Developers bullish of sustained growth in PH real estate

After a relatively positive performance in the past decade, the Philippine real estate industry has, without a doubt, defied the odds.

If the brisk sales of local property developers were to be an indication, then it can be rightfully said that the real estate industry has already regained its former glory, is well back on its feet, and is now contributing to the country’s economic growth.

Analysts and industry players throughout the years have been one in saying that the good years are back, and have fearlessly remained firm in their belief that the growth surge currently being enjoyed by the country will spill over to next year and continue for several more years.

The question now is, what’s next? How can property developers cope with the growing demand from the market? And what lies ahead for the real estate industry in 2017?

As the year 2016 now draws to a close, there seems to be no signs of slowing down as Philippine developers continue to offer projects that do not only continuously redefine the norms of this industry—and thus upping the ante, much to the advantage of the consumers—but have also kept the industry at par with its counterparts globally.

Inquirer Property interviewed some of the country’s most esteemed developers to know more about how they fared in 2016, as well as their expectations and fearless forecasts for 2017.

Rockwell Land Corp.

The Lopez-led firm, Rockwell Land Corp. continues to break new grounds and raise the bar to redefine premium living in the Philippines.

Even with the proliferation of other high-end property developments, Rockwell remains a cut above the rest in terms of quality, design and personalized customer service among so many other pluses that contribute to that so-called “Rockwell magic.”

“More than creating structures, we at Rockwell offer to our clients only the best to help them live a lifestyle which they truly deserve. For the next years, we are optimistic because there will always be demand for quality condominiums as we expect the economy to further soar given our very strong economic fundamentals. Rockwell always aims to go beyond expectations with the promise of curated service and good investment options,” said Rockwell Land SVP Valerie Jane Lopez-Soliven.

“Rockwell is known to provide quality living with services that extend to after-sales. We help them take care of their investment with our in-house leasing and property management teams ensuring their property to remain 100 percent Rockwell—the promise of safety, security and quality lifestyle. Our current pre-selling flagship project, the Proscenium offers exactly this,” Soliven said.

Rockwell Land currently caters to an upscale clientele—affluent individuals and families who are well-educated, extremely successful, and know what they want.

Its residential condominium developments included The Manansala, Joya Lofts and Towers, One Rockwell, Edades, 32 Sanson and The Grove by Rockwell. In the works now would be what the company has dubbed as “the greatest Rockwell yet”—the five towers of The Proscenium.

Currently, Proscenium units are priced P40 million and up, while penthouses could go as high as P170 million. Proscenium buyers are comprised mostly of entrepreneurs and professionals aged 45 to 60 years. For the bigger cuts, almost 15 percent of the buyers are foreigners.

8990 Housing Development Corp.

Throughout its first decade, 8990 Holdings has long been changing the game in mass housing by debunking the myths of shadiness, low margins, and risky clients.

For 8990 mass housing has always been about the people and not the houses. It is no wonder then that the company has been doing well, including this year, on the back of rising demand for its projects.

“Sales have been good for 2016 and we are still experiencing strong demand in our market, composed of ordinary working class Filipinos looking for affordable primary residences,” said 8990 Holdings president Januario Jesus Gregorio Atencio III.

“Fifty eight percent of our sales is coming from buyers aged 29 to 35 years old. Young people, particularly, the millennials, are now becoming interested in investment and savings. And for many of them, buying real estate is a good way to save and invest their disposable income,” he added.

And this bullish run, according to Atencio, is expected to spill over to next year.

“I’ve always believed that real estate performance tracks closely with gross national product (GNP) growth. For as long as the country is growing, the praising mood will be optimistic for long term purchases such as real estate,” Atencio said.

“I expect more millennials to buy real estate, specially in the mass housing space as the housing finance environment will continue with low interest rates for housing loans, specially that of the Pag-IBIG Fund. We basically compete with rentals. And so, for as long as monthly amortizations remain close to rental rates, I would expect growth in demand for first time home buyers of primary homes. The principle of ‘why rent when you can own?’ continues to be a viable proposition,” Atencio related.

