Philippine property giants turn to retail
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Philippine property giants are entering record capital expenditure programs in 2016, on the back of strong economy, according to the global property advisor Savills.
Three of the eight biggest property developers – Ayala Land, SM Prime Holdings and Robinsons Land – are also the biggest mall developers in the country.
“When the real estate boom started, residential sales were the sweet spot. It seems that the residential market is becoming more saturated that’s why developers are shifting to the commercial side,” said Antton Nordberg, research and consultancy manager at KMC MAG Group.
The 2016 capex budget will mostly fund the development of large-scale mixed-use communities, mostly commercial components such as office and retail, Nordberg said.
Nordberg said real estate firms – mostly listed in the Philippine Stock Exchange – could spend an all-time high of P369 billion (US$7.9 billion) this year, surpassing the record investment of P360 billion last year by 2.5 per cent.
Questions & Answers
Q.Which specific property developers are mentioned as being significant in the mall development sector?
Which specific property developers are mentioned as being significant in the mall development sector?
Three of the eight largest property developers in the Philippines, Ayala Land, SM Prime Holdings, and Robinsons Land, are also identified as the country's biggest mall developers.
Q.What is the primary reason stated for Philippine property developers shifting their focus towards commercial properties?
What is the primary reason stated for Philippine property developers shifting their focus towards commercial properties?
Developers are shifting to the commercial side because the residential market is becoming more saturated. Residential sales were initially the 'sweet spot' when the real estate boom began.
Q.How much capital expenditure are Philippine real estate firms expected to spend in 2016?
How much capital expenditure are Philippine real estate firms expected to spend in 2016?
Philippine real estate firms could spend an all-time high of P369 billion (US$7.9 billion) in 2016. This figure surpasses the previous year's record investment of P360 billion by 2.5 per cent.
Q.What types of developments will the 2016 capital expenditure budget mainly fund?
What types of developments will the 2016 capital expenditure budget mainly fund?
The 2016 capital expenditure budget will mostly fund the development of large-scale mixed-use communities. These communities will primarily feature commercial components such as office and retail spaces.
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