The Philippine Real Estate sector count blessings as slower growth and higher inflation amidst the global financial crisis highlights the advantages of real estate and other investments in the Philippines
Beth Collingz, overseas sales director of PLC International and lead marketing partners for Pacific Concord Properties Lancaster Brand of Condo Hotels in the Philippines said a lot of criticism has been leveled at Philippine banks conservative lending policies. It is a tightly controlled industry dominated by only a few banks and their lending habits have been severe, particularly since the 1997 Asian crisis, and that has hindered the country’s economic growth at times. Ironically, the global credit crunch tends to highlight the unique advantage of the Philippines as a destination for foreign investments and tourism, and a preferred source of imports and skilled labor. However, these policies are why the Philippines will not face the same state of affairs that are occurring in the United States and Europe today.
Failures in the Philippine banking system that were seen as a result of the Asian crisis are almost impossible now given the size of the remaining banks that have grown and consolidated over the past 15 years. The Philippine bank’s ratio of non performing loans is minimal due to tight lending rules and very high collateral requirements is a really a blessing is disguise said Collingz.
Philippine banks can weather the current global financial storm. The US and UK property sector financial problems are caused in the main by overfed and unrealistic real-estate markets. Property developers simply borrowed easy funds from numerous financial institutions and built too many units that went unsold, dragging down prices. Moreover, mortgages for property purchases were easy, creating mock buyers unlike the Philippines where property developers, since the Asian crisis, rarely break ground for a project until at least 60% of units are pre-sold eliminating oversupply and empty buildings of unsold units. Collingz said “you cannot buy property in the Philippines with a smile, a whistle and empty pockets. Philippine real-estate lenders require something uncommon to US buyers and that is a substantial cash up-front down payment”
The World Bank said in a quarterly report that the Philippines is in a better position to weather the uncertainties brought about by the recent global slowdown given the fiscal and other reforms it has undertaken in the last several years. The report cited a strong performance in private investments and construction, better-than-expected crop harvests, higher production in manufacturing and continued remittances from the millions Filipinos working overseas.
The World Bank still projects gross domestic product to slow to 3.0 to 4.0. Despite the twin challenges of slower growth and higher inflation, the situation is expected to remain manageable. The World Bank stressed the need for the Philippine government to improve tax collections, saying such revenues were crucial for increased infrastructure spending and the social safety nets Manila was planning to sustain growth and protect vulnerable sectors. Recent reforms carried out in Manila have also won praise from the International Monetary Fund and the World Bank.
While many people abroad are losing their homes because of sub prime mortgage fiasco, on the other hand, decent mass housing units are cropping up across the Philippine urban centers. The Philippine government has decided to stop borrowing money from abroad for new infrastructure and development projects but to finance them locally as the government’s fiscal position has improved over the years.
With the credit crunch now hitting Europe, Property Investors are looking away from concentrated property areas like Paris and London's West End to other markets all over the world, and Philippine Apart-Hotel, Condo Hotel or Buy-to-Let rental properties fit the bill said Collingz. Institutional investors are trying to diversify their property portfolios through areas like Southeast Asia - with the Philippines heading the list, then Thailand, Singapore and China property investments featuring in some portfolios.
The best investment returns are actually going to come out of Asia and emerging markets - the US's day in the sun is certainly over. Investors are moving to new areas to find value said Collingz "More and more of clients for buy-to-let Condo Hotel Investments are coming from the UK and the Middle East. There has been a distinct market shift from US based clients over the past year and we see that trend continuing throughout 2011 well into 2015.
“A lot of this interest is being driven by the relatively cheap market prices in the Philippines compared to Europe, 100% financing availability and easy no down payment options available for our Condo Hotel Developments, but there are other factors, too. Offshore Property Investors, Foreign baby boomers as well as overseas Filipinos, are looking for ways to maximize their return on investments as they approach retirement, and so are purchasing second homes, particularly Condo Hotel Investments where they can use the Condo for vacations and rent it out through our In-House Condo Hotel Management when they are not using the unit thereby gaining rental incomes that on today’s purchase prices, give a projected ROI on their investments of some 8 percent depending upon the mode of payment for the unit”
Collingz maintains the global crisis presents itself as an opportunity for the country to put its best foot forward and be noticed. We just have to do what we have to do, and rise to the occasion. As luck would have it, the global credit crunch tends to highlight the unique advantage of the Philippines as a destination for foreign investments and tourism. It is just a matter of marketing the country all the more vigorously. We have to find alternatives to whatever markets or foreign investors that we may lose. And we will get them in droves. If you know your trade and you are offering a good product “the market is here to stay so why rock the boat” she said, even as she advised investors to become more astute in their choice of investments. “Common sense in today’s market dictates to look at the pricing trend of a preconstruction development; if the prices are the same today as they were 6 months ago chances are the project will suffer”.
