May 23, 2018, 8:47 pm
Facebook iconTwitter iconYouTube iconGoogle+ icon
1 Philippine Peso = 0.07022 UAE Dirham
1 Philippine Peso = 2.04971 Albanian Lek
1 Philippine Peso = 0.03427 Neth Antilles Guilder
1 Philippine Peso = 0.46553 Argentine Peso
1 Philippine Peso = 0.02521 Australian Dollar
1 Philippine Peso = 0.03403 Aruba Florin
1 Philippine Peso = 0.03824 Barbados Dollar
1 Philippine Peso = 1.6174 Bangladesh Taka
1 Philippine Peso = 0.0318 Bulgarian Lev
1 Philippine Peso = 0.00722 Bahraini Dinar
1 Philippine Peso = 33.47954 Burundi Franc
1 Philippine Peso = 0.01912 Bermuda Dollar
1 Philippine Peso = 0.02536 Brunei Dollar
1 Philippine Peso = 0.13117 Bolivian Boliviano
1 Philippine Peso = 0.07028 Brazilian Real
1 Philippine Peso = 0.01912 Bahamian Dollar
1 Philippine Peso = 1.30067 Bhutan Ngultrum
1 Philippine Peso = 0.19226 Botswana Pula
1 Philippine Peso = 382.79159 Belarus Ruble
1 Philippine Peso = 0.0382 Belize Dollar
1 Philippine Peso = 0.02445 Canadian Dollar
1 Philippine Peso = 0.01907 Swiss Franc
1 Philippine Peso = 12.17151 Chilean Peso
1 Philippine Peso = 0.12202 Chinese Yuan
1 Philippine Peso = 54.9522 Colombian Peso
1 Philippine Peso = 10.70612 Costa Rica Colon
1 Philippine Peso = 0.01912 Cuban Peso
1 Philippine Peso = 1.78834 Cape Verde Escudo
1 Philippine Peso = 0.41644 Czech Koruna
1 Philippine Peso = 3.3891 Djibouti Franc
1 Philippine Peso = 0.12076 Danish Krone
1 Philippine Peso = 0.94646 Dominican Peso
1 Philippine Peso = 2.21398 Algerian Dinar
1 Philippine Peso = 0.25367 Estonian Kroon
1 Philippine Peso = 0.34149 Egyptian Pound
1 Philippine Peso = 0.52008 Ethiopian Birr
1 Philippine Peso = 0.01621 Euro
1 Philippine Peso = 0.03927 Fiji Dollar
1 Philippine Peso = 0.01423 Falkland Islands Pound
1 Philippine Peso = 0.01423 British Pound
1 Philippine Peso = 0.08859 Ghanaian Cedi
1 Philippine Peso = 0.89503 Gambian Dalasi
1 Philippine Peso = 172.06501 Guinea Franc
1 Philippine Peso = 0.14027 Guatemala Quetzal
1 Philippine Peso = 3.93289 Guyana Dollar
1 Philippine Peso = 0.15004 Hong Kong Dollar
1 Philippine Peso = 0.45428 Honduras Lempira
1 Philippine Peso = 0.11999 Croatian Kuna
1 Philippine Peso = 1.19751 Haiti Gourde
1 Philippine Peso = 5.1499 Hungarian Forint
1 Philippine Peso = 271.08987 Indonesian Rupiah
1 Philippine Peso = 0.06827 Israeli Shekel
1 Philippine Peso = 1.30228 Indian Rupee
1 Philippine Peso = 22.63862 Iraqi Dinar
1 Philippine Peso = 804.0153 Iran Rial
1 Philippine Peso = 1.99809 Iceland Krona
1 Philippine Peso = 2.38145 Jamaican Dollar
1 Philippine Peso = 0.0135 Jordanian Dinar
1 Philippine Peso = 2.12293 Japanese Yen
1 Philippine Peso = 1.91587 Kenyan Shilling
1 Philippine Peso = 1.30863 Kyrgyzstan Som
1 Philippine Peso = 77.2065 Cambodia Riel
1 Philippine Peso = 7.91109 Comoros Franc
1 Philippine Peso = 17.20841 North Korean Won
1 Philippine Peso = 20.57725 Korean Won
1 Philippine Peso = 0.00577 Kuwaiti Dinar
1 Philippine Peso = 0.01568 Cayman Islands Dollar
1 Philippine Peso = 6.29369 Kazakhstan Tenge
1 Philippine Peso = 159.08222 Lao Kip
1 Philippine Peso = 28.77629 Lebanese Pound
1 Philippine Peso = 3.0153 Sri Lanka Rupee
1 Philippine Peso = 2.55793 Liberian Dollar
