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News & Press Releases
Ayala exec's advice on buying a home: Look at developer's track record
Rex A. Mendoza, Ayala Land Senior Vice President for corporate sales and marketing, said that in a period of boom, the buying public's experiences can be very good. It can also turn the opposite, cautioning buyers against over-exuberance and being taken mainly by attractive brochures and flashy websites that are full of promises but are short of assurances on the track record of its developers.
Mendoza said it is still most advisable for buyers to put in their lifetime savings and cast their dreams for quality homes with developers of proven track record.
An essential facet to check out is how developers fared when the real estate property was down. Did they finish their projects? If they did, were they on time and was the quality that they promised delivered?
Their fate as corporations during the late '90s, when all of Asia reeled from economic disaster, is a good period to review, he said. In Ayala Land's case, according to Mendoza, that regional financial turmoil was hurdled with integrity.
Today, Ayala Land holds the record of finishing all its residential condominium projects lined up at that crisis period – The Regency and One, Two and Three Salcedo – while the rest halted their ongoing projects. It continues to hold sacred its commitments for timely delivery with utmost concern for customer satisfaction, added Mendoza.
"To stress how much Ayala Land values the trust that is leveled upon it by its loyal customers, it finished the projects still in over-compliance with the structural requirements imposed by government regulations," Mendoza noted.
For the first quarter of this year, Ayala Land and its subsidiaries in residential property development have already booked and closed P2 billion worth of units which is the same level of bookings it registered for the whole of 2005, he cited.
The subsidiaries include Community Innovations, which responds to home needs of young and dynamic urban professionals, and Avida, which provides affordable homes.
A sizable portion of Ayala Land buyers these days are Filipino migrants and overseas workers. They are Filipinos based in the US, Dubai, Middle East, London, Canada and other parts of Europe.
"Unlike the boom of the '90s, the Philippine property sector is now enjoying a broader base of investors, with direct real investments coming from Filipino communities abroad," Mendoza stated.
Thus, it becomes even more crucial for families of buyers, who are the ones who refer the properties available here, to be aware of the importance of choosing reputable property developers to avoid pitfalls and misfortunes with buyers' hard-earned money.
Other factors they have to look at are the developers' concern in meeting the actual needs of buyers in terms of accessibility, security and basic utilities. "At Ayala Land, planning is a vital process to ensure that property designs harmonize with function," Mendoza stressed.
At the same time, it is also noteworthy that Ayala Land communities flourish, as they are near good schools, transport networks, churches, commercial establishments, and leisure and recreational facilities.
BusinessWorld Online Feature
DMCI Holdings Inc.: From construction to building communities
The name behind landmarks like the Cultural Center of the Philippines in Manila and Ayala Tower One in the Makati central business district is expanding its portfolio to building residential communities for the middle income market.
For this focus, listed construction company DMCI Holdings Inc. (DMCIHI) put up a wholly-owned subsidiary, DMCI Homes, last August 2001.
The thrust of DMCI Homes is developing and constructing small middle-income residential communities, with no more than 400 units per community. DMCI Homes also manages the entire community they built, from maintenance to troubleshooting.
"We want to build small communities of not more than 400 residential units per project for if it's big, the residents will not know each other plus a bigger community means higher maintenance costs," said Tet Abad Santos, general manager of DMCI Homes in an interview.
The middle-income housing projects of DMCI Homes include the Lakeview Manors, Morning Sun Townhomes, and the Vista de Lago condominium units (under construction) in Taguig; Hampstead Gardens in Sta. Mesa, Manila; and the East Ortigas Mansions (under construction), which is a mixed residential development of townhouses and condominiums in Pasig City. The housing units of DMCI Homes in these locations cost around PhP1-6 million.
DMCIHI chose the middle income market because in the locations of their projects, like Sta. Mesa and Taguig, the communities are mostly in the middle income bracket and they want their projects to match the market in the community.
Alfredo Austria, DMCIHI Vice President for Business Development, also said that the middle income market has good potentials as shown by studies of economists (see industry report).
"Based on the demographics alone, Metro Manila has around 10 million in population and let's say that 5 percent are in the middle income bracket. That's around a market of 500,000. "
In its 2001 annual report, DMCIHI also reported positive market reactions in their initial projects.
"Based from (sic) the success of our initial middle income residential projects like the Lakeview Gardens in Taguig and Hampstead Gardens in Sta. Mesa, Manila, we expect significant cash contribution to come from housing development," the Annual Report stated.
Mr. Austria said the company had plans to put up small residential communities to complement their construction business but it was not in the near future. He said these residential projects were pushed ahead of time due to the fact that there were lesser infrastructure contracts for the company and they needed to generate cash flow from their land banks and equipment.
"We have a land bank of around 80 hectares in Metro Manila, with bulk of it situated in Taguig. With our land bank and experience in construction, this is a business that we know and in the process of being able to sell our units we are effectively selling our land and getting revenues out of our construction equipment instead of it just depreciating," added Mr. Austria.
"Residential communities are where the market is as most of the sectors are still recovering and foreign investors are not coming in. Also, our construction works have significantly lessened," said Isidro A. Consunji, DMCIHI President in an interview.
Mr. Austria said that DMCIHI plans to utilize its land bank in the coming years by increasing their middle income housing projects. Currently, he said that DMCI Homes is mulling on developing another small middle income residential community in Cainta along Imelda Avenue and a medium rise residential building in Taguig.
