Top spenders

The country’s top real estate developers are spending close to P400 billion this year, in what is seen by some analysts as an indication of the strong economic fundamentals and in preparation for the ASEAN economic integration by 2015.

Pinnacle Real Estate Consulting Services, in its July 2014 Philippine Real Estate Market Insight study, noted that top developers are increasing their capital expenditures to fast track their projects.

The SM Group, for instance, allotted P70.57 billion for its capex this year, of which 55 percent  is for the shopping malls, 28 percent for the residential segment, and the balance for offices, hotels and convention centers.

Pinnacle noted that the SM Group recently consolidated its various real estate vehicles to form the largest property group in ASEAN and that the group is clearly looking for opportunities in the forthcoming ASEAN economic integration.

Meanwhile, the study pointed out that Ayala Land allotted P70 billion for its 2014 projects. “True to its tradition of master planned developments, it is embarking on its 74-hectare Arca South project (recently acquired FTI Complex from the government) and its 1,125- hectare Alviera project in Porac, Pampanga. More importantly, the Ayala Group has launched its Seda hotel brand in Bonifacio Global City, El Nido and Vertis North, as well as its new retail platform “District” in Dasmariñas and Imus in Cavite, as well as in Talisay City in Negros Occidental,” Pinnacle said.

The Megaworld Group earmarked P40 billion for expansion this year, excluding the capex of Empire East which is reported at P25 billion in the next five years. It also consolidated its stake in Global-Estate Resorts, Inc. (GERI) from Alliance Global. This is to position the group in the tourism industry, not only in Boracay, but also in its gaming jewel Resorts World/Newport, in Twin Lakes in Tagaytay, as well as in Cavite, Iloilo and Laguna. In addition, Suntrust Properties, its subsidiary targeting the affordable residential segment, has been launching a number of projects, the study mentioned.

Meanwhile, the Vista Land Group allotted P21.6 billion for its capex in 2014 given its massive expansion around the country. Its popular Camella brand has been providing houses-and-lots all over the country, and is typically the first mover in tertiary cities. More importantly, this group is beefing up its Starmall Prima and Starmall Strip brands. It is currently operating Starmall Alabang, Starmall EDSA- Shaw, Starmall Las Piñas and Starmall Annex. It intends to expand its Starmall Prima in Taguig, Bacoor- Cavite, and Sta. Rosa-Laguna. The Starmall Strip is projected to open 22 branches by 2017. Thai mall developer Land & House is the foreign partner of Vista Land Group, and owns 11 percent of Starmalls, the study added.

In addition, the Villar Group is aggressively expanding its offices, malls and hotels businesses as part of its transformation into a complete real estate company. As a strategy, the Vista Land Group will be putting up BPO offices in their Starmalls.

Filinvest Land has earmarked P20 billion for its programmed spending this year, which includes at least P8 billion for development of residential projects, Pinnacle mentioned. Apart from the residential segment, it is expanding its Festival Supermall River Park and as well as its hotel platform with the operation of Crimson Hotel. The Filinvest Group entered into a joint venture with the Singaporean- firm Archipelago International Pte. Ltd. (AIPL) for the formation of FilArchipelago Hospitality, Inc. (FHI). AIPL is an affiliate of Aston International which manages hotels, resorts, residences, spas and villas under Crimson and other hospitality brands.

FHI currently operates two hotels under the 5-star Crimson brand – one in Mactan, Cebu and another in Filinvest City, Alabang, and one hotel under the 3-star Quest brand in Cebu City. FHI is also responsible for managing the Grand Cenia Condotel and Residences in Cebu, and its Entrata Complex in Alabang, and the Crimson Resort and Spa in Seascapes Resort Town in Cebu.

Robinsons Land has set a budget of P16 billion as capex for this year. This would go to the expansion of its shopping malls and hotels, mixed-use properties such as office buildings, residential condominiums, as well as land and residential housing developments in key cities and other urban areas nationwide.

The study notes: “It has embarked on socialized housing projects in recent years as well. The Robinsons Group has years of experience in exploring various platforms and asset classes, including the creation of its local brand “GoHotels” in clear contrast to its partnership with Crown Plaza and Holiday Inn.”

The Pinnacle study also cited other developers as follows:

– Rockwell Land Corp. of the Lopez Group has allocated P10 billion for its capex this year, which is 25 percent higher than last year. Rockwell is ramping up its first venture into the hotel and leisure business, Aruga Serviced Apartments. It is within Edades Tower, occupying six floors—from the third to the eighth floor, and is located within the Rockwell Center complex in Makati City. Aruga will offer 114 units for occupancy. Rockwell is targeting two other serviced hotels under the Aruga brand, one in Ortigas in Metro Manila, and another in Cebu.

