Philippines seeing development in new property segment

Eton Properties is constructing a number of residential developments in the capital city, all of which are primarily targeted at the country’s first time home owners, a target market that is reflected in the name of their subsidiary handling the construction and sale of one new development, First Homes Inc.

First Homes’ maiden development is Aurora Heights Residences. The twin tower residential construction with a total of 1,254 apartments is located near the Santolan light railway transit station. Aurora Heights provides what the company calls “compact affordable” units, which enables a lower sales price.

For instance, the listed cost of a three bedroom unit in Aurora Heights is P2.2 million, while a two bedroom is P1.5 million. Although still costly, the price is below the government-mandated P2.5 million level after which VAT must be charged. Because the apartments are all less than P2.5 million, buyers save as much as P300,000 and this sales advantage has been fully utilized by Eton across their other developments in Manila.

First Homes’ Aurora Heights development will be completed in 2013 and the company has reported robust sales throughout the last year or so of promotion. There are plans in the works for a similar development in Makati, which would benefit from the burgeoning university belt in Buendia, while a third residential development is being considered for Taft Avenue in Manila proper, rather than the wider Metro Manila area.

The strategy of First Homes is mirrored by Eton Properties in many of their new developments, tapping into a segment of the market that has been long overlooked by major realty businesses. Eton Properties is currently constructing Eton Tower Makati, Eton City, North Belton Communities, 68 Roces and 8 Adriatico, all of which cater to the needs of young professional Filipinos by offering, like First Homes, compact residential units that, due to their size and price, make it easier to get onto the property ladder.

In the 8 Adriatico development, for instance, a studio apartment is just 25 square meters, about the same size as the average hotel room. However, because these space limitations, each unit from the studio right up to the two bedroom, comes fully-furnished with tasteful and modern interior design considerations while the price, starting at P2.1 million for the studio and topping out at P7.6 million for the two bedroom, remains competitive.

While Eton Properties’ First Homes subsidiary caters exclusively to first time property buyers, Eton Properties seems to be broadening their reach with developments such as 8 Adriatico, targeting young families as well as first time buyers. It was recently revealed to the Philippines news media that Eton Properties were expanding their market further by offering what they call SOHO units in the 8 Adriatico development.

SOHO, meaning ‘Small Office, Home Office’ is a type of residential unit that, according to Eton Properties, offers the comfort and security of one’s home, while providing a space in which to have ones office at the same time. All of the units from the studio to the two bedroom would be SOHO capable, according to press material released by Eton Properties, and small to medium enterprises that operated out of 8 Adriatico would be supported by a business center on the ground floor of the 40-story tower.

A total of four towers will be built across 8,000 square meters of ground in the 8 Adriatico development, which is located next door to the mall Robinsons Manila.

These developments in Manila are just one component of the massive expansion plans currently being undertaken by the three-year-old Eton Properties, which has already launched 30 projects across the country.

According to Philippines news media reports in the business sector, the company is experiencing unprecedented growth with profits up by a factor of ten between 2009 and 2010, topping out at P380 million for the first half of 2010. The company is part of the much larger Lucio Tan Group of Companies, one of the largest business groups in the country.