Real Estate Industry in the Philippines Analysis

Table of Content

Real estate companies specialize in constructing various types of properties such as residential apartments, shopping centers, factories, retirement homes, and offices. XRC resources is a subsidiary of real estate companies that focuses specifically on developing community malls within the retail sector.

According to the Department of the National Statistics office, a total of 28,347 buildings/houses were constructed in the 1st quarter of 2011, with a cost of about P52,771,886 thousand. In the 2nd quarter, there were 27,525 buildings/houses costing P55,669,177 thousand. The 3rd quarter saw the construction of 25,255 buildings/houses at a cost of about P41,628,460 thousand. The data for the fourth quarter of that year has not yet been released.

This essay could be plagiarized. Get your custom essay
“Dirty Pretty Things” Acts of Desperation: The State of Being Desperate
128 writers

ready to help you now

Get original paper

Without paying upfront

Among these constructions, there were also 6,194 commercial buildings with a cost of P41,208,750 thousand. When comparing the value of all buildings/houses to the previous year’s data , there was an increase in growth for both the first and second quarters with rates reaching 11.6% and 13.4% respectively. However,the third quarter experienced negative growth at -10%.

The overall boost in the Philippines was a result of increased money spent on construction. In the same year, real estate, renting, and business activities contributed an estimated total amount of P514,808 million (not including the 4th quarter) pesos to the GDP, accounting for 7.35%. This industry is ranked third after “Trade and repair of motor vehicles, motorcycles, personal and household goods” (P1,181,494 million) and “Manufacturing” (P1,428,330 million) as one of the top money generators. Comparing the 1st through 3rd quarters of 2011 and 2010 shows an impressive 11.19% increase in peso generated which indicates substantial industry growth.

In the Philippines, the real estate industry witnessed a rise in employee figures from 3,200 in 2010 to 3,400 in 2011. This growth mirrors the country’s requirement to adapt its environment to support its fast progress. The information demonstrates that the real estate sector is actively meeting this demand by consistently erecting more structures while upholding superior benchmarks and integrating advancements into their endeavors. As a result, they can provide buildings for various intents such as residential and non-residential applications like offices, shopping malls, and factories.

Both provinces and Metro Manila are presently undergoing major construction projects with the goal of transforming them into cities and establishing a world-class metropolis. This development is attracting overseas Filipino workers, foreigners looking for permanent residency, and tourists interested in vacationing in the Philippines. Additionally, there is a rising demand for business process outsourcing (BPO) companies, which is bolstering income and employment opportunities within the country. As a result, consumerism is on the rise, leading to an increased need for improved residential units and additional commercial spaces.

Due to its significant growth and development, rising tourist arrivals, and thriving business process outsourcing (BPO) sector, the Philippines is seen as an attractive investment opportunity for foreign investors. These factors are influenced by the real estate industry and are expected to transform the country into a developed nation with modern metropolitan areas suitable for living and doing business. This, in turn, is anticipated to increase the price of real estate and provide a strong foundation for further industry growth.

In the retail leasing industry, SM Prime Holdings is one of the largest players. It has undergone a transformation from being a shoe store to becoming a major player in the Philippine real estate sector. With its presence nationwide, SM Prime Holdings has turned its malls into premier destinations for shopping and leisure activities.

The company currently operates a total of 45 malls, with 41 located nationwide and an additional 4 in China. They have plans to further expand their presence by constructing 5 more malls outside Metro Manila and an additional 3 malls in China. In terms of financial performance, the company experienced significant growth in 2011 with a net income of Php 9.1 billion, representing a 15% increase compared to the previous year. Gross revenue also saw a notable rise at 13%. It is worth noting that these figures exclude profits generated from operations in China. The company attributes this impressive growth to various factors including higher occupancy rates, expansion of commercial spaces, energy cost reduction efforts, and operational system enhancements. Looking ahead, the company aims to continue their expansion endeavors by constructing new malls both within the Philippines and in China.

In 2012, China allocated Php 21 billion for capital expenditure, while the Philippines and China had Php 14 billion and Php 7 billion respectively. Robinsons Land Corporation, a subsidiary of JG Summit Holdings Inc., is the real estate investment branch. It engages in various ventures like mall operations, hotel development, office projects, residential buildings, and other multipurpose properties. Known for its extensive portfolio and ongoing growth, the company occupies a prominent position in the Philippine real estate industry.

The retail leasing industry is highly dependent on foot traffic to attract tenants, which is reflected in the success of Robinsons Prime Holdings. As of 2011, the company possesses 29 malls nationwide, including 6 in Metro Manila and 23 in other provincial cities throughout the Philippines. To sustain its growth momentum, Robinsons Prime Holdings plans to open 7 new malls and 3 expansion projects in different regions. In 2011, the commercial center division alone generated a revenue of Php 6.21 billion for the company.

The definition of “good” in terms of tenants for a shopping center includes those who can pay on time and are profitable or branded. Before developing a shopping center, the company must assess the location’s readiness by looking for signs of development and determining if the market has sufficient buying power. After the shopping center is developed, it is crucial to have a tenant mix that can attract a crowd. This tenant mix should align with the specific location’s demographic needs. In the Philippines, different demographics share similar values such as the importance of family and love for food.

It is crucial to have a sufficient number of food stalls or franchises within the mall, along with other stores that can provide entertainment for every family member as they navigate through the mall. However, there are still differences between communities, such as spending habits and purchasing power. In addition to a diverse tenant mix, malls attract customers through special events and shows, including art galleries in upscale malls like Shangrilla or community-based events like talent shows in smaller shopping centers.