– The listed holding company of tycoon George Ty-Metrobank Group, GT Capital Holdings Inc., has set a capital expenditure budget of nearly P40 billion this year, mainly to expand its power generation and real estate businesses. Federal Land Inc., its real estate development arm, is allocating P12.81 billion to develop residential, commercial and retail projects, as well as to finance land banking initiatives.

– DMCI Holdings has allotted at least P20 billion for its capex this year. Majority of that, P15 billion, is intended for its power plant expansion and the remaining P5 billion is for real estate. It is a known fact that the cash cow of the DMCI Group is its mining unit Semirara Mining Corp. DMCI Group is aggressively expanding its power plant portfolio with two 350MW plants. Being one of the largest real estate contractors in the past, the P5 billion expansion in real estate development is a testament to its commitment to provide quality and affordable housing units.

– Cosco Capital, Inc., the listed holding firm of Lucio L. Co, more than doubled its capex this year to around P10  billion from P3.5 billion last year. Around P3 billion will go to its popular retail arm Puregold Price Club, Inc., which will open 25 additional stores this year. It also recently completed its Divisoria 999 Shopping Mall and a commercial building at the Fairview Terraces, joint project with Ayala Group.

S&R Membership Shopping, which currently has eight warehouse stores, opened stores in Davao City and Shaw Boulevard in Mandaluyong City last year, running ahead of its customary pace of one store a year. Plans are underway for the development of its 2.3-hectare property in Urdaneta, Pangasinan, on which the first of its three community malls will rise. Cosco is also in talks for the acquisition of land in Laguna and Nueva Ecija for the two other malls, which will carry the brand Cosco Mall. The Group recently partnered with the Japanese convenience store group Lawson, Inc. The partnership will open 20-30 stores this year, which will eventually accelerate to 80-100 stores annually in the succeeding years, with a 500-store target by 2020. Bulk of the capex is also intended for strategic acquisition such as the recently acquired NE Pacific Shopping Centers Corp., the largest mall operator in Cabanatuan City, Nueva Ecija; and the Office Warehouse chain, which has 47 stores.

–  Lucio Tan’s Eton Properties Philippines, Inc. is allotting P10 billion for its capital expenditures for the next two years to support its plans to focus more on generating recurring income rather than real estate sales. Eton currently has an inventory of 90,000 sq.m., with its five office buildings, with a sixth building, Eton Cyberpod Three, under construction bringing it to 156,000 by the end of the year. In the next two years, Eton will add another 60,000 sq.m. of leasable space, which is in accordance with Eton’s thrust of targeting BPO industry and beefing up recurring income. Eton intends to complete six more office towers in Eton Centris in Quezon City by 2017.

– Century Properties Group, Inc. (CPG), known for its flashy brands and products, earmarked P8 billion capex this year as it unveils more projects and diversifies its portfolio. It recently opened its Century City Mall in Makati, and is building its office tower in Century City named as Century Spire. CPG is also unveiling its first tourism-related project this year, a hotel- serviced-apartment. The Group is also launching its 8-hectare, P20-billion, mixed- use development “Azure North” project in San Fernando, Pampanga, that boasts of the second “Paris Beach Club” with Paris Hilton designing it.

– Another maverick developer is Aboitiz Land Inc. which increased its capex this year to P 5.4 billion, a 35% rise from 2013 as it sets its sight on expanding nationwide. The Aboitiz Group is well known in the Visayas and Mindanao, and even partnered with other players such as Ayala Land in recent years. Nonetheless, AboitizLand is committed to enter the market nationally where more than half of the capex budget is allocated for residential development, while the rest will go to industrial and commercial projects. More importantly, AboitizLand is expanding its industrial offering in Batangas and Davao City. Further, the Group has been actively bidding in toll-roads, and other infrastructure projects such as airports and power plants.

–  Landco Pacific Corp. (Landco) is allocating a capex of P9 billion for the next five years to fund its expansion in upscale leisure and horizontal residential development. Its projects are Tribeca Private Residences in Sucat, Muntinlupa City; Playa Azalea in Samal, Davao del Norte; Nautilus, the first tower of its upcoming seaside condominium development called Playa Calatagan Residences. Three buildings are set to rise in Playa Calatagan Residences. Landco’s beach resort amenity, Aquaria, is expected to rise in Calatagan, Batangas.

–  Sta Lucia Land Inc. (SLI) raised its capex to P2 billion from P1.35 billion last year as it plans to launch 20 new projects. It is acquiring properties in Laguna, Batangas, Cavite, Rizal, Davao, among other places. Sta Lucia is also expanding its existing mall that will add a gross floor area of over 50,000 square meters to the existing shopping center’s 180,000 sqm. SLI’s other investments include a 12 percent stake in Philippine Racing Club Inc., a horse racing operator and the joint venture partner of Ayala Land Inc. in Circuit Makati.

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