Damosa Land hopeful of market recovery by 2021

By Denise A. Valdez, Reporter

DAMOSA Land, Inc. is committed to making Mindanao a competitive alternative to Metro Manila through projects across residential, office and industrial segments.

The property developer said it remains optimistic the Davao market will rebound strongly by 2021, despite the coronavirus disease 2019 (COVID-19) pandemic.

“We feel that for 2020, just like with any other market, there’s probably going to be some softening in the real estate sector. But we like to focus on the opportunities and the silver lining… 2021 I think is going to be a very strong rebound,” Damosa Land First Vice-President and Chief Development Officer Ricardo F. Lagdameo told BusinessWorld in a video call last week.

Citing real estate experts, he said there is an expected resurgence in the business process outsourcing sector after the pandemic, and cities outside Metro Manila, particularly Davao, are expected to benefit from it.

The company remains bullish, with plans to invest in new projects. Mr. Lagdameo said the growth in the office segment would result in higher demand for residential spaces as well.

Damosa Land is currently constructing an office building with about 20,000 square meters of leasable space. This is set to open in either August or September and will expand the company’s leasing portfolio to 80,000 square meters by yearend.

It is also building two residential projects that may be finished either in the fourth quarter of 2020 or the first quarter of 2021. The residential segment, Mr. Lagdameo said, is the primary driver of the company’s revenues to date.

“One segment that we continue to be bullish about, and our sales over the last couple of months will validate that, is residential. I think it is going to be good, it’s going to be resilient, not just for Davao but for the rest of the Philippines,” he said.

Damosa Land is also keen on developing industrial parks — its third largest revenue contributor after residential and office leasing. “The industrial sector is actually one of the segments that not a lot of real estate developers are in. It’s something that we see us having an advantage in, to be one of the few players that are in that space,” Mr. Lagdameo said.

The government has been pushing for countryside development with initiatives such as Administrative Order No. 18, or the moratorium on new economic zones in Metro Manila. Mr. Lagdameo said Damosa Land is preparing Mindanao to take some of these locators by putting up sites where companies may invest in.

“When companies are ready to invest, we want them to see that we have an office that they can put their offices in. We have an industrial park that they can put their factories in. That’s kind of how we want to position ourselves,” he said.

As the company expands with projects across the residential, commercial, tourism, industrial and mixed-use segments, Mr. Lagdameo said Damosa Land is exploring ways to generate capital through a public offer.

“The concept of a REIT (real estate investment trust) or an IPO (initial public offering) is something that we’re already studying at this point,” he said.

He noted, however, that these plans may not come any time soon as Damosa Land’s focus is on beefing up its portfolio. “I wouldn’t say it will happen probably in the next three years, but beyond that, personally I would like to see a public offering,” Mr. Lagdameo said.

Damosa Land currently has a landbank of close to 150 hectares located in the Davao region, comprising both raw land and land that is being developed. Its plan is to keep launching projects in the region that would make it a competitive choice against Metro Manila.

“I think Davao really has a great opportunity now to compete across the country… I think you can invest in Mindanao, you can invest in Davao at considerably less investment cost than investing in Metro Manila or even Cebu,” Mr. Lagdameo said.

“Until we’ve exhausted all opportunities in Mindanao, that’s the only time that we’ll look at others. And I think there’s still a lot of opportunities on the island,” he added.