Real Estate Philippines News Blog

For those of you who have not seen the new San Miguel Beer commercial which features Pinoy boxing icon Manny Pacquiao, Billiards legend Efren “Bata” Reyes, Funny man Michael V. and Matinee idol Derek Ramsay, notice the order of Pacquiao when he orders “Roasted HIGHLAND Legumes” and it turns out to be isang platitong mani (a small plate of peanuts).

Now I don’t know if they put the word HIGHLAND in that commercial on purpose, but we can’t help but speculate again on Manny’s intentions of putting up a ” Manny Pacquiao Highlands” in General Santos, as I have discussed in my recent blogpost at http://www.realestatephilippinesblog.com/manny-pacquiao-highlands-to-be-built-in-general-santos/.

There are no official details or any confirmations yet on whether Pacquiao Higlands will truly arise. But the HIGHLAND hint in this recent Pacquiao San Miguel Beer Commercial should serve as a clue. Maybe “the Pacman” himself wanted the word HIGHLAND there to convey his purposes of going through with this  project, because I don’t think there are “Highland legumes” being served in restaurants right now. Let’s just wait and see if “Manny Pacquiao Highlands” becomes a dream come true…

Recently, pound-for-pound boxing champ and Philippine national sports hero Manny Pacquiao mentioned that he wants to develop a “Pacquiao Highlands” in one of his big properties in General Santos. In other words, he wants to make a high-end leisure type of village there similar to Tagaytay Highlands, probably offering a cool climate, golf courses, log cabins, state-of-the-art clubhouses with complete facilities, and beautiful parks and gardens. This is very interesting and intruiging indeed…

Of course, with the recent Forbes Magazine reports of Manny Pacquiao’s net worth to be at $40 million US dollars (which translates to about P1.92 BILLION pesos), he certainly has the money to do it. However, the more crucial question here is - where will the real estate development expertise come from?

This expertise certainly won’t come from him obviously. If Pacquiao wants to pursue this, he has to partner with leading developers who have great experience in developing Philippine leisure developments, such as Highlands Prime (makers of Tagaytay Highlands), Landco Pacific (makers of Punta Fuego), and Ayala Land (makers of Anvaya Cove). Perhaps the synergy of his widespread ‘popularity, his partner’s property development skills, and their finances combined may prove to be a superior “knock-out combination” :-p

Who among these developers will take up the challenge? And will “Manny Pacquiao Highlands“  be just another fantasy or a become a definite reality? With his numerous business ventures already in place, Let’s see if Pacquiao proves to be enterprising again by pushing through with this grand Philippine leisure project and give the people of General Santos a truly beautiful sight worth seeing and experiencing…

It is quite obvious that Philippine Real Estate Developers are not as robust now compared to the previous 3 years due to the global economic slowdown, and therefore need new fresh tactics to survive.The Inquirer Property section started a series of articles that stated “Asia is no longer insulated” from the financial crisis originating from the West (source: http://www.inquirer.net/propertyguide/aroundtown/view.php?db=1&article=20090314-194072).  Global Property Guide’s survey of publicly-available house-price time-series for 2008 showed that Philippine Property prices were declining steadily. Even until now, the slope is still going down as we brokers ourselves experience difficulty in selling. Most people we talked to our holding on to their money, or simply have hard times themselves in making it.According to the article, here is what Prince Christian Cruz, a Global Property Guide senior economist, suggests to Philippine Real Estate Developers to cope with the crisis:

• Provide cheaper properties by cutting back on certain amenities such as gyms, function halls and swimming pools. Location is more important to the working class Filipinos.

• Focus on accessibility to public transport as this is crucial to them

• Price properties according to the buying capacity of working and middle-class families. The international standard for affordable housing is three to five times the annual income. In other words, a Filipino worker who earns P10,000 a month can buy a Philippine property between P360,000 and P600,000.

• Offer rent-to-own schemes for better affordability

In other words, Mr. Cruz is suggesting developers should shift their focus from Overseas Filipinos an enormous local demand from the locally employed middle-class and working-class sector.

The second part of the Inquirer article quotes Alejandro Mañalac, president of the National Real Estate Association, saying that the Economic Slowdown is a blessing in disguise since there will be a smaller glut or oversupply of Philippine condominiums due to developers slowing down in new projects.

Mañalac also said the Ifric 15 issue (see my previous blog entry about it on http://www.realestatephilippinesblog.com/breaking-news-new-rule-to-hamper-philippine-real-estate-developers/) also made developers rethink their plans to build high-rise buildings (which takes three to five years to complete) in favor of end-user projects which they could finish within a year, and thus recognize their income in their books. “It’s a good thing that the implementation of this new accounting reporting standard was deferred until 2012,” he said, or else all of them would look bad to investors of their stocks.

Mr. Manalac also agrees with Mr. Cruz in terms of adjusting the payment schemes of properties for sale so that end users and the Filipino workers can afford it more. He reiterates that even though most of the Philippine Pre-selling projects are 60% sold, which gives them enough money to complete construction, developers should adjust their investment terms accordingly and not necessarily bring down prices, so that the remaining inventories of pre-sellers can be taken.

If you ask me, this suggestion should also apply to secondary sellers of Philippine property. They should try selling rent-to-own style, where in they can earn from the interest they charge to their tenants as well. In that way, they can help more Filipinos in owning their dream home while doing business also - a Win-Win situation for both buyer and seller

It looks like there’s another “Johnny Come Lately” player in the Real Estate Philippines scenario.

R-II Builders, led by Harbour Centre owners Michael Romero and Reghis Romero, have recently inked a p1-billion joint venture project in Taguig City with Taguig Mayor Freddie Tinga, according to Philippine Inquirer (http://www.inquirer.net/propertyguide/aroundtown/view.php?db=1&article=20090130-186399). It says that they plan to build two chubs, namely an 8.8 hectare mixed use development in Ususan called “Skyline City“, and a section of medium rise residential buidlings targeted toward the Taguig working employees.

Again, this new deal just shows the massive potential of Taguig City as the next force to be reckoned with in the Philippine Property landscape, as I have already mentioned in an earlier blogpost on how Taguig will eventually overtake Makati as the next Financial Capital of the Philippines (http://www.realestatephilippinesblog.com/the-fort-bonifacio-global-city-the-future-financial-capital-of-the-philippines/). Aside from all the major Philippine Property players such as Ayala Land, Greenfield Development, Megaworld, Century Properties, the Rufino Offices and Robinsons Land having projects already in Fort Global City, it seems that new property developers also want to join in the frey of the boom.

However, the REAL question here is will the Romeros develop this land properly? In terms of financial capacity, well we can certainly say that they are capable since they do own Harbour Center and have truckloads of money to invest (some rumors suggest them entering the Philippine Basketball Association very soon). But how about the know-how?

We have seen so many Philippine Real Estate developers fail, go bankrupt, and leave early investors in the dust with lost money in unfinished buildings, especially in the last decade of the Asian Financial Crisis last 1997. We Filipinos should have learned our lesson in choosing the right and dependable developer who will finish their projects on time right? I’m not saying that R-II Builders are bad developers, it’s just that they are unproven yet, and only time will tell if they do prove to be good developers or not. Be wary then! Let’s just hope and pray for the fair citizens of Taguig City that they do indeed turn out to be reliable after all and that the Skyline City proves to be beautiful and very livable…