confirming reports about another broker whose clients experienced the same issue.

In a notice to clients, COL Financial said there had been a “misunderstanding” on the status of its requirements submitted to the Philippine Stock Exchange (PSE) to be permitted for trading AREIT’s securities on its platform. It has yet to receive the bourse’s review, certification and approval, it added.

“Unfortunately, this can take up to sometime next week at the earliest. This means that COL clients will still be unable to buy or sell AREIT shares through our platform in the following days,” it said.

Another brokerage, Abacus Securities Corp., which runs MyTrade Philippines, also explained to its clients that their share orders got rejected because of “miscoordination” between the company, its platform providers and regulators. The issue, though, has already been resolved, it claimed.

“As a gesture of commitment to you, we will honor the rejected orders at the price where it should have been done,” it said.

The trading mishap was a “black eye” for the country’s capital markets, Ismael G. Cruz, president of the Philippine Brokers & Dealers Association, told Finance Secretary Carlos G. Dominguez III. He relayed to the Finance chief a copy of the notices, which were shared with reporters.

“I have been in contact with the SEC and fully support their investigation on this issue,” Mr. Dominguez said.

The SEC said its Markets and Securities Regulation Department is on top of the issue.

“Rest assured that the Commission shall take appropriate actions toward the resolution of the matter at the soonest time possible in the interest of the investing public,” it said.

The SEC reminded trading participants to fulfill a list of requirements to become eligible REIT securities traders with the PSE, complying with its amended REIT Listing Rules.

It also noted the PSE’s Broker Eligibility Guidelines to Trading REIT Securities which states that investors must record their securities ownership under a Name-on-Central-Depository (NoCD) arrangement.

Moreover, registered salesmen are mandated to undergo training before they are permitted to deal in REITs.

On Thursday, AREIT, the country’s first REIT, debuted in the local bourse.

It offers a portfolio of three office buildings in Makati City: the 24-storey commercial building Solaris One, mixed-use development Ayala North Exchange and the five-storey commercial office McKinley Exchange. — Adam J. Ang

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Shares in Ayala-led AREIT tumble in market debut

August 14, 2020 | 12:31 am [ bworldonline.com ]

AREIT, Inc. the first Real Estate Investment Trust (REIT) in the country, listed its shares in the Philippine Stock Exchange (PSE) on Aug. 13. In photo are: Ayala Land, Inc. (ALI) President and CEO and AREIT Director Bernard Vincent O. Dy; AREIT President and CEO Carol T. Mills; ALI CFO and Treasurer and AREIT Director August D. Bengzon; AREIT Chairman Jose Emmanuel H. Jalandoni; Securities and Exchange Commission (SEC) Chairman Emilio B. Aquino; PSE President and CEO Ramon S. Monzon and SEC Commissioner Ephyro Luis B. Amatong. Photo courtesy of PSE

SHARES of Ayala-led AREIT, Inc., the country’s first real estate investment trust (REIT), tumbled in its market debut on Thursday.

AREIT’s shares closed 7.78% lower at P24.90 apiece from its offer price of P27, while the Philippine Stock Exchange index (PSEi) closed 1.71% higher on Thursday.

Philstocks Financial, Inc. Research Associate Piper Chaucer E. Tan said there were “some technical issues with the brokers,” which contributed to the slump in AREIT’s share price.

“And also, the market was followed by uncertain sentiment. I think that the price discovery towards AREIT factored in also to the drop in share price,” he said.

At the listing ceremony, Finance Secretary Carlos G. Dominguez III said Ayala Land, Inc.’s (ALI) REIT public offering signals that the market is ready to resume business after the challenges brought about by the coronavirus pandemic.

“This public offering is a strong vote of confidence in our good economic prospects and in the resiliency of many of our industry sectors, some of which will be occupants of ALI’s REIT properties,” Mr. Dominguez said.

