The Philippine real estate and housing sector sustained its growth in 2023 despite a host of global and domestic challenges such as high inflation and interest rates.
Data from the Philippine Statistics Authority (PSA) showed that based on constant 2018 prices, the sector grew 3.6 percent in 2023, slower than the 5.3-percent expansion in 2022.
Real state, in particular, grew 5.1 percent, while ownership of dwellings rose 2.1 percent in 2023, slower than the increase of 9.8 percent and 1.5 percent, respectively in 2022.
The sector grossed P1.37 trillion in 2023, with real estate accounting for P692 billion and ownership of dwellings, P674 billion at current prices.
The growth was notable in key sectors such as residential, commercial, and industrial properties. The trend of mixed-use developments continued to gain popularity in 2023. These projects, which combine residential, commercial, and retail spaces in one area, offer convenience and efficiency to residents and tenants.
Affordable housing projects targeted at the middle-income segment also gained traction, supported by various financing options and government incentives. Developers also adapted to changing preferences, with a growing focus on eco-friendly and sustainable designs.
The growth of the sector allowed major developers to post strong revenues and profits last year.
SM Prime Holdings Inc., the largest developer, posted a P40-billion consolidated net income in 2023, or 33 percent higher than P30.1 billion in 2022 as consolidated revenues grew 21 percent to P128.1 billion from P105.8 billion.
SM Prime president Jeffrey Lim said the result reflects the strong support and trust from tenants and customers despite the economic challenges encountered in 2023. “We continue to see this growth momentum this year as we pursue our expansion plans in our key businesses, and explore new opportunities to expand our businesses,” he said.
SM Prime’s mall business accounted for 56 percent of the group’s consolidated revenues and posted a 30-percent growth in revenues to P71.9 billion. Mall rental income also rose 24 percent to P61.3 billion.
SM Prime’s residential business group, led by SMDC, recorded an 8-percent growth in revenues to P43.1 billion in 2023 from P40.1 billion in 2022.
Other key businesses, which include offices, hotels and convention centers, reported P13.1 billion in revenues last year, up 26 percent from P10.3 billion in 2022.
Ayala Land Inc. (ALI) also delivered strong results in 2023, fueled by robust property demand and heightened consumer activity. Its net income grew 32 percent to P24.5 billion as consolidated revenues increased 18 percent to P148.9 billion.
Property development revenues expanded 14 percent to P92.3 billion, driven by steady bookings and higher completion of residential projects and offices for sale. Residential reservation sales grew by 9 percent year-on-year to P113.9 billion.
Ayala Land launched 14 projects in the fourth quarter of 2023 with a combined value of P39.6 billion. These include AyalaLand Premier’s first signature line project, Park Villas in the Makati CBD and sequel phases of its existing gated community developments.
These new projects brought Ayala Land’s total launches to 25 projects valued at P75.9 billion in 2023.
“Ayala Land was well-positioned to take advantage of opportunities from an improving market in 2023, enabling us to meet our objectives for the year,” said ALI president and chief executive Anna Ma. Margarita Bautista-Dy.
Ayala Land launched four new estates in 2023 including the 55-hectare Batangas Technopark in Padre Garcia; the 32-ha. Centrala in Angeles City, Pampanga; the 800-ha. Southmont in Silang, Cavite; and the 62-ha. Arillo at Nasugbu, Batangas.
Meanwhile, Megaworld Corp., the biggest township developer, said its 2023 net income surged 26 percent to P19.4 billion as consolidated revenues increased 17 percent to P69.7 billion.
“2023 marked a pivotal moment for Megaworld as our financial milestones showcased our strategic agility and innovations in our product offerings. This proves our ability to adapt and thrive in changing times to reach new heights,” said Kevin Tan, chief executive of Alliance Global Group, the parent company of Megaworld.
Real estate sales grew 16 percent to a record P42.7 billion, buoyed by strong bookings. Reservation sales reached P139-billion, up 17 percent year-on-year.
The company in 2023 launched Baytown Palawan in Puerto Princesa City, overlooking the Puerto Princesa Bay. The six-hectare development marks the 31st township of the company.
Megaworld introduced new projects worth P72.6 billion last year, or 61 percent more than P45 billion in 2022. These projects include Positano Mactan at The Mactan Newtown in Cebu worth P2.2 billion and Paragua Sands Hotel at Paragua Coastown in San Vicente, Palawan worth P4.2 billion.
Leasing revenues also reached new record levels in 2023 as total revenues from Megaworld Lifestyle Malls and Megaworld Premier Offices climbed 14 percent to P17.9 billion.
Office revenues rose 3 percent to P12.6 billion as the country’s office industry faced headwinds during the year.
Filinvest Land Inc. (FLI) also reported that its net income attributable to equity holders of the parent reached P3.77 billion in 2023, up 30 percent from 2022. Consolidated enues and other income increased 13 percent year-on-year to P22.55 billion from P19.94 billion in 2022 on strong contribution from residential and leasing business segments.
“We are very pleased to report Filinvest Land’s financial results in 2023, which were driven by the consistent and robust performance of our residential business segment. This was driven by increasing sales to our overseas Filipino workers, alongside the strategic expansion and regionalization of our sales network,” said FLI president and chief executive Tristan Las Marias.
