With the economy in full rebound mode, the real estate market is really perking up as well. It will be recalled that during the height of the pandemic, the sector was one of those that were badly hit. Mobility restrictions prevented workers from reporting to work sites, not to mention the severe limits imposed on construction protocols.
A report by the Real Estate Group Philippines showed, for example, that 2020 revenues of Ayala Land, Inc. dropped by some 43 percent versus 2019 from P168 billion to P96 billion. Revenues of SM Prime Holdings, on the other hand, dropped by 31 percent from P118 billion to P81 billion.
Since the relaxation and eventual lifting of pandemic restrictions, real estate developers have been scrambling to restart projects that were forced into hibernation during COVID. As well, planned developments that lay-in-wait on the drawing boards were dusted off. Demand is, of course, expected to firm up, too. The 2023 Colliers Global Investor Outlook for the Philippines forecasts a rise in both value and volumes of real estate properties, with annual growth rates of 0.7 percent and 2 percent, respectively, versus 2022.
Amid the revival of the property sector, we find some very encouraging signs not only in the rise in number and variety of projects but also in the profile of developers. One of the newest players entering the Philippines is Federal Land NRE Global, Inc. (FNG), a joint venture of real-estate giants Federal Land, Inc. (FLI) and Nomura Real Estate Development Co., Ltd. (NRE).
Federal Land is wholly owned by GT Capital Holdings, Inc. of which, in the spirit of full disclosure, I am affiliated. FLI has been a mainstay in the Philippine property sector, creating innovative and well-built property developments and integrated communities for the past 50 years.
Nomura Real Estate Development, on the other hand is owned by Nomura Holdings, Inc., a financial and investment services group that has roots spanning back to the late 1800s. NRE earned a solid reputation for going beyond normal design boundaries while exploring new technologies that better serve the urban landscape.
The entry of Federal Land NRE Global into the Philippines promises a new dimension to the property landscape in the country. FNG blends the best of Japanese innovation, technology, and design with Federal Land’s extensive knowledge of the Philippine market and unquestionable reputation for well-built and innovative properties.
Beyond its impact on the property sector, the investment of Nomura Real Estate into FNG is also a significant boost to the drive of the Philippine government to increase foreign investments in the country. In fact, the partnership with Federal Land is the single largest investment of NRE outside of Japan. Nomura Real Estate Development is Japan’s second-largest real estate developer in terms of residential unit turnover and the fifth largest in consolidated sales. Their entry is a resounding vote of confidence in the economic and business prospects of the nation as well as in the property development capabilities of FLI.
The alliance will have a capital investment of approximately P48 billion. Nomura Real Estate will be investing $324 million (approximately P16 billion pesos), representing 34 percent of the total capital investment of the new company.
FNG expands a previous tie-up between Federal Land and NRE. Along with Japan’s Isetan Mitsukoshi Holdings Ltd., the proponents first collaborated on The Seasons Residences, a four-tower high-end residential development at Bonifacio Global City featuring distinct Japanese innovations. The partnership also brings the first Mitsukoshi to the Philippines. Take-up of units in the first three towers of The Seasons has been brisk – over 90% – and the fourth tower is about to be started.
The initial project under FNG incorporates four areas of land development with a total area of about 250 hectares in Metro Manila, Cavite, and Cebu. These include an initial pipeline of residential, office, and commercial facilities. This massive endeavor also aims to create 6,000 job opportunities within the first five years of operations, such as administrative, engineering, and construction-related roles. This is just the beginning of plans carved and set to realize in the next 30 years, as FNG aims to establish its presence in the country and raise the bar for property development.
FNG also aims to elevate the living experience of customers through the unique fusion of Japanese innovation with Filipino sensibility in its soon-to-be-seen milestone developments. It differentiates itself through its push for sustainable smart cities, the presence of Japanese concepts, and its client-first mindset.
The Philippine property market is expecting a further acceleration in 2023. Rising consumer and investor confidence and the completion of major infrastructure in the country are setting the stage for a sector bound for a much awaited resurgence. Expectedly, interest from both local and foreign property developers will grow and this will surely help build a better tomorrow for Filipinos.
Read more: Manila Bulletin Online – News
