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By Daxim Lucas Philippine Daily Inquirer THE CONGLOMERATE Ayala Corp. and its real estate arm said they hade entered into a joint venture with India’s Mahindra Group to develop an exclusive residential community in one of the subcontinent’s major cities. In a statement to the stock exchange, Ayala Corp. and Ayala Land Inc. said the deal involved development of a high-end housing enclave in the 1,500-acre Mahindra World City (MWC) in Chennai, India. The joint venture, Mahindra Residential Developers Ltd., will be 51-percent owned by the Mahindra Group and 49 percent by ARCH Capital Asian Partners L.P., a private real estate fund managed by Ayala affiliate ARCH Capital Management Co. Ltd. The project will be on about 55 acres of land in the MWC special economic zone, which is designated for low-density residential community development, Ayala Land said in a statement. The exclusive community of about 750 residential units will be planned and designed by international planners and architects with amenities, development standards and an urban environment not commonly found in India, Ayala Land said. The joint venture through ARCH Capital represents Ayala’s first major foray into the Indian real estate market, Ayala Land chairman Fernando Zobel de Ayala said in the statement. “We continue to see good growth prospects in India and we are delighted to have the opportunity to participate in this momentum through our partnership with the Mahindra Group.” Ayala Corp. and Ayala Land did not disclose the financial terms of the deal. Zobel said the Ayala group’s newly established regional property investment firm, Fidelis Holdings, had been “actively exploring opportunities to expand [its] international activities in this arena.” MWC, a pioneering effort of Mahindra Lifespace Developers Ltd., the publicly listed real estate and infrastructure arm of the Mahindra Group, reflects Mahindra’s vision for a world-class special economic zone catering to investors and manufacturers in automotive accessories, information technology and apparel industries. Ayala Land president Jaime Ayala (no relation to the Zobel de Ayala family) meanwhile said Ayala Land expected to report strong sales in the first quarter despite a market slowdown caused by the US subprime mortgage crisis. He said Ayala Land was refocusing its selling efforts for the US market—a major source of sales last year—from high-end property units to more affordable housing in view of an expected drop in spending power of US-based Filipinos. With editing by INQUIRER.net

By Rosemarie Francisco Reuters MERLY PAZ, a Filipina domestic worker in Hong Kong, has stopped sending money for the construction of her home in southern Iriga City because the peso value of her US dollar-pegged salary has fallen sharply. "My salary is limited so I placed the house on hold," said 31-year-old Paz who has been working in Hong Kong for nearly eight years. "But the longer I'm putting it on hold, the more that prices of construction materials are rising." A real estate boom in the Philippines has been powered by demand from overseas Filipino workers (OFWs) such as Paz who send home salaries to fund purchases and construction of family homes. But many OFWs have had to cut back on property purchases recently as the peso value of their salaries dropped by 19 percent in the past year due to the weak US dollar. A majority of the Philippines' eight million OFWs work in the United States. This drop in demand should have had a chilling effect on the Philippine property sector, where real estate prices surged 18 percent in 2007 and 38 percent in 2006 largely because of demand from OFWs. Indeed, share prices of property firms have plunged over a slowdown in overseas sales and worries of mortgage defaults. But domestic sales are being kept buoyant by a huge housing backlog, low interest rates and friendly payment terms, higher incomes of workers in the growing outsourcing industry, and a rising expatriate population. The slowdown in construction of new housing after the Asian financial crisis of 1997-98 has led to a housing backlog of 3.8 million units in the Philippines, said Alex Pomento, strategist and head of research at Macquarie Securities. About 70 percent of the country's estimated 90 million population do not have their own homes, he said. "It's end-user demand driven. It is not investor driven, that's the difference with the property boom before the Asian crisis," said Victor Asuncion, director at property services firm CB Richard Ellis Philippines. "It is not speculative. There is a specific demand being addressed." Construction is booming across much of the country, especially in Manila, a mostly low-rise city where dozens of residential towers are beginning to dot the skyline. At least 38,000 new apartments will be available by 2013 in the Makati financial district alone and in nearby Bonifacio Global City, property firms say. There is no let-up in demand. In just four days last month, market leader Ayala Land Inc sold about a third of the P3.3-billion value of a new residential tower at Bonifacio Global City. "They say the property market is slowing. But despite the slower US sales for our premier product, we really can't feel it yet because the local market is still strong," said Rex Mendoza, head of residential and corporate sales at ALI. Take-up rates or reservations for all its residential projects are up 39 percent in the first two months of the year, the same pace as the whole of 2007. But the surge in real estate prices seems to be a thing of the past. Pomento said he saw prices rising about 6 percent in 2008 and next year. "The days of aggressive growth appear to be behind us," he said. "We expect price hikes to be capped by the more competitive environment." At least partly because of that, local property firms have sustained heavy falls on the stock market, with ALI down nearly 25 percent and mass housing leader Vista Land and Lifescapes falling 50 percent in the first quarter against a 17.6-percent drop in the main index in the same period. "On a 12-month view, the negatives cannot be disregarded and the market is already trying to price in the concerns ahead of any negative news from property companies," CLSA said in a recent study on the Philippine property market. Real estate firms say the fall is more because of depressed sentiment overall and that while local demand for housing is strong, they haven't given up on the overseas market. In the first two months of this year, ALI says its sales to Filipinos abroad were down to 22 percent of total housing revenues against 35 percent for all of 2007. To offset falling demand from the United States and Hong Kong where the local currency is pegged against the US dollar and where many OFWs work, property firms are now aggressively selling their residential projects to OFWs in the Middle East and Europe. "I think our growth potential will continue so I'm hoping the market will recognize that," said ALI President Jaime Ayala, adding the share price was "very much driven by global sentiment."

By Elizabeth Sanchez-Lacson Inquirer MANILA, Philippines--Property giant Ayala Land Inc. (ALI) on Wednesday unveiled its massive mixed-use development in Canlubang, Laguna, said to be eight times larger than the Makati central business district. Called Nuvali (pronounced as New Valley), the first phase of the 1,600-hectare project will cost P3.5 billion, Miriam Katigbak, head of ALI's strategic landbank management, said after a press launch at the Ayala Museum. Nuvali is so far ALI's largest master-planned regional hub in the country. It is a partnership between the Yulos and ALI. In 1993, ALI bought 70 percent of the 1,600-hectare property of the Yulos in Canlubang, with the latter retaining the 30 percent. In 1993, the property was valued at P275 per square meter, ALI president Jaime Ayala said. The land value now was placed at P2,000 per square meter by independent property consultants. The first phase of the project, which covers 300 hectares, will include a retail center, a multi-functional lake, a business process outsourcing campus, campus apartments, a visitor's center, residences and Xavier School. Officials said Nuvali would devote 50 percent of the development area to open spaces and greenery. Of the total budget for the first phase, P2.5 billion will go to the development of infrastructure and clubhouses for ALI's three major housing brands -- Ayala Land Premiere (high-end), Community Innovations Inc. (for urban achievers) and Avida (affordable segment). As part of residential offerings in Nuvali, Ayala Land Premiere is launching Abrio this Friday, a cluster of 380 exclusive lots on a 70-hectare portion of the Nuvali project. In October, Community Innovations will launch Treveia, a 60-hectare house and lot community, which may cost roughly P9, 000 to P9, 500 a square meter per lot. Lot sizes may measure roughly 300 square meters each. Also next month, Avida will launch Avida Settings in Nuvali, where lots are priced at P1.9 million to P3 million. The lot size is at least 120 square meters.