S&P: Top property developers shifting to high-end projects

Despite lingering challenges in the Philippine real estate sector, the country's four largest property developers are expected to ramp up premium residential projects over the next two years to offset a softening mass market, according to S&P Global Ratings.

- KEISHA TA-ASAN

Property giants Ayala Land Inc., Megaworld Corp., Robinsons Land Corp. and SM Prime Holdings Inc. are doubling down on upscale developments and long-term investments to counter rising inventories, slowing pre-sales as well as elevated debt levels, the debt watcher said.

Together, these companies account for 60 percent of the sector's market capitalization and 75 percent of listed property firms' capital spending.

"The entities are pivoting to more high-end projects where demand has been resilient," S&P Global Ratings said.

"While the firms' leverage is higher than pre-pandemic, their pre-sales are expanding. The investment positioning for growth should prove constructive, in our view," it added.

The shift comes as residential pre-sales remained 17 percent below pre-pandemic levels last year, weighed down by high interest rates and inflation that dampened demand in the mid- to low-income segments.