Demand rises for homes outside Metro Manila – Alliance Global

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Metro Manila (CNN Philippines, September 4) — Demand for homes has shifted to provinces in the past few months, Alliance Global Group CEO Kevin Tan said, prompting developers to refocus strategies amid the pandemic.

Tan, who is next in line in running the property firm-turned-conglomerate, said most businesses have had to reorient policies and priorities to keep up with the "unexpected and unique" global crisis which changed how consumers behave.

"During this pandemic, we realized that there is actually growing demand for our residential products outside Metro Manila. Obviously, Metro Manila has now become the sort of hot spot for COVID so we've seen a drastic decline in demand here," the young executive told CNN Philippines' Rico Hizon.

"We've seen that a lot of demand shifted outside of Metro Manila, people now want to build homes there so we took advantage of that," he added.

Local liquor bans also threatened sales of Emperador, so the company shifted gear and focused on selling brandy and other liquor abroad.

The Philippines has been battling the coronavirus outbreak for half a year now, with companies in a race to who can adapt the fastest. For Alliance Global, the first step was to reorganize internally to boost safety and security, which has then extended to policies for townships and communities. Megaworld Lifestyle Malls, condominium buildings, hotels, and restaurants have all had to ramp up health protocols, while all other brands had to focus on cost-cutting and loan refinancing to preserve cash positions.

The group has had to slash its capital expenditure allotment for the year to ₱42 billion from ₱78 billion previously.

For now, residential projects and pre-leased office spaces remain priorities, including commercial buildings rented out to call centers and outsourcing companies. However, he hinted that timelines set pre-pandemic may need adjustments.

"For all other projects, we just decided we will delay them, not necessarily cancel them, until such time that demand picks up again," the next-generation CEO said, referring to new restaurants and offerings.

Alliance Global posted a ₱4.1 billion profit as of June, down by 67 percent from year-ago levels as the country plunged into recession. Consolidated revenues fell by a fourth to ₱61.4 billion, dragged down by lockdowns meant to curb rising coronavirus cases.

Apart from keeping the company afloat, Tan said he draws wisdom from his father.

"I think the most important advice that my dad has given to all of us during this time of uncertainty is that we should be looking beyond our businesses... We have to all strive and seek a higher purpose, not just help our people and customers but also help the Philippines and the Filipino people as we weather these really, really dark times," he said.