After showing fantastic financial performance in 2023, listed property firms are poised to sustain their strong earnings this year as interest rates are expected to go down in the second half, according to stock market analysts.
COL Financial property analyst Richard Laneda said listed firms would likely register even higher earnings this year from an already solid 2023 financial reports because of higher sales bookings as more projects are being completed.
Laneda said while the office leasing may still see some pressure, big developers like Ayala Land Inc., Robinsons Land Corp., SM Prime Holdings and Megaworld Corp. would likely post higher-than-market occupancy rates.
He said as the mall leasing business of property firms already managed to recover to pre-pandemic levels, it would still do better this year when lower inflation is expected to lead to higher disposable income.
The outstanding growth in hotel revenues in 2023 may not happen again this year, according to Laneda. The may continue to grow, but at a slower pace from last year in the absence of the so-called “low base effect”.
First Metro Investments Corp. head of research Christina Ulang said the outlook for 2024 earnings of property firms is robust as interest rates will would trend lower in the second half of the year.
Ulang said this would improve the affordability of development and mortgage finance for residential projects.
The positive outlook is also supported by the completion and continued implementation of important infrastructure projects across the country.
She said the rehabilitation of the county’s main gateway—the Ninoy Aquino International Airport (NAIA) would be a positive contributor to the growth of domestic and international travel, thereby boosting opportunities in hotel, resorts, and trade and investments.
Profits of big property firms ALI, SM Prime, RLC and Megaworld grew by double digits in 2023, boosted by stronger revenues from residential, malls, office and hotel businesses.
Bullish about the prospects for 2024, these companies budgeted higher capital spending to sustain their growth momentum.