October 22, 2015 10:01 pm/by CATHERINE TALAVERA, REPORTER/ http://www.manilatimes.net/millennials-dictate-real-estate-trends/225127/

MILLENNIALS are now dictating the trend in real estate, industry experts noted during the 4th Asia Pacific Real Estate Investment Summit held in the Solaire Resort and Casino in Paranaque City Thursday. Real estate consultancy firm CBRE Philippines said the country is reaping the benefits of the so-called demographic dividend, or the entry of more able, young people into the local workforce.
CBRE Philippines Chairman Rick Santos said the Philippines has one of the youngest workforces in the world, with the average age of Filipino workers at 23.2 years old, turning the “labor force into the new people power.”

The United Nations Population Fund defines demographic dividend as “the economic growth potential that can result from shifts in a population’s age structure, mainly when the share of the working-age population (15 to 64) is larger than the non-working-age share of the population (14 and younger, and 65 and older).”

Santos noted that the country’s millennials have boosted profits of the Business Process Outsourcing (BPO) companies, which have been keeping the local real estate sector busy. He said the BPO market is taking the country by storm, as an estimated 6 million square meters of office space is added every year. “BPOs are major drivers in building smalls cities,” Santos added. Industry experts say companies worldwide have looked at the Philippines as a favorable investment site, especially for outsourcing some business processes, due to its educated and young workforce.

Ayala Land Hotels and Resorts Corporation’s Al Legaspi said millennials are creating a certain “less is more” trend in the hotel sector.
“Millenials are not after luxury, they’re after connectivity,” Legaspi said. “They are value-conscious. They want to make sure they put their money in things that count.” He foresees that pricing in hotels would be more competitive, since these millennials are looking for cheaper rates. Meanwhile, Regus Philippines Country Manager Lars Wittig said millennials also contribute to the mixed-use trend, as more young people demand more flexible office spaces. Wittig said millennials want accessibility and connectivity, something the mixed-use market is trying to address. He said property firms are now combining office and residential buildings into one development to give residents, mostly the young employees, an option to live near where they work. For the retail industry, Robinsons Land Vice President for Lease Lourdes Alano said the youth-dominated BPO industry “is now fuelling the retail sector.”

She noted that the retail sector is seeing a trend in the 24/7 convenience store chain that caters to the BPO workers, since most of their operations run for both day and night.

Other panelists who were a part of the discussion were: DMCI Homes Chief Financial Officer Joseph Ramil Lombos, KMC Mag Group Managing Director Michael McCullough, Trakomatic Chief Operating Officer Shaun Kwan . Lamudi Philippines Managing Director Jacqueline Van Den Ende was the event’s moderator.

Photo Credits:  www.retail-insider.com
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October 19, 2015/ By: Daxim L. Lucas/ http://business.inquirer.net/200917/curb-your-enthusiasm

FEW LOCAL tycoons epitomize the concept of “guarded optimism” the way Manuel Villar does today.
The head of the Vista Land and Lifescapes Inc. property empire says he has learned to curb his enthusiasm, even when the economy is roaring along.

The painful lessons of the 1997 East Asian financial crisis are still fresh in his mind.

The former senator gave the Inquirer an interview during last week’s 2015 Forbes Global CEO Conference and was unusually candid and introspective about his ups and downs over the past few decades—ups and downs that have seen him become one of the country’s richest businessmen in the 1990s, on the brink of bankruptcy in the following decade, and back up among the country’s wealthiest today.

Indeed, Villar’s Camella Homes dominated the real estate scene in the 1990s with its affordable housing communities sprouting all over the country.

But the sharp peso devaluation in the late 1990s revealed a hidden weakness: The property giant was built on short-term dollar loans.

The drop in the peso’s value doubled the company’s debt load overnight and the accompanying spike in interest rates made the company unable to service its debt.

The result was a virtual bankruptcy, with creditors foreclosing on its assets left and right.

Villar says he has since learned to be more conservative.

“The [financial] ratios are important,” he tells the Inquirer. “You have to watch your ratios.”


Youth enthusiasm
And he is the first to admit that he was almost done in by his youthful enthusiasm for rapid growth decades ago.
“You have to be careful,” he adds, “Sometimes, you enjoy yourself too much, like in land banking for example. It can be a trap. You get to buy a lot of cheap properties. You keep on land banking. Then before you know it, you’re already loaded with too much debt. When the downturn comes, you get hit.”

With his thumb supporting his chin and his forefinger rubbing his temple, Villar pauses and says: “Now, I’m more cautious.”

He is particularly cautious about taking on debt—the very thing that almost wiped out his business empire in the late 1990s and early 2000s.

When speaking about debt, his volume goes down a notch and his words become more measured. He chooses his words more deliberately.

“At all times, you have to be liquid,” Villar says. “At all times, your debts have to be long term. There are rules. Bonds should be long term.”