According to Atencio, 8990 Deca homes is the first and only company to evolve its product from just shelter to wealth creation by incorporating life insurance and mutual fund by paying the same monthly amortization. For the same payment, buyers get three values instead of one: shelter, insurance and investment at no added cost.

“Our Metro Manila projects in Tondo and Ortigas extension, totaling 30,000 units, will be the highlight of next year when we are able to provide condos in great locations with pricing that is low-cost. We aim to be the price leader for Metro Manila condos in 2017,” Atencio concluded.

Sta. Lucia Land Inc.

From a small real estate firm, the Robles-Santos led Sta. Lucia Land Inc. has now become one of the major players in the industry, having developed thousands of hectares covering over 260 projects.

Today, the Sta. Lucia group continues to provide not only standard structures that provide the best value for money, but also developments that uphold family values and raise the standards of living. And this has been the key to ensuring the company’s sustained growth over the past four decades. And the year 2016 is no different.

“The year 2016 is relatively good for us, as we have again likely reached our target. Since 2007, our sales continue to increase and I think it’s partly because of the focus and attention that we give to our projects,” explained SLLI vice president for sales Paul Michael Robles.

“Majority of our buyers, around 80 percent, are overseas Filipino workers. Since we’ve established offices abroad, things have turned for the better. I think it’s really one of the most important factors why we continue to stay afloat,” he added.

Robles admitted that the market, however, has changed a lot and competition has become stiffer more than ever, prompting developers to come up not only with the best projects but also with outstanding selling strategies.

“The market has changed a lot. Competition has become stiff, from the small to the big players. In the provinces, you have the local developers as your competitor as well. I believe that the market has changed a lot as they now expect and demand for more—unlike in the ’90s when the buyers’ main concern then was the location,” Robles explained.

“Buyers now have become wiser and well informed. In Metro Manila, competition is tremendous. That’s why many move out to the provinces, where if you come in first, you have the advantage,” he said.

According to Robles, he expects 2017 to be an interesting year especially for the property sector as more developers move out of the metro and start to bring their expertise to the provinces.

“The trend now is to go out of Metro Manila which is what we at SLLI are doing and what the others have started to do as well. Everyone now goes to the provinces to try and look for other areas to develop.  We also see condominium and condotel developments to be a strong property driver,” Robles related.

The provincial market, Robles further claimed, is seen to remain a driver for growth, especially for SLLI. Other viable projects would be the residential resort development and retail for the recurring income.

“We have created a team whose goal and objective is to lease out our commercial assets, we have a total of about 30,000 has. We would also like to enter the office market and we are now building our first office development which is located inside Sta Lucia Mall complex. Then we will have one in Davao and Iloilo,” Robles concluded.

Double Dragon Properties Corp.

The joint venture between the Tan Caktiong family and Edgar Injap Sia II focuses largely on residential, office and commercial developments.

Double Dragon Properties Corp., through its subsidiary CityMall Commercial Centers Inc. (CMCCI), is now working to build 100 community shopping malls by 2020. The huge potential of this subsidiary caught the attention of the country’s biggest conglomerate—SM Investments Corp.—which earlier acquired a 34-percent stake in CMCCI.

“For 2016 so far we are set reach our income targets, and the largest jump in our business in terms of growth percentage is the uptake on our rental revenues, although substantial jump of our rental revenues from the string of our commercial and office projects will be significantly felt in 2018. This year also marked significant growth in our organization as we have built up our management team. We also looking at our CityMall brand to have notable brand presence penetration towards the end of next year,” said Injap, who currently serves as chair and CEO of DoubleDragon.

“We expect 2017 as a year of our most CityMall openings since as of now we already have 28 simultaneous mall constructions in various provincial cities in the countryside. Next year also excites us because the synergy we have with the Jollibee Group, SM Group and AbsCbn will soon take shape in CityMalls nationwide. It is our dream to make CityMall another brand that will become a source of pride of every Filipino,” Injap explained.

“We also expect the tourism and consumer sector to continue to grow thats why our focus has been on the property side of the consumer and tourism. In general, we will continue to strive in making Double Dragon become stronger and stronger year on year,” he further noted.

