Real Estate Industry in the Philippines

Topics: Shopping mall, SM Prime Holdings, Metro Manila Pages: 7 (2238 words) Published: December 10, 2012
The Industry
a.) Brief background and history ( size, importance, market and growth trends)

Real estate companies deals with the development retail, industrial, residential, medical and business office facilities and buildings. These can be residential apartments, shopping centers, factories, retirement homes, offices and etc. XRC resources holds companies under it that develop community malls falling under the retail category.

According to the Department of the National Statistics office there were 28,347 buildings/ houses constructed in the 1st quarter of 2011 costing about P52,771,886 thousand, 27,525 in the 2nd quarter costing P55,669,177 thousand, 25,255 in the 3rd quarter costing about P41, 628,460 thousand and with the fourth quarter of that year yet to be released. 6,194 of which were commercial buildings costing P41,208,750 thousand . Comparing the value of the buildings/houses to the previous year, quarter per quarter there was a 11.6% growth for the 1st quarter, 13.4% for the 2nd quarter and a -10% growth for the third. Resulting in an overall increase in money spent for construction. During the same year real estate, renting and business activities generated a estimated total amount of P514, 808 million (not including the 4th quarter) pesos contributing 7.35% to the Philippines GDP being one of the top industries that generates the most money, third only to “Trade and repair of motor vehicles, motorcycles, personal and household goods”(P1,181,494 million) and “Manufacturing” (P1,428,330 million). Comparing the 1st through 3rd quarters of 2011 and 2010 there was an 11.19% increase in peso generated showing a large growth in the industry. On that note, the real estate industry during 2011 also had 3,400 employees that increased by 200 since 2010.

The Philippines is a fast developing country needing a continuous change in its landscape to accommodate its growth. From the data acquired we can see that the Philippines’ real estate industry is doing just that. Continuously increasing both the quality and number of buildings being developed, meeting higher quality standards and boasting growth and innovations in their productions. Providing buildings for both residential and non-residential use such as offices, shopping malls and factories. We can see widespread construction that constantly transforms provinces into cities and Metro Manila as a world-class metropolis. Attracting both oversees Filipino workers and foreigners wanting to establish permanent residence and tourist wanting to take a vacation here in the Philippines and supplying the demand of the upsurge in business process outsourcing (BPO) companies creating an increase in income and employment for the Philippines. This increase in employment fuel consumerism and resulted in a demand for better residential units and more commercial spaces. In effect foreign investors sees the Philippines as a viable investment opportunity due to the large growth and development, the steady increase in increasing tourist arrivals and business process outsourcing (BPO) that are all affected by the real estate industry in one way or another. Thus the Philippines is expected to emerge as a developed country with modern metropolitan areas conducive to live and to do business in subsequently increasing the price of real estate and laying a solid foundation for further industry growth.

b.) Industry structure (profile and history of major players - their size, scope, profitability, influence, strategies, resources and value networks)

There are numerouse players in the retail leasing industry and two of the biggest names are

SM Prime Holdings

SM Prime Holdings has gone a long way from being a shoe store to one of the major players in the Philippines and the Real estate industry. The company can be found nationwide, transforming its malls into prime destination for shopping and leisure. Currently holding 41 malls nationwide, 4 malls in China and...
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