1 Philippine Peso = 0.24207 Lesotho Loti
1 Philippine Peso = 0.05829 Lithuanian Lita
1 Philippine Peso = 0.01187 Latvian Lat
1 Philippine Peso = 0.02595 Libyan Dinar
1 Philippine Peso = 0.18017 Moroccan Dirham
1 Philippine Peso = 0.31807 Moldovan Leu
1 Philippine Peso = 0.99293 Macedonian Denar
1 Philippine Peso = 25.85086 Myanmar Kyat
1 Philippine Peso = 45.83174 Mongolian Tugrik
1 Philippine Peso = 0.15455 Macau Pataca
1 Philippine Peso = 6.76864 Mauritania Ougulya
1 Philippine Peso = 0.65679 Mauritius Rupee
1 Philippine Peso = 0.29771 Maldives Rufiyaa
1 Philippine Peso = 13.64149 Malawi Kwacha
1 Philippine Peso = 0.37878 Mexican Peso
1 Philippine Peso = 0.07606 Malaysian Ringgit
1 Philippine Peso = 0.24208 Namibian Dollar
1 Philippine Peso = 6.88337 Nigerian Naira
1 Philippine Peso = 0.59598 Nicaragua Cordoba
1 Philippine Peso = 0.15388 Norwegian Krone
1 Philippine Peso = 2.08185 Nepalese Rupee
1 Philippine Peso = 0.02752 New Zealand Dollar
1 Philippine Peso = 0.00735 Omani Rial
1 Philippine Peso = 0.01912 Panama Balboa
1 Philippine Peso = 0.0627 Peruvian Nuevo Sol
1 Philippine Peso = 0.06117 Papua New Guinea Kina
1 Philippine Peso = 1 Philippine Peso
1 Philippine Peso = 2.20841 Pakistani Rupee
1 Philippine Peso = 0.06955 Polish Zloty
1 Philippine Peso = 107.60994 Paraguayan Guarani
1 Philippine Peso = 0.06959 Qatar Rial
1 Philippine Peso = 0.07495 Romanian New Leu
1 Philippine Peso = 1.17737 Russian Rouble
1 Philippine Peso = 16.18375 Rwanda Franc
1 Philippine Peso = 0.0717 Saudi Arabian Riyal
1 Philippine Peso = 0.15039 Solomon Islands Dollar
1 Philippine Peso = 0.26023 Seychelles Rupee
1 Philippine Peso = 0.34331 Sudanese Pound
1 Philippine Peso = 0.16581 Swedish Krona
1 Philippine Peso = 0.02562 Singapore Dollar
1 Philippine Peso = 0.01424 St Helena Pound
1 Philippine Peso = 0.42459 Slovak Koruna
1 Philippine Peso = 149.13958 Sierra Leone Leone
1 Philippine Peso = 10.7457 Somali Shilling
1 Philippine Peso = 397.36138 Sao Tome Dobra
1 Philippine Peso = 0.1673 El Salvador Colon
1 Philippine Peso = 9.84665 Syrian Pound
1 Philippine Peso = 0.24215 Swaziland Lilageni
1 Philippine Peso = 0.61434 Thai Baht
1 Philippine Peso = 0.04906 Tunisian Dinar
1 Philippine Peso = 0.04426 Tongan paʻanga
1 Philippine Peso = 0.08746 Turkish Lira
1 Philippine Peso = 0.12714 Trinidad Tobago Dollar
1 Philippine Peso = 0.57119 Taiwan Dollar
1 Philippine Peso = 43.51816 Tanzanian Shilling
1 Philippine Peso = 0.49847 Ukraine Hryvnia
1 Philippine Peso = 71.12811 Ugandan Shilling
1 Philippine Peso = 0.01912 United States Dollar
1 Philippine Peso = 0.59981 Uruguayan New Peso
1 Philippine Peso = 152.58126 Uzbekistan Sum
1 Philippine Peso = 1501.96941 Venezuelan Bolivar
1 Philippine Peso = 435.35373 Vietnam Dong
1 Philippine Peso = 2.08088 Vanuatu Vatu
1 Philippine Peso = 0.0494 Samoa Tala
1 Philippine Peso = 10.62849 CFA Franc (BEAC)
1 Philippine Peso = 0.05163 East Caribbean Dollar
1 Philippine Peso = 10.62849 CFA Franc (BCEAO)
1 Philippine Peso = 1.92218 Pacific Franc
1 Philippine Peso = 4.7782 Yemen Riyal
1 Philippine Peso = 0.24216 South African Rand
1 Philippine Peso = 99.22562 Zambian Kwacha
1 Philippine Peso = 6.91969 Zimbabwe dollar