Asked how he intends to make Double Dragon’s projects stand out amid the growing number of property firms and developments in the country today, Injap said: “Since majority of our projects are building community malls in different provincial parts of the country, and most of the time CityMall is the first branded modern community mall in that area, it is expected to naturally stand out and serves as a catalyst of economic growth of the specific community.”

“And with the growing millennial new families coming on stream, we believe that CityMall will become their minimum standard,” he added.

In the case of their flagship Metro Manila project DD Meridian Park in the bay area in Pasay City, Injap believes this development will stand out given its prime location, vibrant commercial food retail strip, and well planned complex facilities.

“Another major Metro Manila project we are currently constructing is the 41-storey Jollibee Tower in Ortigas central business district. We believe that it will also stand out landmark among the rest of the structures in the area as it will have full double glazed glass curtain wall and (is targeted) to be a Gold LEED certified grade A building,” he concluded.

Arthaland Corp.

ArthaLand is a Filipino world class, boutique developer of unique, enduring, and sustainable projects. It is building its mark in the Philippine real estate market by developing and managing projects that adhere to the global and national standards in green buildings.

“We just launched Cebu Exchange during the last quarter of the year and we have seen great interest from the Cebuano investing market. We have come at the right time given the high demand for quality, green office space in Cebu because of the region’s vibrant business activities. Vacancy rate in offices there are very low,” said ArthaLand’s  communications manager Ken Lerona.

“We’ve gotten strong interest from home-grown businesses, local investors, buyers from nearby provinces in Visayas and Mindanao, as well as from Metro Manila. Foreign investors have also signified their interest on Cebu Exchange,” he added.

Asked what ArthaLand’s expectations are for 2017 in terms of trends, demand, revenues, and growth drivers, Lerona said: “As a boutique developer, we always focus on quality rather than quantity. We believe that the market is all ready to adopt our philosophy of sustainability and this is where we see the property sector’s direction.”

“Given the continuous expansion of our economy, driven by the growth of provincial markets, we see that the office sector will continue to grow. Other than the IT-business process management sub-sector, we see that traditional businesses are also gearing to expand their footprint, thus requiring Grade-A spaces. We believe that our domestic market’s demand for quality developments will supplement foreign demand for space. We will definitely see growth in 2017,” Lerona explained.

Lerona added that it was important to note that the property sector’s focus on growth areas outside of Metro Manila can become a strong catalyst for further development.

“Areas like Cebu, Iloilo, and other key cities in Visayas and Mindanao offer very rich potential which real estate players can hone. Today, we see developments rising in these areas and we believe that more of these projects will rise in these cities in the next several years,” Lerona explained.

“The key to making real estate more attractive to the domestic market is through continuous innovation. Our buyers and investors are more intelligent nowadays. They are highly educated, well-travelled, and more discerning,” he said.

“If you can differentiate your projects and your brands with added value such as resource-saving green features, that will be a plus factor to the buyers. We can no longer offer the same product over and over again, using the old formula. We have to excite the market with innovative, quality projects continuously,” he further noted.

In the case of ArthaLand, its main differentiator is its faithfulness to its corporate DNA: world-class, boutique, and sustainable. More so the fact that its projects are subjected to the high national and international standards on green building—a fact that has drawn the market’s keen attention on ArthaLand.

“Having our projects registered and certified under the USGBC Leadership in Energy and Environmental Design (LEED) program as well as the PHILGBC Building for Ecologically Responsive Design Excellence (Berde) green rating system gives our investors, buyers, and end-users the comfort that we will always be faithful to our promise,” Lerona related.

“ArthaLand is known for delivering developments with elevated level of design, quality, and sustainability. We will continue to do so in our current and upcoming projects. We already completed Arya Residences. We have strong leasing interest for our office project, ArthaLand Century Pacific Tower which is set to be delivered next year. We received a warm market reception for Cebu Exchange and this is a good indication for us. We foresee that 2017 will be a very good year for ArthaLand,” he concluded.