Sunday, January 23, 2011

APG Buys Stake in Philippines Real Estate

N.J.C. Morales of BusinessWorld Online reports, Dutch pension fund manager invests in Century Properties:
High-end real estate developer Century Properties, Inc. has secured more than P2 billion in funding from a European asset manager to finance projects in the “premium” market segment.

The investment from APG will be used for expansion, Century Properties said, pointing to a favorable business environment.

“APG, one of the largest global pension asset managers based in the Netherlands, with €266 billion of assets under management, has invested P2.25 billion in Century Properties,” the property firm said in a statement yesterday.

“The investment of APG will allow Century Properties to capitalize on the current high-growth and low-inflation environment of the Philippines,” Jose E. B. Antonio, chairman and chief executive of Century Properties, said in the same statement.

Mr. Antonio said the cash infusion would “further expand [the company’s] business plan of catering to the premium segment of multiple markets.”

Patrick Kanters, managing director for global real estate of APG, said: “As a long-term strategic investor, APG has identified the real estate market in the Philippines as highly attractive.”

The Philippine real estate sector is enjoying brisk demand amid low interest rates that allow affordable financing.

The Philippines has a housing backlog of 2.5 million-3.5 million, government data show.

However, the entire property development industry produces only about 250,000 units per year, less than half the demand of 600,000 annually.

“We are confident that through our investment we contribute to the Century Properties team realizing [its] growth strategy,” Mr. Kanters said.

APG provides asset management services to pension funds. It manages more than 30% of all collective pensions in the Netherlands, making it one of the world’s largest pension asset managers, the company said on its Web site.

Early this month, privately held Century Properties broke ground for its $100-million, 28-storey Centuria Medical Makati -- an outpatient building that will have 500 clinics and targeting the medical tourism market.

The unlisted Century Properties is a 25-year-old real estate developer focused on the high-end residential condominium market.

As of end-September last year, Century Properties has completed 22 towers and manages 43 buildings totaling 1.9 million square meters.

Projects in its portfolio include the Essensa East Forbes and South of Market in Fort Bonifacio, and The Casitas and The Moderno at San Lazaro Leisure Park in Carmona, Cavite.
I bring this story to your attention because it shows where long-term growth lies, namely in Asia. It's not just the Philippines. One of my colleagues raved about a recent trip he enjoyed with his family in Vietnam. I asked him if it's booming and he told me ''absolutely incredible boom going on there''. APG is one of the largest global pension asset managers in the world. Investors should be paying more attention to where they're investing as it can provide them with clues on where opportunities lie.

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