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Philippines Property Summary

Core Content

This document provides an analysis of the property sector in the Philippines, with a specific focus on the province of Iloilo and its growing significance in the real estate market. The key players in Iloilo's property development include Megaworld Corp (MEG), Ayala Land Inc (ALI), SM Prime Holdings (SMPH), and Double Dragon (DD), with MEG and ALI having the largest presence in the province. The document also highlights the role of the government in supporting Iloilo's development through infrastructure projects.

Main Points

Iloilo's Economic and Urban Development

• Iloilo is the regional center of Western Visayas for commerce, business, and education.
• It is now a highly urbanized province.
• Western Visayas was the fifth largest contributor to the country's GDP in 2013.
• The province has a service-oriented economy, with the service sector accounting for 58% of regional GDP.
• Iloilo City has a large population, which serves as a manpower pool and growing consumer market.
• The city has a favorable income distribution, leading to high purchasing power.
• It has 22 tertiary schools, providing a steady supply of multi-skilled manpower.

Property Development in Iloilo

• MEG's Iloilo Business Park is a 73-hectare township development, expected to cost PHP35b over 10 years.
  • Includes residential, office, retail, and hotel components.
  • The Richmond Hotel is set to open in August 2015, and the Marriott Courtyard Hotel is expected to open in 2016.
  • The project includes 1.1km retail strip and 230Ksqm GFA for commercial use.
• ALI's Atria Business District and Avida Iloilo are part of multi-year developments expected to cost PHP15-20b.
  • Includes residential, retail, and BPO buildings.
  • Atria Park District will have 13 residential towers, ~2,800 units, and a Qualified Hospital.
• SMPH's SM City Iloilo is undergoing expansion, with an additional 60k sqm GFA expected.
  • Likely to include residential and hotel projects in the future.
  • It will feature international retailers such as Uniqlo and Forever 21.
• DD has completed three projects, including the Happy Homes and Uptown Place residential developments.
  • Plans to expand with three Citymalls in Iloilo.
  • The first Citymall is 70% complete and set to open in August 2015.

Government and Infrastructure

• The government is contributing to Iloilo's development through infrastructure projects, including road improvements, flood control, and a bridge project.
• The Parola Ferry Terminal is a public-private partnership (PPP) project that will enhance connectivity between Iloilo and Guimaras.

Key Information

• Iloilo is becoming a key player in the property sector due to its geographical diversification, economic growth, and infrastructure development.
• The sector is rated OVERWEIGHT, indicating strong long-term growth potential.
• The favorites among the listed companies are ALI, MEG, and SMPH.
• MEG is rated BUY with a 42.9% upside.
• ALI is rated BUY with a 32.3% upside.
• SMPH is rated BUY with a 10.1% upside.
• RLC is rated HOLD with a 5.8% upside.
• VLL is rated BUY with a 32.3% upside.
• FLI is rated BUY with a 29.0% upside.

Analyst and Research Team

• Rommel Rodrigo is the analyst who prepared this report.
• The research team includes:
  • Sadiq Currimbohy – Regional Head, Research & Economics
  • Wong Chew Hann, CA – Regional Head of Institutional Research
  • Ong Seng Yeow – Regional Head of Retail Research
  • Suhaimi Ilias – Chief Economist (Singapore | Malaysia)
  • Luz Lorenzo – Philippines
  • Tim Leelahaphan – Thailand
  • Juniman – Chief Economist, BII (Indonesia)
  • Jigar Shah – India
  • Anubhav Gupta – India
  • Vishal Modi – India
  • Abhijeet Kundu – India
  • Neeray Dalal – India
  • NG Wee Siang – Singapore
  • Gregory Yap – Singapore
  • YEAK Chee Keong, CFA – Singapore
  • Derrick Heng, CFA – Singapore
  • Joshua Tan – Singapore
  • WEI Bin – Singapore
  • John Cheong – Singapore
  • Truong Thanh Hang – Singapore
  • Isnaputra Iskandar – Indonesia
  • Rahmi Marina – Indonesia
  • Aurelia Setiabodi – Indonesia
  • Pandu Anugrah – Indonesia
  • Janni Asman – Indonesia
  • Adri Tasmin – Indonesia
  • THAI Quang Trung, CFA – Vietnam
  • Le Nguyen Nhat Chuyen – Vietnam
  • NGUYEN Thi Ngan Tuyen – Vietnam
  • TRINH Thi Ngoc Diep – Vietnam
  • PHAM Nhat Bich – Vietnam
  • NGUYEN Thi Sony Tra Mi – Vietnam

Conclusion

Iloilo is a prime example of how property companies are diversifying geographically to sustain long-term growth. The province's economic dynamism, urbanization, and infrastructure development make it an attractive location for investment. The presence of MEG, ALI, SMPH, and DD in Iloilo, along with government support, indicates a strong growth potential for the property sector in the region.