Davao: Fast-rising property market

BY ALBERT CASTRO

DAVAO City is fast becoming a spot of robust housing development, with new players channeling their resources to this Southern Philippine city apart from the usual strategy of focusing on major Philippine cities like Metro Manila and outlying areas, and Davao’s neighbor Cebu City in Visayas.

Developers like Vista Land and Phinma Property Holdings Corp. have found the Davao City property market lucrative that they are making their presence felt, complementing the activities of existing small players in the residential market as well as developers in the commercial sector.

The city’s characteristic as a "melting pot" makes it an attractive place to put up new homes, luring dwellers from neighboring areas, according to Phinma Property.

Villar-led developer Vista Land and Lifescape, Inc. noted that Davao City has its share of prospective buyers composed of overseas Filipino workers’ family, businessmen, and even expatriates.

Within Mindanao, Davao City is the largest city, covering 8 percent of the land area of Davao region (Southern Mindanao) alone, and is among the areas that attract major investments in Southern Philippines. For the whole Davao Region, it serves as the latter’s regional center.

With an international airport in its area, it is one of the primary destinations of travelers to the Philippines.

The 2007 census of the National Statistics Office placed its population at 1.37 million, up from the 2000 survey which placed its population at 1.15 million.

Commercially, Davao is increasingly becoming a preferred site for businesses, with the latest major investment being SM Investments, Corp.’s development of a 175,000-square meter mixed-use complex in Lanang district, which houses SM Investment’s flagship business of SM mall, a still to be constructed convention center, and a 200-room Radisson Hotel that will be developed in partnership with global hospitality firm Carlson group.

Early this month, conglomerate Ayala Corp. also opened its first shopping center in Mindanao, Abreeza, which is a joint-venture with Anflo Management and Investment Corp. (Anflocor). The 61,000-sq.m. Abreeza stands in a 10-hectare property which will also house residential and office space developments, and a boutique hotel.

Development was pegged at P3 billion when the project was conceptualized in 2008.

Marlon Escalicas, general manager of Vista Land’s Davao operations under the Camella brand, said these kinds of investments further boost the prospects of Davao’s residential market.

"The property segment is booming in Davao both for horizontal and vertical especially with the influx of new investments in the city," said Escales who is responsible for Vista Land’s project that caters to middle-income earners. Camella is Vista Land’s vehicle in developing properties that target middle-income earners.

In general, property buyers in Davao fall between the affordable and middle-income segments of the market, Escalicas said.

Among Vista Land’s project in Davao are Tuscana in Puan and Solariega in Talomo which are single-detached housing projects, and Camella Northpoint in JP Laurel, a condominium development.

Phinma Property, also a middle-income residential market player, said that because of Davao’s characteristic as a hub in Mindanao, it also attracts potential market from neighboring areas.

"Many families and businessmen outside Davao constitute the bulk of potential condo buyers because of the convenience and security that condo living offers," said Grant Orbeta, vice president for sales of Phinma Property.

"Most potential buyers are from outside Davao. Students who go to the good schools in Davao, businessmen & entrepreneurs who have established offices and shops in Davao," Orbeta said.

Phinma will launch its first project in Davao between end-2011 and early 2012, after initially focusing development efforts in Metro Manila. Phinma is known for its low-rise projects, which caters to the low-middle income segment of the market.

Both developers say that there is a surge in preference for condo-living in Davao.

Phinma Property said condo-living gets the nod of city dwellers because of its proximity to the city center that allows convenience in travelling to different parts of the city.

Orbeta said preference for condominiums is also driven by the congestion of Davao City’s downtown, ushering "a tendency to go vertical in the inner city."

"The uptrend in the condo market is unexpected since Davao has huge land area; there is already a shift or probably openess in preference," Escales said.

Escales though said that vertical developments might get competitive in the next five years as "several new players come in," tapping into the existing demand.

Prospects in the horizontal development or those in the single-detached housing projects, however will remain strong given Davao City’s vast land area, according to Escales.

Orbeta added that with the huge population and continuing growth of the city, Davao’s property market will remain "very robust" and "will continue to do so" in the years to come.

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