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Mass housing backlog to reach 6.5M in 2030, says developer

A backlog in mass housing will reach 6.5 million units by 2030, wide enough for more property companies to fill in the gap, an official of a low-cost developer said Thursday.

The growing demand for affordable housing Profriends president and CEO Guillermo Choa told reporters in a briefing in Makati City.

"With 2.5 million [in current] backlog, there can never be a bubble because... incremental demand of housing is not even produced by the sector," he said.

Citing a study by Professor Enrique Soriano III of the Ateneo Graduate School of Business, Choa noted the backlog is expected to grow to 6.5 million by 2030 – considering the sector can only supply up 200,000 units a year.

"With the demand size, there's no real competition among us, because it's a huge market. We don't need to compete with each other... the space is too large," Choa said.

Formerly called Amicus Holdings Inc., Profriends is the parent of builder Property Company of Friends Inc., with the bulk of its 1,800-hectare landbank located in Cavite.

Last May, mass housing developer 8990 Holdings Inc. conducted a follow-on offering to finance its landbanking program by another 250 hectares in the National Capital Region, Pampanga, Cebu, Iloilo, Davao, Bulacan and Cavite.

On the other hand, DoubleDragon Properties Corp., jointly owned by Jollibee Foods Corp.'s Tony Tan Caktiong and businessman Edgar Sia II, is also in the mass housing business after buying a Visayas-based developer since it went public in April.

Vista Land & Lifescapes Inc., the listed property firm of former Senator Manuel Villar, has a land bank of 1,933.10 hectares in Mega Manila and residential housing developments in 34 provinces and 74 cities and municipalities across the country.

C, D, E market

These developers, including Profriends, are in the C, D, E market, the most underserved market in the Philippine housing property sector, First Metro Investment Corp. president and CEO Juanchito Dispo said in the same briefing.

"It's a robust growing segment, underserved... Therefore, we believe the company is perfectly positioned to take advantage the opportunities in the segment," he said.

"There are also other businesses going into that particular market segment...We need more developers to address that huge backlog in the bottom of the Philippine C, D, E market," he added.

First Metro is one of the underwriters hired by Profriends for an initial public offering by mid-November, pushed back from the original plan in October. BDO Capital and Investments Corp. is the other underwriter.

The developer plans to raise P7.71 billion by offering 385.750 million primary common shares to the public at an offer price of up to P20 per share.

If priced at the maximum, PRO-Friends CFO Joseph Dolina said P3 billion will be used for development and construction of projects of its subsidiary, P2 billion for investment in financing unit Williamton Holdings Inc., P600 million for general corporate purposes and the balance for landbanking.

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