Rate cuts may spur demand for property loans

By Beatriz Marie D. Cruz, Reporter

THE Monetary Board’s continued easing cycle would probably increase demand for real estate loans, according to construction and property developer JCV & Associates (JCVA).

“If there’s going to be another rate cut… that will spur more loans,” JCVA President and Chief Executive Officer Jason C. Valderrama told ����ý on Thursday. “The demand for loans will be higher.”

Banks and trust entities’ exposure to the property sector eased to 20.17% at the end of December 2023 from 20.55% three months earlier, according to central bank data.

Investments and loans extended by Philippine banks to the property sector rose 4.3% to P3.15 trillion at end-2023.

����finitely, there will be more developments,” Mr. Valderrama said.

Last week, Bangko Sentral ng Pilipinas (BSP) Governor Eli M. Remolona, Jr. said the Monetary Board would continue to cut interest rates in 25-basis-point (bp) increments, though it might keep rates steady at its December meeting.

The BSP has lowered interest rates by 50 bps since it began its easing cycle in August, bringing the policy rate to 6%.

For 2025, JCVA expects growth in revenues and headcount, with over 60% of its projects coming from old clients.

“We’re projecting to grow 50-60% next year, we’re very bullish and optimistic,” Mr. Valderrama separately told a news briefing.

“We have a very robust pipeline of projects. I think we’ve secured half of our revenue target already for next year and that’s because 67% of our [projects] are from our repeat clients,” he added.

For next year, key growth drivers include logistics, healthcare and tourism, Mr. Valderrama said.

The firm has partnered with a major e-commerce player to build an 11-hectare sorting center in Cavite, he added. The sorting center, which will break ground next year, has a construction timeline of two to three years.

Mr. Valderrama also cited the robust growth potential in data centers, noting that JCVA is working on an eight-megawatt (MW) hyperscale data center in Quezon City.

“In terms of capacity, we’re at 500 MW and that’s going to be around 950 MW by 2028,” he said.

JCVA also has expansion projects with major hospitals and banks, Mr. Valderrama added.

It has also been integrating digital solutions to fast-track its construction process. The firm uses Building Information Modeling to create digital project models, which help teams identify potential issues before starting construction.

It also uses an artificial intelligence-powered platform that provides a 360-degree, real-time documentation of construction sites. The firm also uses drones to monitor larger projects.

Clients can monitor project progress without visiting the site through JCVA’s cloud-based platform Agile + Vault, which provides real-time updates on schedules, budgets and construction progress, as well as daily site photos and walkthrough videos.

More construction developers are also expected to be more compliant with “green” certifications, Mr. Valderrama said, particularly the WELL Building Standard, EDGE (Excellence in Design for Greater Efficiencies), LEED (Leadership in Energy and Environmental Design) and BERDE (Building for Ecologically Responsive Design Excellence).

“We’ve started progressively pursuing these certifications after the pandemic. It’s become more of a requirement for clients now,” he added.