Real Estate Innovation and Market Trends 2014

I have observed a significant demand for industrial, manufacturing and warehouses. The industry sector, on my analysis, will outpace in terms of growth the other real estate sectors.

In businesswordlonline.com, reported that Real estate in the Philippines attracts foreign direct investments.

A year of strong economic growth and high foreign direct investment (FDI) in the Philippines has set the scene for a wave of new real estate activity during 2014.

Growing demand from the business process outsourcing (BPO) industry, rising rents, a construction boom and a substantial increase in foreign remittances will all play a part in driving the sector’s expansion. A move by the banks to rein in lending, meanwhile, should help allay concerns that a real estate bubble could be forming.

The Philippines’ property market has been buoyed by the country’s strong economic performance. Annual GDP growth hit 7.2% last year, exceeding both the government’s targets and many analysts’ expectations, while FDI for the first eight months of 2013 reached $2.8 billion, up 25.4% on the previous year. Foreign remittances, meanwhile, peaked at an all-time monthly high of $2.06 billion in November 2013, according to the Bangko Sentral ng Pilipinas (BSP).

Building work, in particular, is booming, sparked by rising demand for residential and office space, especially in Metro Manila. Real estate and construction activity combined now account for one fifth of the Philippines’ economy, edging closer to the manufacturing sector.

The Philippines Constructors’ Association listed 24,400 private projects in the first quarter of 2013, with data showing that residential buildings made up over 70% of the ventures.

A shortage of housing is a major problem for the Philippines. According to a report compiled by the Subdivision and Housing Developers Association, the national housing backlog stood at 3.9m units in 2013, with data suggesting it could rise to 7m during the next 16 years. Reconstruction efforts in the wake of Typhoon Haiyan will also boost construction work and push up foreign remittances.

Meanwhile, the expansion of the BPO industry has created high demand for new office space. Manila placed second on investment advisory firm Tholon’s 2014 ranking of top BPO destinations, while Cebu City ranked eighth. Several other municipalities, including Davao, Santa Rosa, Laguna, Iloilo and Baguio, made the top 100.

The BPO industry generated $13.3 billion in export earnings last year, according to BSP figures, notching up 15% growth, with the central bank forecasting a further expansion of 15% in 2014.

However, top real estate developers are venturing into non-traditional real estate projects. In news on businessmirror.com, written by VG Cabuag last February 23, 2014, Ayala Land Inc. said it will focus on businesses that provide recurring income for the company, such as supermarket, shopping center, hotel and hospital ventures as it seeks to gain more stability in the years ahead.

Ayala Land President Antonino Aquino said for the rest of the year, the company will finish what it had lined up, mainly developing properties from the ground up and acquiring more property to increase its land bank.

“We want to have a balanced growth. We will keep on investing on the recurring part to give us far greater stability,” Aquino said.

Its supermarket venture will be handled Puregold Price Club Inc., the convenience stores under the Family Mart brand that is being operated by Japanese conglomerate Itochu Corp. and the hospital venture will be handled by the Mercado Hospital group.

“For our horizontal development, we will be a bit more on Nuvali-types. Probably in places like Pampanga, Bulacan and Cavite,” Aquino said, adding that it will continue its vertical developments.

Last year the company earned a record P11.74 billion in net income, some 30-percent higher than its P9.04-billion profit recorded in the previous year.

Ayala Land is also involved in manufacturing industrial parks, power generations and infrastructure projects.

Another top developer is the SM Prime Holdings, aside from malls and residences, SM Prime owns Tagaytay Highlands an upscale residential development and golf resort, and also owns Pico de Loro Cove, a large-scale ecotourism and leisure project. The company has hotels in Cebu, Davao and Manila and convention centers in Taguig and in the latter two destinations.

SM Prime Holdings is involved also with reclamation, infrastructure projects, and Health Care especially ambulatory clinics, while SMDC is involved in infrastructure, roads and bridges construction, and power generation.

We, Real Estate Practitioners should be innovative and creative and must try to become successful, but more important, or rather, to become persons of value. “Success” is not always assessed or measured in monetary terms, but by its fruits of service to others, and the Worth of our Work, Family Life and Good, Prestigious relationship with All.

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