And he reminds us that short-term liabilities—though they are temptingly easy to take on —can be silent killers when your company is struggling on the ropes.

“You should stay away from one-year-to-pay debts. Stay liquid and maintain a healthy debt-to-equity ratio,” he says, then adds: “There are standards [to follow]. But you tend to neglect them when you are a young entrepreneur.”

Then another reflective pause: “When you’re new, you forget these things. Then you begin to blame other people.”
Today, Villar—whose net worth is valued by Forbes at $1.57 billion—is no longer new to the wise ways of business. Not by a long shot.

But the businessman, reinvigorated by the success of his business endeavors in recent years, says it feels like he’s “only just begun.”

His publicly listed flagship firm, Vista Land and Lifescapes Inc., has a market capitalization of P45 billion and is sitting on undeveloped real estate stock (its so-called land bank) of at least 2,500 hectares nationwide —land that he says will be developed not just into housing developments, but fully functioning communities with commercial developments like shopping malls, schools and hospitals.


Bright prospects
“We are way past just the housing business now,” he says, his tone instantly becoming livelier and more excited when talking about his current activities and prospects.

“We have condominiums, malls and retailing. My son is into the water industry. We have lots of other business like schools and we’re going into hospitals. I’m growing this business,” he says.

He declined to reveal further details about his push into healthcare, saying only that he’s putting up a hospital “somewhere along Daang Hari,” referring to the road connecting Muntinlupa City to Bacoor, Cavite—a route that bisects many of his most valuable landholdings.

“For me, my platforms there are the communities,” he says, explaining that his new business philosophy is no longer about just selling housing units, but making sure that these communities thrive by surrounding them with the facilities they need to build a strong and healthy environment.

Indeed, it is a far cry from the old business model where a real estate developer would sell you a home, then leave you to your own devices.

“It’s integration. And at the same time, you improve your service to your clients,” Villar explains.

So given his business empire’s near-death experience several years ago, is the businessman sensing any chinks in the armor of the rapidly growing Philippine economy?  Is he worried about any surprises around the corner? No.  “I’m very optimistic,” he says. “In fact, the real estate industry and real estate companies are a lot stronger now.”  No repeat
“I don’t see [a repeat of 1997] because we’re all very alert,” Villar adds. “In fact, even the central bank is a bit paranoid (by imposing many restrictions on real estate lending). Sometimes, we feel that they’re too paranoid, but at the end of the day, I guess that’s ok, too.”  “They compel the banks to be strict, and because the banks are strict, you are compelled to be conservative,” he says, describing how fear of a repeat of 1997 has gripped the real estate business today.

Villar’s business concerns today can be found in 92 cities and municipalities, including many of the smaller ones where larger real estate developers fear to enter—something that doesn’t bother him, thanks to strong ties with local government officials developed during his many years as a politician.

Overall, Villar says he is optimistic about the country’s prospects regardless of who ends up running it in 2016 and beyond.
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Optimism and conservatism —a good combination.

BATAAN -- Bases Conversion and Development Authority (BCDA) head Arnel Casanova said the Philippines needs to build a new city outside Metro Manila.

Casanova stressed this during his speech at the teambuilding activity of members of the Anvil Business Club, an association young Filipino-Chinese entrepreneurs, at the Anvaya Cove Beach and Nature Club in Morong, Bataan Friday night.

The BCDA president and chief executive officer introduced the Clark Green City (CGC) to the business group as an alternative to decongest Metro Manila and spur economic development in the entire Luzon island.

"We really need a new city and this is an opportunity for us to really build it properly," Casanova told the Anvil members.

The Clark Green City is a 9,450-hectare master planned property within the Clark Special Economic Zone, approximately half the size of Metro Manila, eyed to be the country's first smart, green, and disaster-resilient metropolis, according to Casanova. 

He said the CGC is expected to break ground in 2016 and is another flagship project of BCDA.

"Clark Green City will certainly be one of the top in the list of alternative urban centers that will lead to an enhanced equitable distribution of development across the country," Casanova said.

At full development, the green city will have some 1.12 million residents, 800,000 workers and contribute a gross output of approximately P1.57 trillion per year to the national economy or roughly four percent share in the county’s Gross Domestic Product (GDP).

The DPWH (Department of Public Works and Highways) will implement the construction of two access roads leading to the CGC, with an initial funding of P200-million, and is expected to be completed within the year.

The road projects will include an initial two-way lane and will provide better accessibility that will subsequently increase the property’s value, economic potential and attractiveness to investors.

One of the city's access roads will stretch 2.5 kilometers from MacArthur highway in Tarlac.

The other project will extend 15 kilometers to link the Clark Freeport Zone and the Clark International Airport to the CGC. It will also connect to the existing Tarlac-Zambales road that leads to the Capas-Botolan road.