“It shares in the optimism that, notwithstanding the global economic downturn today, the Philippine economy has strong fundamentals to rise quickly from the devastation brought about by the global health emergency,” he added.

AREIT’s portfolio consists of three office buildings in Makati City: 24-storey commercial building Solaris One, mixed-use development Ayala North Exchange and five-storey commercial office McKinley Exchange.

“This global pandemic has indeed plunged the world into a recession. However, the Philippine capital markets are still looking hopeful with the introduction of the REIT as a new investment product,” Securities and Exchange Commission Chairman Emilio B. Aquino said.

Mr. Aquino said he hopes there will be a “capital boom” in 2021. — Arjay L. Balinbin

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Companies seen to prefer offices within townships amid pandemic

August 11, 2020 | 12:03 am [ bworldonline.com ]

COMPANIES are increasingly looking to set up offices in townships, which also offer residential and commercial components. — PHILSTAR/MICHAEL VARCAS

TOWNSHIPS will be the preferred locations for offices as employers try to keep their employees in close proximity, a real estate consultancy firm said.

Lobien Realty Group (LRG) expects some recovery when business returns, even after the pandemic prompted many companies to put expansion plans on hold and Philippine Offshore Gaming Operators (POGOs) give “mixed signals” on their operations.

Total office supply declined to 751,000 square meters (sq.m.) from 1 million sq.m. in the second quarter of 2020 compared to the same period last year. The available supply declined to 378,000 sq.m. from 526,000 sq.m.

Half were leased out in the second quarter of 2020, compared to 47% in the same period last year. Vacancies decreased to 5% from 7.31%, while average rent rose to P1,195 per sq.m. from P1,110 per sq.m.

The company expects office space demand to recover by the end of the year, if the pandemic is contained within the second half.

Demand for office spaces last year mostly came from POGOs and the outsourcing industry.

POGOs occupied 36% of Metro Manila office spaces, taking up 1.16 million square meters of total office space or 10% of total leasable office stock in the country before the pandemic began. By June, five licensed POGOs shut down operations.

“These POGO operators are estimated to account for 11% of the total of 45 companies that are actively operating in the country. The travel restrictions imposed by both the Philippines and China will result in a slowdown of office take-ups from both POGOs and traditional occupiers,” LRG said.

The outsourcing industry still prefers the Philippines, the realty group said, anticipating more investments outside Metro Manila after an outsourcing business group partnered with the government to release their “Digital Cities 2025” or priority cities for investments.

There is 16% vacancy in leasable office spaces in business districts in the provinces.

Office supply in these areas rose to 307,000 sq.m. in the second quarter of 2020 from 297,000 sq.m. last year. The percentage of space leased fell six percentage points to 21%, with average rent rising to P620 per sq.m. from P551 per sq.m.

The company said that there is more demand for flexible workspaces, especially for startup companies and freelancers.

“They are often in prime locations in competitive areas, they are flexible in agreement periods, they offer a sense of community and crowd support services, they are aligned with the changing tech and business environment, and they provide access to pay-as-you-use facilities.” — Jenina P. Ibañez

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POGO exodus pulls Manila office demand 74% lower in first half

August 4, 2020 | 12:07 am [bworldonline.com ]

THERE was zero office demand from Philippine offshore gaming operators in the second quarter. — PHILIPPINE STAR/MIGUEL ANTONIO N. DE GUZMAN

By Denise A. Valdez, Senior Reporter

THE DEMAND for office space in the country dropped 74% in the first six months of 2020 as Philippine Offshore Gaming Operators (POGOs) began their exodus amid the coronavirus pandemic.

In a recent report by real estate consultancy firm Leechiu Property Consultants (LPC), POGOs were found vacating 48,000 square meters (sq.m.) of office space from March to June, making up 54% of the 89,000 sq.m. of vacated space during the period.

POGOs also recorded zero demand from April to June. LPC tallied 77,000 sq.m. of transactions during the period, most of which were from the Information Technology and Business Process Management (IT-BPM) sector with 42,000 sq.m. of demand.