“People have to realize that markets, especially in real estate, go in 10 year repetitive cycles. Compared to today’s situation, we have had far worse to contend with in the past two cycles the real-estate industry in the Philippines and South-East Asia in general, has experienced. It was by far worse times during the late ’80s and the devastating effects of the Asian financial crisis near the end of the ’90s with a very limited market base” said Collingz.
With the arrival of the internet and communications technology, the whole world suddenly became our market in the Millennium. It is now a global market and with our Condo Hotel developments, sales volume from among near 15 million Filipinos abroad combined with foreign investors from Asia, Europe and the Middle East, remains on the increase.
In order to maintain sales momentum, current marketing trends simply have to change. If you compare the situation in the late ’80s to today, people forget the telex machine had just become redundant and communication was limited to sending a fax offer to buy real estate. A top of the line computer was Apple IIE. Cellular phones were few and far between and the internet was not even around. Ergo, Philippine real-estate investors were merely comprised of wealthy local Chinese businessmen.
During the late 90’s Asian Crisis, not many people used the internet. Now it’s 2011 and a very different ballgame. Today’s technology, unheard of 15 to 20 years ago, has for the most part contributed to sales and marketing efforts of developers and will continue to do so. It is the communication factor that will drive sales of Philippine real estate upwards through 2011 well into 2015 and beyond. Now I receive daily calls and numerous emails from prospective buyers in Australia, Hawaii, New York, Doha, Dubai and the UK. I even get calls from clients located in Fiji and Mauritius. During the previous crisis years I didn’t get any. To maintain sales, its really a simple matter of being organized, having a great development to market with global appeal, an excellent developer, focus, mind set, intelligence, time, enthusiasm and dedication said Collingz.
Whilst some agents dwell on the number of Philippine properties bought by Filipinos based in the US has began to fall because of the credit crunch, it is a blow but not significant as there are new investment clients out there and we do not focus on the US as a sole marketplace for our sales said Collingz.
“Global investors are looking to replace failed pension plans and other future saving schemes with a solid investment in real estate. Many are looking for investments that will give them an income for retirement. Savvy investors are now looking for a more solid investment with potential for monthly income and Philippine Condo Hotel investments are ideal because Philippine Hotel rates are the same if not more expensive than those in the US or Europe but the entry level to purchase real estate is only about 10% of what you would have to pay for a Studio in Manhattan” credit crunch or not she added.
Further fuelling real estate development is the fact the Philippines remains undiscovered as far as British and many European investors are concerned. Yet because of its close links to the US, English is widely spoken and it is well regarded for its people, affordable living, beaches and diving. It’s a whole new market enthused Collingz. “Buying property here is easier than many people think and investment from overseas in tourism real estate is growing, especially in the resort areas of Cebu and Manila itself where rental potential is good”.
However, anyone considering Philippine Real Estate Investments should move at this moment and lock in at current price levels said Collingz. Buyers whom reserve now can take advantage of current prices locked in for their units and see an immediate equity return on their investment said Collingz.
Thanks to the Philippine real estate sectors own safety nets for installment sales; to our conservative banking system for adhering to sound policies that limit exposure to high-risk ventures, thus minimizing their non-performing loans and assets; to the government for its commitment to continue stimulating and pump-priming the economy while keeping inflation in check. All these amount to continued rise in real estate, housing and construction projects in the Country today.
Pacific Concord Properties Inc recently launched Guaranteed Rental Income [GRI] Investment Suites for their Lancaster Atrium Condotel development located along Shaw Boulevard, Metro Manila. Philippines. The Lancaster Atrium Guaranteed Rental Income units come fully furnished, fully fitted to condotel standards with a guaranteed minimum rental income of –Pph-600/sqm per month for 5 years which represents a 6% ROI on the unit purchase depending upon the terms of payment selected by the buyer.
