Online stockbroker foresees further property sector boom

CEBU, Philippines - Online stockbroker COL Financial Philippines foresees long sustainability of the property sector in the country based on the leading players' bullish projection specifically on office and rental sectors.

The latest market analysis made by COL Financial research division showed the seven leading firms namely Ayala Land Inc., (FLI), Vista Land & Lifescapes Inc., (VLL), Filinvest Land Inc., SM Prime Holdings (SMPH), performed in line with the expectations, while Megaworld Corporation (MEG) outperformed better than expected rental revenues.

Market analyst Richard Lañeda said that real estate revenues for the sale of residential properties remain the main growth driver for the property companies, accounting for the bulk of most company’s revenues.

Combined real estate revenues for the first half grew 10.9 percent year-on-year to P84 billion for the companies under the COL's coverage.

All companies in its listings recorded growth residential revenues in line with their increasing level of completion.

Combined take-up sales of the mentioned real estate firms grew 5.2 percent to P167.2 billion during the first half of this year, suggesting that demand remains healthy.

Except for RLC and Century Properties Group Inc., Lañeda reported that most companies under its coverage registered solid growth in take-up sales.

Absence or lack of new launches was the reason for decline in take-up sales of RLC and CPG. Excluding these companies, take up sales for the first half of the year up 8.2 percent year-on-year to P159.7 billion.

Along with residential revenues, recurring income of property companies continued to grow in the first half, driven primarily by expansion in leasable space.

The first semester market analysis, further revealed that recurring revenues which include office, retail and hotel revenues, rose 12.1 percent year-on-year to P43.22 billion for ALI, MEG, RLC, SMPH, FLI, and CPG combined.

"We expect recurring revenues to continue growing going forward as property companies remain bullish on the office and retail sectors and expand their leasing portfolios," said Lañeda.

Lañeda added that the continuous growth will not only drive earnings, but also improve the long term sustainability of property companies "as this increases their recurring cash-flow base to fund interest payments and other capital expenditures." — Ehda M. Dagooc (FREEMAN)