This resulted in a drop in first-half transactions to 234,000 sq.m. this year from 885,000 sq.m. last year. The composition was also disrupted as POGOs shrunk to 12% of the pie from 40% last year. IT-BPM made up 40% of the composition this year from 41% last year, and other occupiers such as traditional offices grew to 48% of the pie from 19% last year.

LPC is adjusting its yearend forecast to a range of 600,000 to 800,000 sq.m. of office space demand, down from its initial estimate of 800,000 to 1 million sq.m. office transactions.

Despite this, LPC President and CEO David T. Leechiu said the Philippine office market remains “unique in the world” for continuing to record new leases, albeit much less from last year.

“The Philippine office segment has not yet entered a point of contraction,” Mr. Leechiu said. He added support is needed for both the IT-BPM and POGO sectors to fuel the growth of the property sector.

The firm noted the growth of POGOs was stunted by tax regulations and restrictions in movement, as the government put parts of the country in lockdown since March to contain the coronavirus outbreak.

But LPC expects an office space demand of 482,000 sq.m. in the pipeline, of which about 68% will come from the IT-BPM and POGO sectors, and about 323,000 sq.m. will be in Metro Manila.

“The sustained growth of these sectors will allow us to bounce back from this pandemic swiftly. We need as many employers as possible to help our economy,” Mr. Leechiu said.

On the residential segment, LPC said it drew activity from transactions in the Metro Manila condominium market, but no new projects were launched in the second quarter due to quarantine restrictions.

LPC said developers are on a wait-and-see mode as unit sales have been dropping quarter on quarter, shrinking 36% for the January-to-March period, and remaining flat with a 0.2% uptick in April-to-June.

There are now only 23,379 condominium units in Metro Manila’s supply pool, 86% of which are from the middle-income bracket.

The firm said sales from most segments of the middle-income bracket have been declining in the second quarter, due to job losses both locally and abroad. It was offset only by the upscale segment, which posted a sales growth of 35%.

LPC also said large developers remain firm about pricing levels for both primary and secondary units, despite the softening of capital values in central business districts by 5% to 10%. They instead offer cash discounts, lower reservation fees and down payments and flexible payment schemes to spur demand.

“Most owners in high-end gated villages appeared to be holding on to their properties for capital preservation purposes. Owners who do sell at a discount would likely be in need of immediate cash,” it said.

As for the tourism sector, LPC said recovery is expected to come from domestic travelers, mostly in the Luzon area where destinations can be reached by land.

“Despite the looming negativity, LPC is optimistic that the Philippines will have a rapid economic recovery due to a number of simultaneous and conspiring cocktail of virtuous events within the next 6-12 month,” it said, naming infrastructure projects and the continued deflation of interest rates, among others.

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PHirst Park Homes expands in Pampanga

August 4, 2020 | 12:04 am [ bworldonline.com ]

PHIRST PARK HOMES, INC. (PPHI) is expanding in Pampanga, after it bought a 10-hectare property in Magalang.

PPHI President Ricky M. Celis said the company decided to launch its seventh horizontal housing development after seeing strong sales in the first half of the year.

“PHirst Park Homes has maintained its sales momentum and is quite pleased by the market’s demand for house-and-lot units. Our positive sales for the first half of 2020 sets us on track with our next development launch, which will be our second project in the north and seventh in total,” he said in a statement.

The first phase of the new project will offer over 500 house-and-lot units.

Despite the pandemic, Mr. Celis noted there is robust demand for affordable housing “because families are prioritizing home ownership as a prime essential, and there is renewed interest in living in safe, less congested communities outside of Metro Manila.”

The joint-venture company of Century Properties Group and Mitsubishi Corp. posted reservation sales of 1,548 units worth P3.12 billion for the first six months of 2020. These cover sales from PPHI’s six projects.

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