Asian Real Estate News: Indonesia, Philippines, China, Thailand
State-controlled construction firm, Adhi Karya, has at least five property projects in the pipeline, with investment value estimated at around Rp 2 trillion ($208 million), said the company’s president director, Kiswodarmawan over the weekend.
The projects are the Grand Taman Melati Margonda Apartment in Depok, the Grand Dhika Hotel in Blok M, the Grand Dhika City in Bekasi, the Taman Dhika residence in Cinere and the Taman Dhika residence in Sidoarjo, East Java.
Kiswodarmawan said Adhi Karya will spend Rp 605 billion for the initial stages of the five projects.
“We have been engaged in the property and real estate business since 2011,” he said. “This expansion is in line with the high market demand as well as improving the company’s portfolio.”
Kiswodarmawan said that despite these projects, Adhi Karya will continue to focus on its core businesses — infrastructure projects and engineering, procurement and construction.
“We are also looking to expand in the property and real estate business,” he added.
He said that the company’s property portfolio will be handled by two subsidiaries, Adhi Persada Properti and Adhi Persada Realti, both of which were established to increase the recurring income sourced from the property sector.
Kiswodarmawan said that demand for residences will remain strong in the coming years, which is expected to reach as high as 720,000 units a year.
Adhi Karya’s corporate secretary, Amrozi Hamidi, said that the company plans to spend big to support its plans in the property business.
“We have allocated Rp 155 billion for property, Rp 289 billion for real estate and Rp 151 billion to develop a hotel next year,” Amrozi said.
In addition, Adhi Persada Realti, a subsidiary of Adhi Karya, will start the construction of a Rp 800 billion apartment complex in Pejaten, South Jakarta next year, said its president director, Giri Sudaryono.
“The apartment, which will be built over a 1.4 hectares land, will have 1,000 units,” he added.
Property giant Ayala Land Inc. and the Gatchalian family have finalized a deal to develop 17 hectares of the latter’s “Plastic City” estate
in Valenzuela City, envisioned to be redeveloped into a mixed-use urban complex in northern Metro Manila.
Philippine Estates Corp. (PHES), the Gatchalians’ property development arm, disclosed to the Philippine Stock Exchange on Tuesday the signing of an agreement with ALI’s Avida Land to develop the company’s properties in Valenzuela.
This deal comes about a week after the signing by PHES of a memorandum of agreement with ALI’s low-cost residential unit, Amaia Land, to likewise develop the former’s property in Cavite into a residential or subdivision project.
PHES is one of the owners of the property that Avida proposes to develop in Valenzuela. “The agreement signed is an initial step to move forward planning and developing the area,” a spokesperson from ALI said.
The 17 hectares covered by the deal is part of the Gatchalian family’s 60-hectare former plastics manufacturing hub, but ALI president Antonino Aquino said the Ayala-controlled real estate firm was interested to develop the entire area under a mixed-use masterplan.
But Aquino said the plan would be to pursue the development in parcels.
The Gatchalian’s Plastic City Industrial Corp. (PCIC) has long ceased its plastics manufacturing and commercial operations due to continued losses, but its subsidiaries have leased out its warehouse and building facilities in the estate.
ALI had been in talks with the Gatchalians for over a year for the development of the property in Valenzuela, which has a lot of spending power especially because it has a number of large industrial manufacturers as locators.
Through these property deals with the Ayala group, the Gatchalian family, for its part, seeks to unlock more values from its real estate assets, taking advantage of the robust property market in the country.
It was earlier reported that the redevelopment planned by the Gatchalians for Plastic City would include an educational complex envisioned to be a smaller version of the UP technohub in Quezon City. It also aims to build office space that will attract business process outsourcing (BPO) companies, banking on expectations that more and more BPO locators will move outside the main central business districts in search of other hubs around Metro Manila.
Part of the proposed master plan is likewise to put up a new hospital to serve Valenzuela City. The residential portion is envisioned to offer townhouses and condominiums for different market segments.
More Chinese cities saw home prices rise month on month in November amid the government’s strict measures to cool the sector, the National Bureau of Statistics (NBS) said on Tuesday.
In November, 53 out of a statistical pool of 70 major cities recorded higher new home prices than a month earlier, NBS statistics showed. This was up from 35 in October.
New home prices in 10 cities declined last month, down from 17 in October, while those in the other seven cities were unchanged.
On a year-on-year basis, 25 cities saw rises in new home prices last month, up from 12 in October. Prices in 41 cities dropped year on year, down from 56 in October.
Runaway real estate prices have been a significant source of public complaint in recent years, forcing the government to implement a string of policies like bans on third-home purchases and property tax trials to keep prices down since early 2010.
However, the property market has shown signs of warming up in recent months, after the central bank earlier this year twice cut interest rates and banks’ reserve requirement ratio to buoy the economy.
China’s annual economic growth slipped to 7.4 percent in the third quarter this year, slowing for seven quarters in a row.
Housing transactions have gradually picked up since early 2012, NBS data showed.
Total home sales surged 9.5 percent year on year to 5.35 trillion yuan ($850.83 billion) in the first 11 months, accelerating from a rise of 5.6 percent seen in the January-October period, according the NBS.
Wang Tao, chief economist with UBS Securities, said the property sector has rebounded steadily since early this year, partly because the government did not take further measures to curb the market in 2012.
“The property industry is undoubtedly a crucial sector for the country’s economy, and the sector’s rebound has played a key role in bolstering China’s recent economic recovery,” Wang said.
The government will continue its property market controls next year, according to a statement released after the central economic work conference, held last weekend to set the tone for economic policymaking next year.
The meeting also attached great significance to urbanization, which has been considered a main driver for domestic demand and will be actively and steadily pushed forward in 2013, said the statement.
The country’s urban population, which outgrew that of rural areas for the first time at the end of last year, is expected to account for 70 percent of the total population by 2030, according to a World Bank forecast.
However, urbanization will put great pressure on the real estate market and make the country’s property curbs more difficult.
If housing sales continue the momentum of growth seen this year, housing prices may rise in more regions and at faster rates than before, Wang said.
“But as the economic recovery is still at an initial stage, the government is likely to remain cautious about property control in the short term,” the economist added.
The government said at the economic work conference that it will maintain a proactive fiscal policy and prudent monetary policy in 2013 as it expects the global economy to maintain slow growth.
This year, Raimon projected revenue of 6-7 billion baht. It recorded net profit of 292 million baht on revenue of 3.2 billion baht in the first nine months.
Over the next two years, it targets revenue of 7-8 billion baht a year.
At the end of the third quarter, Raimon had five condominium projects with remaining units for sale.
They include the 15-billion-baht The River with 20% of units remaining; and the 9.6-billion-baht 185 Rajadamri and the 2.8-billion-baht Zire Wongamat in Pattaya, each with 29% of the units available.
The developer also has 71% unsold units at the 2.95-billion-baht Unixx and 24 units at the 4.9-billion-baht Northpoint. Both are in Pattaya.
Mr Viriot said the company is selecting an international hotel chain to operate some of the remaining units on five floors at The River, which will be turned into a serviced apartment to be launched next month.
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