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APREA Singapore: How attractive is the property market in the Philippines?

There are split views on Asia’s emerging markets, feedback at APREA’s Property Leader Forum in Singapore showed. The Philippines counts among those emerging real еstatе markets that many investors are still cautious about, even though it offers enormous growth prospects.

SNL Financial on April 24 spoke with Ambassador Jose Antonio, Executive Chairman of the Board of Philippine-based Century Properties Group Inc., formerly known as East Asia Power Resources Corp.

The real еstatе company is one of the few publicly owned property firms in its domestic market and focuses on property development and management. CPGI also has global exposure, including London projects. In March, Century Properties Group raised 1.64 billion Philippine pesos from an equity placement.

The following is an edited transcript of an interview with Antonio.

SNL Financial: In your view, what are the growth prospects for the real еstatе market in the Philippines, and what are the key drivers?

Jose Antonio: Essentially, the Philippines is now on the radar of a lot of investors. That is principally because of its growth. We have experienced 48 quarters of continuous growth and last month the Philippines was upgraded by Moody’s to a new level, one rank below investment grade. As a result, a lot of money is now focused on the Philippines, evidenced by record highs being recorded at the Philippine Stock Exchange.

Investments are coming into various areas. There is investment through the stock market and there are direct property investments being made because prime property, for example, in the Philippines is seeing an 85% discount compared to prices in Singapore and Hong Kong. A lot of people who are building their portfolio in Asia are looking to the Philippines as a potential investment area.

What types of investors are interested in getting involved?

They vary from institutional investors like pension funds and private equity funds to retail investors. People are buying from one unit up to five units, or they are buying commercial properties. Investors come in various shapes and forms but basically we are experiencing growth in many areas of investment.

For you as a developer, is there a direct effect?

It’s made us busy and the company has experienced record growth, too. We are trying to supply the demand from an expanding population, especially in the middle class.

Do you believe this positive trend will continue in the long term?

Yes, we are still playing a catch-up game to cover the unfulfilled demand for new homes. There is not only demand for housing but also for retail and offices, because there is a lot of business process and outsourcing of companies who have made the Philippines their headquarters. Therefore, vacancy rates in the [central business districts] are about 2%, and [rental] rates are healthily going up by at least 5% per annum.

Source: SNL Financial | April 24, 2013


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