Opportunities Still Abound in Real Estate despite Challenges — May 27, 2017 Manila REI Meetup
This week we had an enlightening session on development in the Metro Manila area. Ayala Premier hosted this week’s meetup, and they were kind enough to show a 3D map of the Manila area. Of course, they highlighted their projects as well. Here’s a picture of the group as we listened in to the presentation
I’d like to share with you some of the learnings we had during the Ayala session:
1. Ayala properties get bought fast by previous investors
Mostly because these previous investors already trust that they would get quality products and perhaps decent or even substantial returns from Ayala project. Certain projects get bought out within the day it is introduced.
2. A shift in monopolizing and master-planning a whole city is underway
We have seen this in Arca South and now Evo City. Ayala claims that this is to ensure that the projects deliver a consistent quality to their customers. As a bonus, this would also make sure that the properties can be sold at prices that Ayala can control across the board.
3. Infrastructure plays an important role on city development
The masterplanned Ayala cities all sit near or at major infrastructure projects. They coordinate the government in this matter and also have their own infrastructure development company. This ensures that their projects would most likely have advantages on accessibility and future developments compared to other developers.
A lot more questions were thrown about other developers and whether it was more advantageous to buy near or at an Ayala property. This was covered in a previous post.
Other members of the meetup continued our chat over lunch. Two interesting notes about it:
1. Unique opportunities in foreclosure investments combined with renovation works still present themselves
There was a story about a self-liquidating asset that was structured in such a way that all floors, even the rooftop, made some money. It was essentially a 30% cash on cash return per year, a truly surprising statistic.
2. Property management is crucial for large scale build and sell businesses
While build and sell could be a very profitable business in real estate, sometimes big developments need a good property manager to be a sellable asset. Big developments are normally income generating assets that can be sold to others. Just look at how SM Investment Corporation bought MyTown, a dormitel chain in the Philippines.
All the discussions make me optimistic that no matter what’s happening in the market, there are always opportunities available for the serious real estate investor. It just takes some creativity and effort, but if you have that, then real estate might just be the right investment tool for you.
ABOUT THE AUTHOR
Ian Mallari is the founder of Manila REI Meetup group. It is composed of various types of investors, professionals, and specialists involved in Real Estate Investing. Manila REI Meetup meets every Saturday in Makati. Join us by signing up here.
He is also the lead consultant of the financial consultancy firm. He works with medium and large sized corporations/businesses in securing funding for their businesses. Right now, he works mostly with AA and AAA contractors for private sector projects. Visit ianmallari.com for more details.