Is PH real estate ready for Asean integration?
Can the Philippines compete with its next-door neighbors in the Asean?
Property analysts are one in saying yes, but they also admitted of the presence of some major hurdles on the way.
Property analyst Enrique M. Soriano III, Ateneo program director for real estate and senior adviser for Wong+Bernstein Business Advisory, said: “No doubt, the Philippine real estate industry can compete with the best of the Association of Southeast Asian Nations. Technological innovation and best-in-breed designs make the [Philippine] sector at par with the league leaders [Malaysia, Indonesia and Singapore]. The stakeholders [aside from the end-users] are those in the financial sector.”
He added that in Singapore, “real estate is being traded much like a financial commodity. Risk and return and rental yields are predictable.”
Soriano, however, did see some obstacles. He said: “In the Philippines, we are still in the infancy stage. Growth via financial intermediaries is still in the start-up phase. Providers of capital are available, but a global event can trigger a pullout of funds. Another major hurdle—very fundamental—is LGU-dictated land use, which is a bane for private developers. National policies and structural issues in the national level ranging from land valuation to bureaucracy and graft are the biggest enemies in the sustainability of the real sector.”
During the March 9 introduction of the Asia Pacific Real Estate Association (Aprea)-Philippine chapter officers at the Event Center of Century City Mall, the association reiterated its advocacy of increasing the competitiveness of the country’s real estate sector in preparation for Asean integration, or the so-called Asean Economic Community (AEC).
The March 9 event also introduced Aprea’s new chair Jose EB Antonio, CEO of Century Properties, and other officers: vice chair Jeffrey Lim (SM Development Corp. president), membership committee head Michael de Guzman (Macquarie Group of Companies managing director), sustainability group head Rick Santos (CBRE Philippines chair), regulatory committee head Francisco Lim (partner at Accra Law), and programs and events committee head Arlene Magtibay (Robinsons Land senior vice president).
The group said it would take advantage of the Philippines’ global popularity as “one of the world’s healthiest emerging markets” to push its 2015 goals and priorities.
Antonio declared that Aprea Philippines “will work hard to promote to push the country’s development agenda globally, and serve as the platform for bringing Philippine real estate to a bigger form.”
Among other actions, the group will share up-to-date industry information and will conduct research to determine the best cities for real estate businesses. It also targets the next regional Aprea conference to be held in the country in the next few years, and promotes itself to young industry players to seek possible joint venture initiatives.
Antonio said the initiatives of Aprea-Philippine chapter “come at the most opportune time in the real estate industry as there is so much positive outlook on the local property landscape.” He added that “many economists predict the Philippines will become the top performing economy in Asean this year, according to a Colliers Philippines report. The developments are moving out of Metro Manila and expanding to key provinces with new infrastructure and enhanced accessibility, industrial parks, offices, retail and housing strong because of renewed interest in manufacturing, the BPO [business process outsourcing] boom, increase in employment and consumer spending power. Destination developments with leisure, entertainment and tourism components are emerging.”
Santos said one of the hurdles the government can help the sector with is to accelerate the phase of public-private partnerships.
He cited the upcoming Asia-Pacific Economic Conference (Apec) 2015 as good incentives for the government to showcase all the positive developments in the Philippines, including the refurbished airports and the added infrastructure to decongest traffic. Public-private partnerships toward an improved educational system would also help make sure that as the population grows, children get the best education, with the curriculum aimed in sectors where it would be easier to get jobs.
As an example, Santos suggested the training of more students in engineering subjects, to encourage young minds to pursue software engineering and development.
Antonio, CEO of the listed real estate company Century Properties Group Inc., succeeded Jaime Ysmael, senior vice president of Ayala Land Inc., for the Aprea chairmanship.
Ayala Land, Century Properties, Megaworld, Robinsons Land, SM Development Corp. and Vista Land are Aprea-Philippine chapter members.
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