Monday, October 5, 2015

The Largest Philippine Real Estate Developers and Their CAPEX in 2015

Wazzup Pilipinas!

Here’s a rundown of how much the country’s largest property developers are spending in 2015 to finance their projects.

With a gross domestic product (GDP) growing on average 6.2 percent between 2010 and 2014, the Philippines has steadily emerged as one of the fastest growing economies in Southeast Asia. Expectedly, local real estate has been one of the large contributors to the country’s GDP growth average.

While the industry had been doing well in the past couple of years on its own, even more vigorous growth in the immediate future is anticipated within. Rapid urbanization coupled with the continued rise of the residential sector have been the key sources of growth for local real estate, and is one of the main reason for several developers’ leading the way for record capital expenditures (CAPEX) in 2015.

1. Ayala Land Inc.
Php80-90 billion

Earlier this year, Ayala Land Inc. allocated a Php100 billion CAPEX but to prioritize the land banking initiative of the property giant they recently lowered the amount down to Php80 to Php90 billion. Though marked down a bit, the plan set by Ayala Land Inc. is still the largest in local real estate. The record CAPEX is part of ALI’s “2020 vision,” where the target is to increase business by 20 percent annually over the next six years, with an end goal of reaching or surpassing a net profit of Php40 billion by the year 2020. Key projects from Ayala Land that investors can look forward to include The Courtyards in DasmariƱas and Imus, Cavite; Arca South in Taguig; and Alviera in Porac, Pampanga. All these projects are indicative of Ayala Land’s expansion outside Metro Manila.

2. SM Prime Holdings
Php80 billion

Henry Sy’s listed flagship real estate company SM Prime Holdings reported early this year that it is earmarking nearly Php80 billion worth of CAPEX for 2015, 18 percent more than the Php67.5 billion earmarked for 2014. Between Php15 and Php18 billion will be allotted for residential developer SMDC, which is looking to launch four to five projects in 2015. For its malls business, SM Prime will open four new malls in 2015: SM City San Mateo, SM City Cabanatuan, SM City Seaside, and SM City Sangandaan.

3. Megaworld Corporation
Php65 billion

Andrew Tan-owned Megaworld announced this year that it is allocating Php285.8 billion for its five-year capital spending program until 2019. Out of that amount, Php65 billion serves as their CAPEX for 2015, and is intended for the building of more residential and hotel projects, office buildings, as well as malls and commercial centers inside Megaworld’s integrated urban townships. The company has already launched a total of 15 township developments as of 2014, the largest three of which are Twin Lakes in Tagaytay (1,300 hectares), Southwoods City in the boundaries of Cavite and Laguna (561 hectares), and Suntrust Ecotown Plaza in Tanza, Cavite (350 hectares).

4. Vista Land & Lifescapes
Php25 billion

Posting a 10 percent growth in revenue for the first quarter of this year, Villar-owned Vista Land & Lifescapes, Inc. expects CAPEX for 2015 to reach Php25.1 billion. The company had already launched Php12 billion worth of projects for the first quarter of 2015, and announced in April upcoming projects to be launched in the succeeding three months. These are to be situated in Caloocan, Rizal, and Laguna, and will follow the format of its affordable housing segment Camella Homes.

5. Filinvest Land Inc.
Php24 billion

Last May, Filinvest Development Corp. announced it will spend Php58 billion in 2015. Of that amount, Php24 billion has been allocated for the CAPEX of Filinvest Land Inc., 20 percent more than the Php20 billion the company originally set as its CAPEX for 2014. The company’s Amalfi development in City di Mare in Cebu, which already has two buildings completed, is set to have a third. Filinvest also plans to launch a high-end residential development by the end of the year, and it will be located on a 20-hectare property in Daang Hari along the Alabang–Cavite area.

6. Robinsons Land Corporation
Php17 billion

Robinsons Land Corporation announced last October that their CAPEX for 2015 would remain at the record levels it had been the year before. At present, the company’s 2015 CAPEX is pegged at Php17 billion, which is largely for the bankrolling of the development of shopping malls. The company recently acquired the 18.5-hectare Mitsubishi property along Ortigas Avenue, where it intends to build a major township. Through its horizontal developer Robinsons Homes, the company is also set to its first residential subdivision project in Bacolod City.

7. Federal Land
Php15 billion

A wholly owned subsidiary of GT Capital Holdings, Inc., Federal Land will account for Php15 billion of the conglomerate’s Php50 billion CAPEX for 2015. According to Federal Land president Carmelo Maria Luza Bautista, the developer plans to launch at least 10 projects in 2015. In 2014, the developer launched four high-rise condo projects: Times Square West in Veritown Fort in Bonifacio Global City; Marco Polo Residences Oceanview in Cebu; and Six Senses Resort 4 and Palm Beach Villa 2 in Pasay City.

8. Rockwell Land
Php13 billion

Rockwell Land Corporation has set its CAPEX for 2015 at Php13 billion, higher than the Php8.7 billion earmarked for 2014. The company has stated it is putting a particular focus on the development of its prime office and retail properties in an effort to further its recurring income. The company through its subsidiary Rockwell Primaries is also looking to embark on “The Vantage sa Kapitolyo,” its first high-rise development situated in the popular Kapitolyo area of Pasig, and a planned, yet-to-be-named exclusive condominium village on 6.4 hectares of land along Sucat, Muntinlupa. It is touted to be Rockwell Primaries’ largest development to date.

9. DMCI Homes
Php12 billion

For 2015, DMCI Homes is expecting to have capital expenditures totaling Php12 billion: Php5 billion is reportedly set solely for land acquisition, while development costs are expected to range between Php6 and Php7 billion. The company had recently projected a possible Php3.6 billion in earnings for this year. New projects reportedly to be launched by DMCI this year include Bristle Ridge in Baguio City, Valencia Residences in Mandaluyong, Lumiere Residences in Pasig, and the Ivorywood and Maple Place developments in Acacia Estate in Taguig.

10. Shang Properties
Php10 billion

Shang Properties, the local real estate arm of Malaysia-based Kuok Group, has set a 2-year capital expenditure budget of over Php20 billion to finance the development of its various projects. Exactly half is allocated as the CAPEX for 2015. The company is currently building high-end projects like Shang Salcedo Place and The Rise, both in Makati, which will be completed in 2015 and 2017, respectively. The company is also looking to further its developments with possible land acquisition in Mandaluyong, Makati, and Bonifacio Global City.

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