Sy-led SMDC targets OFWs abroad or home for Christmas
MANILA, Philippines - Sy-led property firm SM Development Corp. (SMDC) will aggressively target the overseas Filipino workers (OFW) market both abroad and when they come home for the Christmas holiday.
According to Henry Sy Jr, CEO of SMDC, this move comes as they are seeing more and more OFWs invest their money into property in the Philippines.
“Our peso is getting stronger which means the money OFWs send into the Philippines will be of less value. In order to make sure their money doesn’t keep devaluing they buy property straight away as a form of investment,” explained Sy Jr, son and namesake of the country's richest man, during a media roundtable on Tuesday, December 11.
The company is also expecting a boost in interest during the Christmas period. “This is a time when OFW’s come home and they have a window where they can look at property and buy so we get more inquiries and buys during this period,” said Rosaline Qua, COO of SMDC.
OFW’s buying property in the Philippines has become one of the main drivers of the Philippine real estate market recently. According to property consultants from CBRE Philippines, foreigners buying property in the Philippines increased by 61% this 2012.
To capture a growing OFW market, SMDC, the residential property arm of SM is also looking to launch a number of international satellite offices.
The offices will be located in countries where there are large OFW communities ouch as Italy, the UK, the UAE and the US.
“We’re putting out a lot of offices in order to get more of the OFW market,” said Sy.
“We look at where the remittances are coming from and locate our offices there,” explained Jose Gabionza, SMDC vice president of business planning and special projects.
Local Dubai newspaper, Xpress recently reported an increase in sales for SMDC coming from the UAE. According to the article, between January and July this year, SMDC gained over P1 billion in sales from customers in those countries. During that period, SMDC sold 425 units compared to 386 units in 2011 and 421 units in 2010.
It’s only been in the last year that SMDC has turned its focus on the OFW market. In 2010, OFW’s only made up 12 to 13% of their sales. In 2011 this was boosted slightly to 15 to 18%. This year, Rosaline Qua, COO of SMDC said the market share has increased to 35%.
“This shows there really is a desire for the Filipinos to put their money where their heart is,” said Qua.
According to Qua, there are different OFW profiles:
- those that live permanently abroad but visit the Philippines often and look to buy property so they have a place to stay when they visit
- those that buy property with the view of eventually coming home
- those who buy property from the extra money they earn as an investment
“There is also a trend among second generation Filipinos considered who look to come back to buy affordable property,” added Qua.
Most of their OFW market is made up of end-users. “Based on our completed projects, we noticed that a lot of people buy property for their own use. Some are second homes and they have homes in the province. I think if I were to go by percentage more than half of them are end users,” said Qua.
According to Qua, their ideal market demographic would be 50% international and 50% local.
Foreigners buying condo
Their foreigner market on the other hand is still comparably small. “We have some buyers from the Korean market but it isn’t as big. We a few buyers from different countries across Asia and from the Middle East as well,” said Qua.
SMDC is targeting a 10% to 15% growth rate by 2013, as well as a minimum of 3 launches involving the expansions of existing projects.
“There is so much money pouring in a lot of people will benefit form it. We’re right in to the sweet spot to capture the market,” said Sy.
SMDC has just finished the expansion of existing projects and has launched two additional new projects that amount 9,403 units or the equivalent value of P21.9B. These projects include Jazz Tower B, Wind Tower 4, Field Building 4, MPST Tower C, Grace Residences and Breeze Residences.
Excluding the last two projects, SMDC’s has launched 17 total projects as of September 30, equivalent to 48,892 units. - Rappler.com