Century Cites Strong End-User Demand
MANILA, Philippines - Publicly-listed property developer Century Properties Group Inc. said the strong and sustained sales of its condominium units over the last two years are indicative of a continuously resilient real estate market, fueled largely by legitimate end-user demand.
"This is one of the strengths of the Philippine property industry. The demand is driven by our 11-million strong Filipino expatriates, coupled by a growing local market with increased purchasing power because of favorable economic conditions," said Century's Co-Chief Operating Officer and Managing Director Marco R. Antonio.
Century Properties actively markets its residential and commercial properties internationally. For the 12-month period of 2011, the company reported a 53-percent increase in sales to P4.70 billion from P3.07 billion in the same period in 2010. This contributed to the firm's triple income growth of 382 percent to P866 million in 2011 compared to P180 million in 2010.
For the first half of 2012, Century's pre-sales stood at P10.7 billion, representing an 18 percent growth over the first half of 2011. This already represents 54 percent of Century's P20-billion 2012 full year pre-sales target, hence its continued bullish outlook on the property industry.
The 26-year-old company, known for innovative and branded developments, recently announced its diversification plans to cater to the affordable market by boosting its portfolio with projects in key cities outside Metro Manila. In July, it launched the P4.1-billion Residences at Commonwealth by Century in Quezon City, the first development in this category. Antonio said this is a conscious move of the firm to cater to the full spectrum of Philippine property buyers.
"Whereas other countries experienced a property glut, we are confident that the Philippine property market will remain healthy. Residential unit purchases here are non-speculative because majority of the buyers are end-users. Compared to other Asian countries like Singapore or Taiwan, the Philippines still has low homeownership rates, hence the real demand," Antonio said, referring to a report by the investment banking group Credit Lyonnais Securities Asia that the Philippines still has a home ownership rate of below 60 percent.
He added: "Our sales mostly come from Filipinos working overseas - the main drivers of our growing middle class. Majority of them are first-time home buyers. Those who migrated to other countries on the other hand save up to buy homes for their families in the Philippines, while others get a condo unit in the city to have vacation homes when they come for a visit. When they return to work abroad they lease out their units and earn rental income."
The Philippines' economic growth is also spurring residential property demand from the local market. The fundamentals are strong, making housing purchases not just attractive but also attainable.
The business process outsourcing (BPO) industry and the increased spending of the government and private sector are creating more high-paying jobs. The BPO industry employed 638,00 people and grew by 22 percent in 2011, according to recent reports by the Business Process Outsourcing Association of the Philippines.
"More Filipinos are experiencing financial independence and they are more attracted to the proposition of paying for an amortization of P6,000 to P12,000 a month, rather than spending the same amount to rent out a place," Antonio pointed out.
In the Philippines where most residential projects are offered at lower pre-selling prices, the standard down payment of 20 to 30 percent of a property's total contract price can be stretched over the construction period. The balance upon turnover can be settled through a housing loan, which is still affordable as the banking industry's interest rates remain at their lowest at 5 to 8 percent, and loan takeouts can be payable over a period of 20 years.
The overall optimism in the Philippines is also attracting foreign nationals and investors to its property market. Century said it is getting non-Filipino buyers from the rest of Asia especially for its high end properties, such as Trump Tower at Century City, the Versace Home-interior designed Milano Residences, the MissoniHome interior designed Acqua Livingstone, and even the man-made beach residential community called Azure, which has a beach club designed by Paris Hilton.
Century Properties said that it also welcomes the additional safety measures of the Philippines' central bank as it works to protect the property industry against a bubble. "It makes the market even stronger as it ensures that real estate loans are given to worthwhile projects and weeds out speculators," Antonio said.
With 26 years in the business of real estate development, marketing and property management, Century Properties has completed 20 condominium buildings (4,128 units) with a total GFA of 548,262 sqm and is currently managing 51 properties as of December 31, 2011. Delivering differentiated, quality real estate has been Century Properties' commitment in its almost three decades in the business of full-service real estate development, marketing and property management. The company is listed in the Philippine Stock Exchange under the symbol CPG.
Source: Manila Bulletin | September 10, 2012
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