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Century Properties 3Q profit doubles as sales to affordable market jumps 60 percent

The company generated P5.6 billion in pre-sales in the third quarter, 19 percent coming from the luxury segment, 24 percent from the middle income, and 58 percent from the affordable segment.

For the first three quarters, Century Properties’ pre-sales stood at P16.3 billion on P12-billion worth of inventory launched.

Average take up is P1.2 billion per month. Of the total 9-month sales, 69 percent or P11.3 billion came from overseas markets.

For the fourth quarter, Century Properties will launch P4-billion worth of inventory, possibly allowing the company to exceed its full-year pre-sales target of P20 billion.

At end-September, the real еstatе firm’s outstanding credit stood at P2.8 billion out of the available P6.6 billion.

Philippe Starck

After tying up with Trump International for the tallest building in the Philippines, Century Properties is now developing a new project with interiors to be helmed by French designer Philippe Starck.

The signature tower dubbed Acqua Uguazu is the first collaboration of Century Properties with the design brand. It is estimated to cost P1.7 billion and the fifth of the six buidlings would rise within the developer’s 2.4-hectare lot in Mandaluyong City called Acqua Private Residences.

“We continue to establish international collaborations because the local market has shown its readiness for branded real еstatе,” Marco R. Antonio, Century Properties President and CEO, said.

The project will be more than 50 storeys and will be crowned by a spherical multi-level amenity deck called Cielo. About 400 units will be available: one-bedroom units measuring 26-42 square meters; two-bedroom units at 78-101 square meters; and three-bedroom units at 96-115 square meters.

Robie Antonio, Century Properties head for international collaborations, said the Philippines’ exposure to Philippe Starck has has been limited to products and furniture.

“Given his powerful influence in the field of design, we felt there was a need to rouse our consciousness with his brand of design sensibilities,” he said.

Aside from Philippe Starck, Century Properties also collaborated with Trump International Trump Tower, Versace for Milano Residences, and tapped Paris Hilton to be an image model for Azure Urban Resort Residences.

Shifting to affordable housing

Despite its positioning as a high-end developer, Century Properties is catering more to the lower income bracket given the demand from this market.

With almost 60 percent of pre-sales generated from the affordable segment, the company expects to develop more for this market in the coming years.

About 50 percent of the company’s developments would be made up of the affordable projects, with units costing P1.2-3.5 million. Luxury units – from P7 million up – and middle income – from P3.5-7 million – would account for 30 percent and 20 percent, respectively.

“Focusing on the affordable would de-risk us from the downturn if you view the real еstatе business as cyclical,” Antonio said.

He said this would not hurt their high-end branding and instead bolster Century Properties’ reputation as a company that can deliver “premium products at every price point.”

He cited Ayala Land Inc as another developer that was successful in merging its high-end reputation – under Ayala Premiere in its portfolio – with the affordable housing under Avida and Amaia.

Bubble not a concern

That said, a property bubble, especially in the luxury segment, is not a concern since homeownership is still low and the price escalation had been gradual, not “as astonishing as in the mid-1990s to 1997,” Antonio said.

He said a price increase of 5-8 percent is still sustainable and the land prices are still off the peaks seen prior to the Asian financial crisis of 1997-1998.

“Vacancy rates for the high-end market are still around 5 percent, which means our buyers love to use their homes,” Antonio said.

On top of that, developers for the high-end market are “very select,” therefore supply is still apace with demand.

Antonio said the property bubble starts when the level of market saturation is high and developers had not been able to tap new markets to unload their inventory.

So far, sales among the Chinese, Japanese and Singaporeans had been strong as they are attracted to the branded developments like Missoni and Versace. In addition, Century Properties was able to open a marketing arm in the Middle East, a territory that had been difficult to penetrate.

“The growth that we see today is still sustainable,” said Antonio.


Source: Interaksyon | November 12, 2012


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