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THE
continued increase in prices of construction materials,
mainly cement and steel, has prompted property companies
to raise unit prices of their projects.
Two
high-end property developers are raising the prices of
their products to recoup rising costs as construction
materials and labor becoming more expensive.
In spite
of the resulting higher list prices of their products,
Anchor Land Holdings Inc. (ALHI) and Megaworld Corp.,
whose shares are both traded at the Philippine Stock
Exchange, said investments in property remain a strong
hedge against rising inflation.
Megaworld said property buyers can still get better
returns on investments despite rising unit prices as
property assets continue to appreciate.
“Rather
than buying a brand-new car, which depreciates over
time, I’d rather invest in a house or condominium unit
because I’m sure that its value will appreciate years
after,” said executive director Kingson Sian.
He said
the company, whose expertise is both on residential and
office developments, will raise their prices by 10
percent to 20 percent, depending on the type of project.
“This is
a buffer for us to weather rising construction
materials. The good thing is that the banking sector is
still quite healthy and can offer home mortgages to
property buyers,” Sian said at the sidelines of
Megaworld’s annual stockholders’ meeting Friday.
The
Andrew Tan-led company is launching 17 new residential
projects within Metro Manila this year, with total
projected revenues of about P26 billion. It is
expanding its development plans as it remains bullish
about the prospects of the property sector.
“Real
estate remains a preferred asset class to hedge against
inflation,” said Tan.
Tan
expects the company to record a net profit of about P3.8
billion this year. In 2007 it made a profit of P3.03
billion.
Megaworld reported that its sales to overseas Filipinos
workers and their families grew 158 percent in the first
five months of the year compared with the same period in
2007. The property companies are also forced to raise
prices as their suppliers have also hiked their charges.
“We’re
feeling lots of pressure now. Even our contractors have
raised their fees,” said ALHI chief executive Steve Li.
He said
the company has raised the unit prices of Mandarin
Square, a 39-story luxury high-rise condominium being
constructed along Ongpin Street in Binondo, Manila, for
a third time since last year. The project is up for
completion by the first quarter of 2010.
ALHI is
also spending P2 billion for the development of Solamare,
a twin-tower project near the Mall of Asia. Each tower
will have 18 floors and will combine for over 900 units.
A one-bedroom unit now costs P2 million.
Li said
the groundbreaking for the project is scheduled next
month and completion is expected in three years.
Another
project is the P3-billion, 50-story high-rise
condominium development in Binondo, Manila. It will sit
on a 3,100-square-meter lot, which ALHI earlier acquired
from Gotamco Investment Realty Corp. |