Chinese real estate firms boost apartment rentals

HONG KONG. -- Major Chinese real estate companies are renting more of the apartments they develop as they respond to President Xi Jinping’s demand that China should produce homes to live in not to speculate on.

But currying favor with authorities who want to provide affordable housing to maintain stability in the property sector comes at a cost as the developers will make little, if any, initial return from renting.

The net yields on rental properties for the biggest developers are only 5-6 percent, and for smaller firms with higher costs they may even be negative, according to the developers and real estate analysts.

By contrast, the profit margins on properties that are sold have usually been clear for all to see - averaging in the 20-30 percent range in recent years.

It isn’t just Xi and the central government that has been piling the pressure on the real estate developers.

Many cities started imposing restrictions on land sales last year, forcing developers to build some homes to rent rather than sell, making the properties much less lucrative and higher risk for companies. Not only are the companies looking at lower returns on the developments but they also have the balance sheet risks of continuing to own them.

This is all, in turn, set to speed up market consolidation and joint bidding as companies share the costs. 

Vanke, the country’s No.2 developer by sales and one of the early comers to the rental market, plans to double the number of apartments it is renting out to 200,000 in 2018.

Rental apartments “are not supposed to make a lot of money in the first place,” China Vanke Chairman Yu Liang said at an earnings conference late last month, adding that there has to be a balance between rental and sale markets.

He said that the rental market could be profitable in the longer term if the authorities put sufficient supportive policies in place. Local governments have recently been offering preferential lending rates and new fund-raising channels such as corporate bonds and securitization to help the rental business.

Clearly, though, the demand is there. L+Research Institute, the research unit of real estate agent Lianjia, estimated the number of tenants will reach 230 million in 2025, up from 160 million in 2015. It sees the total rental value of the Chinese market rising to 2.9 trillion yuan ($460 billion) in 2025 from 1 trillion yuan in 2015.

Lianjia also said the number of rental apartments in China grew 40 percent in 2017, compared to growth of less than 15 pct in 2015.

China’s largest developer by sales, Country Garden Holdings, which set up a rental business unit late last year and laid out an aggressive plan to own 1 million rental apartments in three years, told reporters that the business is “tough” for companies just getting started in the rental sector.

Profitability from rental property is lower than from sales, the company’s Chief Financial Officer Bijun Wu said at a media lunch in February. “But under government support, it will become a common business for the industry.”

Not only does it take longer to collect cash from rental housing, targeting young professionals with limited incomes means landlords can’t always charge the higher rents they would like, the developers and analysts say.

Developers, such as Vanke, are mostly leasing or buying under-utilized assets such as hotels, offices and warehouses and redeveloping them into rental units as that way the returns are much higher than they would get if they bought land and built new developments. 

Vanke told Reuters last year that the gross profit margin on the redevelopment work was in the 20-30 percent range, which is in line with its gross profit margin of 26.2 percent for its property development business in 2017.

For rental apartments built from scratch, the average cost for Vanke is 300,000 yuan ($47,708.41) per unit, according to analysts, so with average rental income of 3,000 yuan a month it would take 8.3 years to pay back excluding any interest cost.

The net yield for Vanke on the rental apartments is around 5 to 6 percent, but for developers with smaller scale it would be lower.

“Initial yield for the business is around 4 percent, but in some bad cases it could just be breakeven” said CLSA analyst Nicole Wong. “If it reaches a big scale, developers can strike a good income, and also profit from a spin-off later on ... the leveraged return can then reach 8 to 9 percent.”

The developers, though, are working on ways to pull in more investors.

Country Garden obtained regulatory approval last month to launch 10 billion yuan ($1.6 billion) worth of quasi-Real Estate Investment Trusts (REITs), China’s largest such issue so far, for its rental housing projects.

Vanke said on Monday it plans to raise up to 8 billion yuan from the sale of rental housing bonds, while Beijing-based developer Longfor Properties last month sold 3 billion yuan of such bonds, the first issue of its kind in China. 

While not all developers’ plans are as aggressive as these behemoths, they are still showing the kind of commitments needed to keep the authorities on side, property analysts say.

“Some developers are doing it to show support for government policy; their project volume is not large in each city, but that small cashflow shortfall will help to get a good relationship with the city governments in the long run,” RHB Research analyst Toni Ho said.

Last month, state-owned China Overseas Land & Investment Ltd said it will launch 3,000 to 5,000 rental units a year while Sino-Ocean Group said it is targeting 100,000 rental units in 2020, up from 1,000 now.

“It’s only a start for us and not our major business yet, but we’ll actively make efforts,” Sino-Ocean chairman Li Ming said. – Reuters 
Category: 
Rating: 
No votes yet

Column of the Day

How polluted is that estero near you?

Dahli Aspillera's picture
By DAHLI ASPILLERA | May 23,2018
‘Think recycled water. Modern cities have been using water for non-potable needs, recycled from rivers and rain catchments. In London, such water is referred to as Grey Water.’

Opinion of the Day

Is Duterte China’s accomplice in SCS military plans?

Ellen Tordesillas's picture
By ELLEN TORDESILLAS | May 23, 2018
‘But what is more disturbing is what Duterte revealed he knew about China’s nuclear weapons in Philippine territory all along.’