SCUTTLEBUTT

DMW on track via LRT opening

The economic multiplier effect of rail systems will influence the financial future of most property firms.

DM Wenceslao & Associates Inc. (DMW) is expected to reap gains from the operations of the LRT 1 Cavite Extension Phase 1.

While there was an observed decline in condo sales and construction contracts, this may be partially offset by further pipeline developments, continued leasing strategies, and additional passenger volume and higher foot traffic brought about by the opening of the rail extension, according to the brokerage house Regina Capital Development Corp.

DMW’s third-quarter net income grew by 33 percent from a year ago to P464.7 million, bringing its nine-month profit to P1.4 billion. The growth was attributed to strengthened leasing operations, additional demand from logistics and traditional occupiers, and higher occupancy and tenant sales of retail and F&B segments in Parqal.

Total consolidated revenues rose by 16.65 percent in the third quarter to P897.7 million due to higher rental revenues, yet the firm’s nine-month revenues declined by 3.4 percent to P2.72 billion, due to a significant decline in condominium unit sales, amounting to P274 million, slower completion rates of Midpark, alongside lower number of units qualified for revenue recognition.

Total construction deals declined in the third quarter to P1.1 million, due to lower construction activities rendered. Construction progress could also be weighed upon by the proposed 10 percent to 20 percent tariff implementation of the incoming US administration, as costs of raw materials and construction equipment could increase.

Among projects DMW has lined up include properties in commercial leasing, residential, and healthcare. For 2025, the projects include Aseana Plaza Phase 1 and Workpads which are set to begin construction, while One Parq Suites is set for launch. Meanwhile, Aseana Plaza Phase 2 and St. Luke’s Medical Arts Building have no tentative launch dates as yet.

Market bets on rate slash

Odds favor the Bangko Sentral ng Pilipinas (BSP) cutting policy rates by another 25 basis points (bps) in the next Monetary Board meeting on 19 December.

Lower government debt rates means more cash in circulation, thus an increase in economic activity while banks are more inclined to lend to the public.

The US Federal Reserve has slashed rates by a total of 75 bps vs. the 50 bps cut so far by the BSP. Moreover, recent indicators support another rate cut before the end of the year.

AP Securities said factors support the view that the Fed is still likely to cut one more time in the next Federal Open Market Committee meeting on 18 December as currently suggested by the Fed Funds Futures; that slower third-quarter gross domestic product growth means the economy could use more support from lower rates; and the seasonally strong overseas Filipino workers remittance inflows plus high gross international reserves level should provide support to the peso.

No less than BSP Governor Eli Remolona Jr. acknowledged that inflation would remain within the central bank’s two to four-percent target, which would warrant a continued easing.