These companies primarily generate income through rent collected from their tenants. It is crucial for the company that tenants are able to make profits in their establishment in order for the contract to be sustained. Various factors appeal to tenants, including foot traffic at the commercial space, a reputable brand like SM, rent rates, and the location of available space within the mall. These factors contribute to tenant profitability. The acquisition of desirable tenants and high foot traffic are interdependent as they mutually attract each other.

The B. Technological Environment focuses on emerging technologies and their impact on industry practices. One such technology is geo fences, which are virtual perimeters set around a specific location or area. These virtual perimeters utilize Global Positioning Satellite (GPS) technology to track individuals within the designated area, monitoring their movements as they enter or leave. To enable tracking, individuals or units must be equipped with a GPS chip or a wireless technology with built-in GPS functionality. Geo fences have gained significant popularity due to their numerous benefits, being utilized for tracking purposes in various scenarios such as family members, employees, delivery trucks, and cargo.

The real estate industry can utilize this technology by automatically sending email or text notifications to potential buyers when they enter a specific geographic area. This notifies them of nearby properties. To avoid overwhelming potential buyers with too many messages, online portals can request details about their preferred real estate and match them with their database. As a result, only geo fences surrounding the properties that match their preferences will trigger a message alert. Smart concrete

Dr. Deborah D. L. Chung from the State University of New York at Buffalo created smart concrete, which incorporates carbon fiber reinforcement at a ratio of 0.2% to 0.5% of its volume. This reinforcement significantly enhances the strength of the concrete and its capability to detect strain or stress. By sensing stress, smart concrete can continuously assess the condition of a structure and identify potential structural defects before they become severe and cause damage. This technology reduces the time and effort required for structural monitoring, allowing owners to proactively prevent collapse.

Smart concrete is more durable and has better flexibility and energy absorption compared to regular concrete. Although it is still being tested and not currently available for purchase, it is projected to be approximately 30% more expensive than conventional concrete, but still less costly than installing sensors in buildings.

Furthermore, the real estate sector operates cyclically, meaning it undergoes periodic fluctuations due to its dependence on consumer purchasing power during specific time periods.

Having a thorough comprehension and awareness of market trends is crucial in order to attain stability or expansion within the industry. Trying to invest in properties during a market decline may prove pointless as consumers have limited disposable income. In the retail real estate sector, tenants might face difficulties in fulfilling rental obligations or choose to shut down operations, particularly small businesses, during economic downturns. Consequently, it would be unwise to initiate the construction of a new mall during these periods.

When the economy is booming, there is a greater demand for commercial spaces as individuals have more disposable income and may consider continuing, expanding, or initiating new businesses. Conversely, during sluggish markets, it can be advantageous to acquire real estate at discounted prices with future utilization in mind. The stock market often serves as an indicator of the state of the real estate industry since both sectors generally exhibit comparable trends. This correlation is likely attributed to investors having additional capital to invest in properties after earning significant profits in the stock market.

It is crucial for retail real estate developers to anticipate future market trends before constructing a new shopping center, as the time required for building depends on the size of the establishment. In situations where there is a high demand for commercial space and constructing a new facility is not feasible, mall owners can adapt by renting out spaces within their existing malls that were not initially intended for leasing, according to D. Natural Resources Environment.

With the ongoing development in the Philippines, more resources are being used, particularly due to the growing number of construction projects. In the National Capital Region, certain construction materials have been identified as a standard for price hikes. Generally, material costs experienced a 5.0% increase in July compared to 4.7% in June, based on the year-on-year price index comparing 2012 to 2000.

These are the sources:

“Philippine Real Estate Overview.” (source:
“Real Estate Philippine Industry 2009, and Forward to 2010.” (source:
“National Accounts.” (source:, date: February 25, 2012)
“Number, Floor Area and Value of Construction, by Type and by Province: First Quarter, 2011.” (source:, date: July 8, 2011)
“Comparative Construction Statistics by Type of Building: Philippines, Second Quarter 2011 and 2010.” (source:, date: October 17, 2011)
“Comparative Construction Statistics by Type of Building: Philippines, Third Quarter 2011 and 2010.” (source:, date: December 29, 2011)
“Tourist Arrival Numbers Increases in the Philippines.” (source:, date: September 19, 2009)
“Smart Concrete.” (source:

Thorman, Chris. “Searching for Real Estate Made Easy: Geo-Fences Plus Mobile Phones.” N.p., 4 Mar. 2010. Web. 20 Aug. 2012.
“GlobalTrackingSystem.Com GTS Internet Services.” N.p., n.d. Web. 20 Aug. 2012.
Mckey, Stan. “Philippine-Filipino Values.” Http:// N.p., n.d. Web. 20 Aug. 2012.
Shopping Center Business.” Startupbizhub. N.p., n.d. Web. 20 Aug. 2012.
SM Prime Holdings Inc. 2011 Annual Report Creating Value At All Times. Pasay City: SM Prime Holdings, 2011. SM Prime. Web. 20 Aug 2012.
Robinsons Land Corporation. 2011 Annual Report. Pasig City: Robinsons Land Corporation, 2011. Robinsonsland. Web. 20 Aug 2012
Dela Cruz, Billy. “The Philippine Real Estate Industry: Standing Tall.” N.p., 24 Sept. 2008. Web. 20 Aug 2012.
Market Publishers.“Philippines Real Estate Report Q2 2012.” Business Monitor International.Market Publishers, 28 Feb. 2012.Web.20 Aug. 2012.

Cite this page

Real Estate Industry in the Philippines Analysis. (2017, Feb 05). Retrieved from

Remember! This essay was written by a student

You can get a custom paper by one of our expert writers

Order custom paper Without paying upfront