Lancaster – The Atrium Executive Furnished Condotel Studio Suites. Floor Area 28.27sqm [298sqft] Cash Price -Pph-2,873,943.58. Installment Price -Pph-3,221,875.36 [Including Taxes] may be purchased with an initial -Pph-25,000.00 Reservation and Balance Payable without interest over 36 consecutive equal monthly payments -Pph-88,802.89. Lancaster Hotel issues a 5 Year minimum 6% ROI Condotel Rental Guarantee for all Studio Condo Hotel Suites.
Lancaster – The Atrium Premiere Furnished Condotel Studio Suites. Floor Area 28.27sqm [298sqft] Cash Price -Pph-2,959,432.06. Installment Price -Pph-3,316,862.56 [Including Taxes] may be purchased with an initial -Pph-25,000.00 Reservation and Balance Payable without interest over 36 consecutive equal monthly payments -Pph-91,440.63. Lancaster Hotel issues a 5 Year minimum 6% ROI Condotel Rental Guarantee for all Studio Condo Hotel Suites.
Lancaster – The Atrium Premiere Furnished Condotel Studio Suites. Floor Area 32.50sqm [350sqft] Cash Price -Pph-3,303,967.68. Installment Price -Pph-3,703,960.00 [Including Taxes] may be purchased with an initial -Pph-25,000.00 Reservation and Balance Payable without interest over 36 consecutive equal monthly payments -Pph-102,193.33. Lancaster Hotel issues a 5 Year minimum 6% ROI Condotel Rental Guarantee for all Studio Condo Hotel Suites.
Lancaster – The Atrium Furnished One Bedroom Condotel Suites. Floor Area 44.41sqm [469sqft] Cash Price -Pph-4,919,167.09. Installment Price -Pph-5,465,741.21 [Including Taxes] may be purchased with an initial -Pph-25,000.00 Reservation and Balance Payable without interest over 36 consecutive equal monthly payments -Pph-151,131.70. Lancaster Hotel issues a 5 Year minimum 6% ROI Condotel Rental Guarantee for all Studio Condo Hotel Suites.
Lancaster – The Atrium Furnished Two Bedroom Loft Type Condotel Suites. Floor Area 75.84sqm [800sqft] Cash Price -Pph-8,629,917.33. Installment Price -Pph-9,588,797.03 [Including Taxes] may be purchased with an initial -Pph-25,000.00 Reservation and Balance Payable without interest over 36 consecutive equal monthly payments -Pph-265,661.03. Lancaster Hotel issues a 5 Year minimum 6% ROI Condotel Rental Guarantee for all Studio Condo Hotel Suites.
The Lancaster Atrium Manila will provide unit owners with premier residential condo units with option of enrolling their units in the Lancaster Condotel Rental Pool which makes the Lancaster Brand a great Investment for Fil-Am's whom visit Manila for Vacations or Business as they can earn Guaranteed Rental Incomes [at current purchase levels] at a minimum 6% ROI per annum for 5 years as Owner Non-Residents when not using their units through Condotel Management and reciprocal arrangement with Lancaster Cebu Resort Residences enthused Collingz.
Collingz said all units at Lancaster Atrium have basic kitchen facilities. The GRI Condotel units are fully furnished and fitted ready for Hotel rental operations.
Further information on Philippine Condo-hotel investments may be obtained from:
PLC International Marketing Networks
Pacific Concord Properties Inc., Manila Head Office
Shaw Boulevard, Mandaluyong City.
Metro Manila. Philippines
Pacific Concord Properties Inc., Cebu Office
Lapu-Lapu City, Mactan.
Direct Line: [+63 32] 340 0721
Cell Phone: 0916 650 9783 / 0922 858 7027
Cell Phone: International [+63] 916 650 9783 / 922 858 7027
[Lancaster Condotel Investments]
[Lancaster Suites Condotels]
[Lancaster Atrium Condotel]
Labels: Condotel Investment Philippines, Lancaster - The Atrium Guaranteed Rental Income Condotel Investment Manila Philippines, Philippine Real Estate, Philippine Retirement SIPP Compliant Real Estate