LAGUNA-BASED P.A. Alvarez Properties and Development Corp. (P.A. Properties) targets to complete 25 housing communities in five years to help the government fulfill its national shelter program aimed at addressing country’s current housing backlog.
The demand for housing through the years has outstripped supply, mainly due to rural-to-urban and intercity migration in major cities, such as Manila, Laguna, Clark, Cavite and Bulacan, where people believe there are better prospects for employment.
Based on the 2016 UA&P study, there was a surplus of around 253,300 high-end (or open market) houses and 307,740 mid-priced homes in 2015. The majority of them were located within the National Capital Region and other urban centers in the country.
Nevertheless, the housing segments intended for the poor and lower middle-income classes, which comprise 81.3 percent of the population, presented a different story.
In the socialized, economic and low-cost housing categories, for instance, the need was so high that it is expected to reach 10.1 million units by 2030.
To date, socialized housing has a backlog of 3,032,351 units, while the economic housing segment has 2,588,897. Based on reports, the number continues to rise by 168,000 to 190,000 units a year.
“As a result, prevalence of informal settlements that lack basic infrastructure and sustainable service has increased significantly across most towns and cities,” said Romarico Alvarez, chairman of P.A. Properties.
Thus, he said, addressing the need for housing will require investments beyond the capacity of the national and local budgets.
“The government needs to develop the synergies and participation of all stakeholders, including the private sector, employers, citizens and development partners in the provision of shelter,” he noted.
“For its part, the government knows that policy-making, land acquisition and a successful expropriation plan are critical to meeting the interests of the general public,” he added.
With nearly 25 years of experience in developing affordable housing and communities, P.A. Properties believes it is well-positioned to capitalize on the huge housing backlog with its development plans for 25 future projects estimated to generate up to P25 billion in revenues.
Out of its 137 hectares of land bank, the firm has already completed a total of 40 affordable housing communities, with 16 more under construction.
In 2017, the company executed a partnership deal with Japanese real-estate developer Hankyu Hanshin Properties Corp. to develop three township projects, equivalent to a total of 54 hectares with a projected revenue of P11.25 billion.
It ended the same year with P11.8 billion in total assets growing at a two-year compound annual growth rate of 25.3 percent, as it infused P835 million in equity, increasing its total equity to P3.1 billion.
“People migrating to the cities and who are looking for places to live in are taking matters into their own hands by occupying land—building shacks and makeshift houses on vacant lots. Unless the government and the private sector come up with solutions, the pattern of land occupations and the clamor for decent housing will likely continue,” Alvarez stressed.