Lone bidder Filinvest Land, Incorporated submitted a valid bid with P160-million on September 8 and bagged the right as the joint venture for the development of an initial 288-hectare property inside the Green City.

The National Economic and Development Authority said the P200-billion estimated cost of building CGC will be developed over a 50-year period through the Public-Private Partnership (PPP) scheme. 

National leaders, as well as local businessmen based in Pampanga, have sought the conduct of a serious and comprehensive study on the proposal to decongest Metro Manila not only to ensure growth in other regions but also as a disaster mitigating strategy.

The future development of CGC, which will have five districts -- the government district; central business district; academic district, agri-forestry research and development district; and the wellness and eco-tourism district -- may well be the focal point in plans to decongest the metropolis leading to an enhanced equitable distribution of development across the country.

The promotion of CGC is both timely and imperative if seriously included as a new metropolis that will also serve as a crucial disaster mitigating strategy, said Casanova. 

A decongested Metro Manila will decisively prevent a catastrophic aftermath of a major calamity that may incur tens of thousands of casualties and trillions of pesos in economic losses.
​
"If plans to decongest the metropolis will push through, the Clark Green City will certainly be one of the top in the list of alternative urban centers that will lead to an enhanced equitable distribution of development across the country," the official added.



By Reynaldo G. Navales/http://www.sunstar.com.ph

October 3, 2015/ By: Tessa R. Salazar/  http://business.inquirer.net/200161/vertical-horizontal-developments-to-end-2015-in-contrasting-styles#ixzz3nXye555z

The last three months of the year is crucial in real estate transactions. Inquirer Property has asked property analysts what buyers and investors should watch out for in fourth quarter transactions.

Julius Guevara, Colliers International Philippines’ director for research and advisory services, said: “What investors should watch out for during the last three months of 2015 would be an increase in interest rates. The US Federal Reserve was indicating that they would finally increase rates this year as the US economy improves, but has again deferred that decision to December because of the devaluation of the yuan and continued economic malaise in Europe. Homebuyers should make the decision now in order to lock in on historically low rates.”

Guevara told Inquirer Property that “condo sales in Metro Manila have continued to slide, falling another 23 percent during the first 6 months of the year compared to the same period last year.”
Enrique Soriano, Ateneo program director for real estate and senior adviser for Wong+Bernstein Business, said that “performance of the (property) sector will depend on the different asset classes.”
“Overall, the residential segment will continue to grow, notably in the horizontal market. However, we are seeing signs of property pressure on the mid-priced condo market as investors are wary of the growing concern related to the perceived oversupply in the Makati and BGC (Bonifacio Global City) areas,” said Soriano.

Guevara said: “While total condo sales almost reached 40,000 units in 2014, we expect that sales would be in the low 30,000 level by the end of this year. On the other hand, sales of horizontal projects in the fringe provinces around Metro Manila have done better, with unsold inventory levels improving during the first part of the year. If the condominiums slated to be completed within the next five years in the major CBDs (central business districts) are completed on time, we will see a jump in condo stock of around 58 percent. For this year, the increase would be around 13 percent.”

He added: “This will definitely affect rental rate growth and cause an increase in vacancy rates. However, the worsening traffic congestion issues have convinced some to rent condos in the CBDs during the weekdays and just go to their actual home in the suburbs in the weekends, so this demand may taper the effect of the increase in supply.”

Claro dG Cordero, Jones Lang LaSalle Philippines Inc. associate director and head of research, consulting and valuation, said: “We do not foresee any major shocks to the property sector, hence, rental rates and capital values will register positive growth on back of healthy demand from the various drivers of growth—BPO/O&O expansion and new entrants, remittances from overseas Filipinos and arrival of tourists.”

“With an expected seasonal increase in level of remittances coming from overseas Filipinos in the last quarter of the year, we may expect to see some growth in residential sales, as well as increased retail sales/revenue for retailers and shopping malls,” said Cordero.


Demand in Q3, sale in Q4
Monique Pronove, chief executive officer of Pronove Tai International Property Consultants, said: “Seasonally, the fourth quarter is always a very active time in terms of sales and leasing transactions. For the office market, it is our experience for the past 13 years that demand picks up by the third quarter where inspections are conducted and business cases are submitted. Usually at the start of the fourth quarter, decisions are made to buy or lease, then negotiations take place and come November and December, contracts are signed.”

“It is no different this year, although the number of transactions has not been as robust as it was in 2013,” observed Pronove.

“The office and leisure asset classes and the premium or high-end residential segment will continue to experience steady growth in the tail end of 2015,” said Soriano.
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Guevara said: “For the office sector, demand from the BPO industry continues to be strong, taking up most of the newly constructed space. Vacancies will continue to be tight in Makati CBD and Ortigas Center due to the lack of new supply, but an increase in office stock in Fort Bonifacio by around 214,000 square meters of new space by the end of the year may result in an increase in vacancy in that area.”