Developer reports growth in residential sales amid pandemic

SM Development Corp. (SMDC), the residential arm of SM Prime Holdings Inc., reported a 6-percent growth in topline revenue in 2020 to P46.5 billion from P43.7 billion in 2019 despite the impact of the pandemic.

It said operating income also grew 16 percent to P19.7 billion from P17.0 billion in 2019.

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SMDC said reservation sales also increased 10 percent last year, bringing the sales take-up to P99 billion in 2020.

Ayala Land Inc. (AL) said while sales were affected by COVID-19, it saw recovery from the third to the fourth quarter.

ALI President and CEO Bernard Vincent O. Dy said the company’s performance in the latter part of the year was encouraging and provided a baseline for recovery plans moving forward.  

ALI said while revenues from property development dipped to P66.5 billion last year because of construction restrictions and lower bookings, this jumped 64 percent to P25.8 billion in the fourth quarter from the third quarter of 2020.

Market research firm Colliers International Philippines said "prices and rents corrected in 2020 due to dampened demand.  "We do not see a recovery in the next 12 months," it said.

Colliers said only 3,370 new residential condominium units were completed in Metro Manila last year, down 70 percent from 11,233 units in 2019.

"We expect a slight rebound in supply in 2021 as selected projects due to be completed in the fourth quarter of 2020 were delayed to 2021," it said.

It said capital values of residential projects went down by 13.2 percent in 2020, following the 26-percent rise in 2019.  Colliers said it expects a slow recovery of prices starting 2022, supported by a slow rebound in Metro Manila office leasing starting 2022.

Colliers said that in terms of rents in the secondary residential market, the rate declined by 7.8 percent at the end of 2020, a reversal of the 6.9-percent growth in 2019.  "We expect a slight rise in rents starting 2022," it said.

Colliers said developers should continue to adapt to the evolving preferences of investors and tenants to survive in a property market that has been redefined by the pandemic. 

"In our opinion, developers should continue converting and repurposing assets to take advantage of opportunities brought about by a lockdown economy. We recommend that developers and tenants continue to monitor opportunities in the market especially with the government-projected economic rebound in 2021," it said.

"In our view, office landlords should be proactive in offering alternative leasing schemes to tenants while mall operators and retailers should ramp up omnichannel strategies to take advantage of pent up demand. Condominium developers should be on the lookout for attractive sites and price segments," Colliers said.

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