Six out of the top ten real estate developers in the country posted double digit revenue and net income growth in the first three months of 2019. According to the recent press releases and Philippine Stock Exchange (PSE) disclosures of these companies, there was no single segment which was solely responsible for the rapid growth. Rather, it was the strong performance exhibited by all of the market segments — the residential housing, lifestyle, office building, and hotel segments — along with the robust Philippine macroeconomic environment (SEE: GDP seen doubling by 2026 as Philippines “set for dynamic growth”, The Philippine Star), which ultimately propelled the rapid growth of these prominent real estate developers.

The positive 2019 first quarter results are all in line with and actually confirm the initial 2019 industry estimates and forecasts made by the Leechiu Property Consultants (LPC). According to the group, the entire Philippine real estate industry is set to grow at a rapid rate of at least ten percent in the coming year (SEE: Double digit growth in real estate seen in 2019, Philippine News Agency). In short, the real estate industry, taken as a whole, is growing and will continue to grow in the near future. These companies are simply riding on the wave:

Ayala Land Inc. (ALI): 12% Net Income Growth
In the first three months of 2019, Ayala Land Inc. (ALI), led by its president and CEO Bernard Vincent Dy, reported P7.3 billion in net income — a 12% jump compared to the P6.5 billion in the first three months of the past year (SEE: Ayala Land income grows 12% to P7.3 billion, The Philippine Star). The company attributed this recent growth to the opening of five new shopping centers (Ayala Malls Feliz, Circuit Makati, Capitol Central, Vertis North, and Cloverleaf), in their commercial leasing business which grew by 19%, and six new office buildings (Ayala North Exchange Towers, Corporate Center Towers, Vertis North Corporate Center Towers), in their office leasing business which grew by 27%. Moving forward, ALI’s management expects growth to remain strong as it plans to launch two new mixed use estates, along with other developments outside of the Metro.

Filinvest Land Inc. (FLI): 24% Net Income Growth
According to Filinvest Land’s most recent earnings call, the company earned P1.84 billion in the first quarter of 2019. This figure represents a 24% jump from the P1.5B reported in the same time period last year (SEE: Filinvest Land income rises 24%, Business World). The growth was mainly driven by FLI’s office rental business which grew by a staggering 42% as a result of the six new office buildings being completed in the recent months. These new developments have added 118,000 square meters to the developers gross leasable area (GLA). Moving forward, management hopes to more than triple the Filinvest’s GLA within the next four years — from the 510,000 square meters as of March 2019 to around 1.6 million square meters in 2023 (SEE: Filinvest Land: Profit grows to P1.84 B, PropertyAccess).

Megaworld Corp. (MEG): 16% Net Income Growth
Megaworld Corp. grew its revenues and net income by 15% (from P13 billion to P14.9 billion) and 16% (from P3.3 billion to P3.9 billion) respectively in the first quarter of 2019 (SEE: Megaworld earnings up 16% to P3.8 billion in Q1, The Philippine Star). The group’s chief strategy officer Kevin Tan attributes the company’s growth to its strong core residential and commercial business, which make up 90% of the group’s revenues. Moving forward, Megaworld is looking to bank on its rapidly growing hotel business, which grew by 56% in 1Q 2019, by opening three new hotels — Belmont Hotel Boracay, Hotel Lucky Chinatown, and Savoy Hotel Mactan Newtown — in the coming year.

Robinsons Land Corp. (RLC): 19% Net Income Growth
The Gokongwei-led Robinsons Land Corporation reported P6.8 billion in revenue and P1.8 billion in net earnings for the first three months of 2019. These figures represent a 6% and 19% jump compared to the company’s 1Q 2018 performance (SEE: RLC nets P1.84 billion in Q1, 19% higher, The Philippine Star). RLC president and CEO Frederick Go attributes the company’s strong performance to their rapidly growing office building segment, along with the stable growth in their mall and hotel divisions. The company expects to maintain this growth, with new office buildings soon to be completed.

SM Prime Holdings (SMPH): 16% Net Income Growth
Based on a recent Philippine Stock Exchange (PSE) disclosure, SM Prime Holdings grew its net earnings by 16% — from P7.6 billion in 1Q 2018 to P8.8 billion in 1Q 2019 (SEE: SM Prime net profit grows 16% to P8.8 billion in Q1, The Manila Bulletin). The company’s president, Jeffrey C. Lim, attributes the company’s recent success to the robust Philippine economy and rising levels of disposable income. In order to better capture this growth, SMPH plans to aggressively develop various estates outside of the National Capital Region.

Vista Land & Lifescapes Inc. (VLL): 12% Net Income Growth
Vista Land of former senator Manny Villar reported a net income of P2.9 billion in the first quarter of 2019 — a 12% jump from the P2.6 billion in 1Q 2018 (SEE: Vista Land nets P2.9 billion in Q1, up 12%, GMA News). This growth mostly came from the company’s strong residential business. Mr. Villar forecasts that the demand for housing units in the coming months will increase, in light of the recent policy rate cuts of the Bangko Sentral ng Pilipinas (SEE: BSP cuts key rates; More to come in the near future, PropertyAccess). In anticipation of this increased demand, VLL has allotted P50 billion in capital expenditures for the coming year.

More Growth to Come
Examining the performance and prospects of an industry leader is often a good way to gauge the outlook of the entire industry. Thus — simply based on the rapid growth experienced by the top six property developers in the country, it is extremely clear that the Philippine real estate market is poised for growth.