CLI, one of the largest and most successful developers in Visayas and Mindanao, hopes to replicate its track record for high selling rates in the Philippine capital, where experts warn of a multi-year glut in the mid-market segment.
“With the current situation in the market, there’s a lot of skepticism. But we see opportunity,” Jose Franco B. Soberano, CLI chief operating officer, told reporters as the company unveiled its new office in Makati City.
Pricing and location mismatch
The strategy is simple but requires precision and proper timing to execute.
“It’s about offering the right package [with] a very end-user-focused campaign in an area within Metro Manila that is emerging,” said Soberano, who did not divulge details on their first location since negotiations are ongoing.
His father, CLI chair, president, and CEO Jose R. Soberano III, founded the company over two decades ago and has built more than 40,000 homes.
The company, which listed on the Philippine Stock Exchange on June 2, 2017, takes pride in its impressive selling rate of over 90 percent.
Is he worried about challenging conditions in Manila despite their robust business elsewhere?
“That’s exactly why we want to find out. We have a certain level of confidence, but we want to be very cautious about it,” the elder Soberano said during the briefing.
“Being here in Manila is being able to dig deeper and filling the market [gaps],” he said.
What’s the plan?
So far, the developer revealed plans to establish a mixed-use property in Metro Manila that will have several residential buildings and a commercial component.
This would require a land size of about three hectares. CLI also plans to pursue the deal with a strategic partner.
“We would like to look for a partner who can also put something on the table,” the CLI chief said.
Outside Manila, CLI is looking at purchasing tracts of land of 50 hectares or more to build housing subdivisions in areas such as Batangas or Cavite.
The first phase of these projects would require combined investments of about P12 billion.
End-users vs speculators
CLI has carefully studied the oversupply problem, but this is not stopping them from pursuing their ambition to plant their flag in Metro Manila.
“I would say the oversupply in Metro Manila might be condos that are more on the investor-speculator market, but the end-user condos are probably full and doing well,” said Jose Franco.
End users are families and individuals buying homes to live in, not to resell or rent. These buyers prioritize practical locations and affordability, making them a stable market.
“The good thing with CLI is we are entering with zero supply in Metro Manila, meaning we are in a very strong position because we can go where the demand should be,” he added.
OFW market remains resilient
Another factor boosting their confidence is the constant flow of money from Filipinos working overseas, eager to invest in their future homes.
This is an important market for end-user homes that is expected to remain strong.
Investing in the future
CLI’s management emphasized that timing is crucial, as launching a project—from pre-selling to turnover—could take several years.
“We’re starting our first supply,” Jose Franco said.
“It’s a four-to five-year pre-selling period, so we’re targeting those who believe in the [Philippines’] demographic story,” he added.
Miguel R. Camus has been a reporter covering various domestic business topics since 2009.