EAST ORTIGAS MANSIONS
One of DMCI Homes' ongoing middle-income residential developments is located in a 2-hectare compound in Pasig City along Ortigas Avenue extension and within 30 to 45 minutes of the major central business districts (CBD) like Makati and Ortigas.
East Ortigas Mansions, which is slated to have its first batch of occupants this year and to be completely built by 2004, is a PhP750-million mixed residential development. It will have six buildings that will house five-storey condominium units with floor spaces ranging from 50 square meters to 121 square meters with two to four bedroom units.
It also has a separate cluster wherein 12 townhouses are located with the floor area of the townhouse units ranging from 100-212 square meters.
Mr. Austria said that around 50 units have been sold for the East Ortigas Mansions and 12 units have been sold last December. For 2003, he said he expects around 20 units to be sold per month.
Ms. Abad-Santos said that what DMCI Homes wants for their market is to have condominium living within a subdivision set up.
A three-level clubhouse, that is already constructed, has in it a bar, an entertainment room, billiards, an eatery and a penthouse that can be booked for parties. The clubhouse is situated in the middle of the development.
In front of the bar is a swimming pool for the exclusive use of the residents. Basketball and tennis courts will also be put up inside the residential development.
A multi-level parking facility is also being constructed to accommodate the vehicles of the residents. However, the residents will have to buy the rights for the parking space which is priced at a one time fee of around PhP200,000.
Inside the two-hectare compound are two commercial establishments that are within walking distance. One is S & R price mart, a warehouse grocery establishment and the outlet yard, a commercial strip that will house garments and clothing establishments which will sell at factory prices.
There is also a commercial establishment right next to the compound, the Ever Gotesco mall.
"If the residents want to watch a movie or want fresh food they could just walk to the mall and buy groceries at S & R," said Mr. Austria.
When asked about the traffic problem along the Ortigas Avenue extension which has a lot of commercial establishments, Mr. Austria said that there is traffic all over Metro Manila and what the residents have to do is estimate the time when the traffic flow is light and heavy in the area so that they could plan their travels.
For the entire development, Mr. Austria said that they are expecting around PhP1 billion in income once a majority of the units have been sold.
"We want to stay in the housing segment first and be really good in this market segment as there is currently an oversupply of buildings, the industrial sector has no investments and most investors are going to other Asian countries like China and Vietnam," added Mr. Consunji. - Alab D. Vitug
Contact i-ACT Real Estate @ 864-01-82 for more details
For sale: residential lots on islands built within man-made lake
LUCIO TAN-led Eton Properties Philippines, Inc. is introducing "residential island lots" or leisure properties in man-made islands.
To be located in the 1,000-hectare master planned Eton City in Sta. Rosa. Laguna, the South Lake Village will be an integrated mixed-used township project.
The 150-hectare South Lake, which is the first phase of the Eton City development, will have 18 residential islands surrounded by a 35-hectare man-made lake.
Each island, approximately one hectare in size, will have eight to 12 residential lots of about 1,000 square meters each.
Lots are sold at P10,000 to P12,000 per square meter.
"This will feature the first residential island concept in the Philippines," Eton Properties President and Chief Operating Officer Danilo E. Ignacio said in a briefing yesterday.
He added that South Lake Village would be ready for turnover by June 2009.
Mr. Ignacio declined to disclose how much investments will be infused into the new project. He also would not say how much in revenues are expected from South Lake Village.
Eton City is located along both sides of the South Luzon Expressway, right at the entrance of the existing Eton City Greenfield interchange.
Its master plan was made by Baltimore-based RTKL and NS Mangio & Associates.
"We hope in the future we will develop [Eton City] as a new Makati... This is a long-term project. I don't see this project in total in the next five years. It will likely be a 10-year project," Mr. Ignacio said.
Eton City will also include a central business district, an 18-hole championship golf course with golf village, a country club, a shopping mall, a hotel, a casino and condominium communities.
"Right now, we are in discussion with a number of mall operators who have expressed setting up a mall here," Mr. Ignacio said.
Eton Properties has received a lot of interest from the US and European markets for the project.
Asked whether the company has plans to go to the capital markets to raise money for the projects, Mr. Ignacio said cash was "not a problem with Eton," which is part of the Lucio Tan Group of Companies.
"[A] big advantage for the company is Eton has access to the most extensive land bank in this country — both the land bank of the Lucio Tan Group of Companies and ROPOA [real and other properties owned or acquired] of Philippine National Bank and Allied Bank. We are able to choose locations. Once we know the best demand is, we are able to launch right away a project in those locations."
While property developers are on a lookout for sites in Fort Bonifacio, Eton Properties is taking a different direction.
"There is too much competition. We have plenty of land. We can choose where we want to develop where there is less competition. That is our advantage," Mr. Ignacio said as he noted that the company has properties in Cebu, Calatagan, and Baguio.
Mr. Ignacio remains bullish on the property market this year even if US subprime woes have affected sentiment in the global arena.
"We consciously allocate our resources. I will have more local agents than agents selling for me abroad. We go to a lot of international road shows to have a feel of the market," he said.
Eton Properties is looking at posting a turnaround next year as it starts realizing revenues from its projects.
The 34-storey Eton Parkview Greenbelt and Eton Baypark are sold out while the 41-storey Eton Emerald Lofts is one-third sold and the 31-storey One Archers Place is one-fourth sold.
The company posted a net loss of P112.99 million for the six months ending in October 2007, from P4.74 million the previous year ahead of recognizing revenues from the sale of its projects.
Eton Properties has allocated P10 billion for seven priority projects.