By Krista Angela M. Montealegre,
THE construction arm of DMCI Holdings, Inc. nearly doubled its newly awarded projects last year, with the higher cost of construction materials prompting an increase in the real estate business’ selling prices even as demand continues to be robust.
In a statement, D.M. Consunji, Inc. said it bagged P16 billion worth of infrastructure, energy, buildings, utilities and plants projects compared to P8.2 billion in 2016.
The contractor closed the year with an order book of P25.4 billion, up by more than a quarter from P20 billion in 2016.
The newly signed projects include the Cavite-Laguna Expressway of MPCALA Holdings, Inc., the petrochemical project of JG Summit Holdings, residential towers Maven of Ortigas & Co. and Anchor Grandsuites of Anchor Land Holdings, Inc., Bued Viaduct and Roadway of Private Infra Development Corp., and the 105-megawatt conventional power plant of Sarangani Energy Corp.
DM Consunji is working on big-ticket projects including Metro Manila Skyway Stage 3 of Citra Central Expressway Corp., Six Senses Resort Phase 2 of Federal Land, Inc., Light Rail Transit Line 2 Masinag Station of the Department of Transportation, City Gate of Ayala Land, Inc., The Imperium and The Royalton of Ortigas & Co., and Radiance Manila Bay of Robinsons Land Corp.
DMCI Holdings, Chairman and President Isidro A. Consunji told reporters last week that the combination of the new tax regime, higher oil prices, rising interest rates and weaker peso point to higher prices of construction materials.
This has forced DMCI Project Developers, Inc., operating under the DMCI Homes brand, to jack up prices of its residential projects despite hedging on steel bars and cement. For its latest project, the real estate firm hiked the price to more than P90,000 per square meter (sq.m.) from an average of P80,000 per sq.m. last year.
Demand, however, continues to be robust, with the new development selling 750 units in a week — the fastest sales velocity among its projects, Mr. Consunji said.
“Our prices remain to be significantly lower compared to our competitors and it (price hike) doesn’t seem to dent the market,” he said.
Likewise, DMCI Homes is seeing a “significant shift” in its buyers, Mr. Consunji said, citing growing demand from mainland Chinese buyers, who now account for more than half of the company’s overseas sales in the first quarter of 2018. Take-up from overseas markets contribute half to reservation sales.
“Kung hindi namin pipigilin baka umabot ng 90% (If we don’t control this, it may reach up to 90%). No kidding,” he said.
“Our worry is if we have too many absentee residence you might have what you see in Shanghai and Beijing wherein you have totally sold buildings but no one is living there. It’s out of our objective to sell to the end users — preferably the local end user,” Mr. Consunji said.