SINGAPORE, 23 April 2024 – APAC Realty Limited (“APAC Realty”, the “Company” or together with its subsidiaries, the “Group”), a leading real estate services provider which operates a market-leading real estate brokerage in Singapore under the ERA brand, has entered into a ERA Franchise Agreement (the “Agreement”) with Upper Room Realty (Phils.) Inc. (“Franchisee” or “Upper Room”) for Manila, Philippines.
Under the Agreement, Upper Room has the right to operate or grant memberships for the operation of ERA member broker offices in Metro Manila for an initial 15-year term with effect from 4 May 2024. The Company has the option to purchase up to 20% of the shares in the Franchisee at a price determined by an independent valuer to be agreed between both parties, within 3 years from franchise agreement date. The Franchisee has the option to be granted exclusive and extended to the rest of Philippines, subject to additional fees and the fulfilment of certain conditions as set out in the Agreement.
Mr Marcus Chu, CEO of APAC Realty Limited said, “We are thrilled by this significant agreement, especially since it closely follows the signing of Master Franchise Agreements for Laos and Queensland in 2023. It underscores our dedication to expanding our Asia Pacific network and achieving our regional growth objectives. Furthermore, it is a testament of ERA Asia Pacific’s brand and reputational leadership in the region. The addition of the Philippines marks the 13th country in ERA Asia Pacific’s portfolio and the 40th under the ERA global umbrella.”
Upper Room will establish ERA Manila and its first Philippine based office at Century Spire Tower in the heart of the central business district of Makati, Manila. ERA Manila will be overseen by Mr Wealth Bourne Larida Gillego, an experienced figure in real estate, alongside Mr Arnel Almo Dela Rosa, a seasoned lawyer and certified public accountant specializing in the property sector. Mr Gillego will assume the role of Chairman, while Mr Dela Rosa will serve as President of ERA Manila.
“We are delighted to be a part of the ERA family and to serve as the Group’s representative in the Philippines. ERA Manila will adopt the highly successful business model and systems of ERA Singapore, and focus on Metro Manila in our first three years of operation. To announce our arrival in Manila’s thriving residential market, we will provide salespersons with better commission splits, access to local and regional projects, and upskilling opportunities through ERA Singapore’s salesperson training programmes. This will allow us to differentiate ourselves in the highly fragmented agency business and recruit up to 1,000 salespersons in the first three years of operation,” said Mr Gillego, Chairman, ERA Manila.
The Philippine Economy
The Philippines’ Department of Finance (“DoF”) reported that the economy closed 2023 with a GDP growth rate of 5.6%, despite an elevated inflation rate and external challenges to outpace major economies in Asia[1]. The strength was driven by domestic demand which was underpinned by higher household consumption and investments, particularly the government’s ‘Build-Better-More’ Program which continues have a multiplier effect on the economy. The ‘Build-Better-More’ infrastructure program[2] presently includes 194 Infrastructure Flagship Projects covering essential projects such as expressways, bridges, airports, railways, ports, telecommunications, and other social infrastructure, with an aggregate value of approximately PHP 8.3 trillion (approximately US$147.8 billion[3]).
Despite ongoing domestic and external headwinds, the DoF expects the country to record faster GDP growth of 6.5% to 7.5% percent in 2024. Drivers such as decelerating inflation, a robust and young labor market, improvements in the ease of doing business, sound external conditions, and a strong financial sector are expected to realise new investment and business growth that will provide high-quality jobs and increase household consumption[4].
Metro Manila Residential Market
Of the country’s population of 115.5 million[5] people, approximately 15 million[6] reside in the Metro Manila region. Investment activity in the Metro Manila region remained resilient in 4Q2023, especially in the luxury and Upscale property sector[7]. Consequently, the region saw a notable annual price increase of 26.3% in its high-end market in 2023, surpassing Dubai’s 16% price gain, which secured the top spot in last year’s report[8].
Commenting on the market, Mr Gillego said, “We will focus on the residential market in the first instance, working closely with local developers within our established network – such as Rockwell Land, Arthaland Corporation, SM Development Corporation (SMDC), Robinsons Land Corporation and Century Properties. We will also focus on Metro Manila’s strong resale market which continues to be driven by healthy demand from local homebuyers.”
ERA Franchising Model: A Win-Win Proposition
ERA Singapore’s franchising model presents a beneficial pathway for franchisees to fast-track growth, offering a combination of strong brand recognition, proven business model, access to property technologies and innovation, on-going support and networking opportunities.
Equating the benefits of franchising to the Group’s regional growth strategy, Mr Chu said, “Franchising serves as a low-risk avenue to enter new markets effectively. Through our rigorous selection process, we carefully identify reputable country partners committed to maintaining our brand’s integrity and delivering exceptional service to clients. The option to buy a stake in the franchisee in the near future provides us with the flexibility to participate in the growth and development of the franchisee at the right time.”
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[1] https://www.dof.gov.ph/phs-full-year-2023-gdp-growth-strongest-among-major-asian-economies/
[2] https://neda.gov.ph/build-better-more-infra-program-to-further-propel-ph-economy-neda/
[3] Based on PHP1.0 : USD0.018 on 2 March 2023
[4] https://www.dof.gov.ph/phs-full-year-2023-gdp-growth-strongest-among-major-asian-economies/
[5] World Bank Data, 2022 (Latest)
[6] https://worldpopulationreview.com/world-cities/manila-population
[7] https://www.jll.com.ph/content/dam/jll-com/documents/pdf/research/apac/jll-asia-pacific-sector-reports-4q-2023.pdf
[8] https://www.mansionglobal.com/articles/philippines-capital-manila-led-the-world-in-luxury-home-price-growth-last-year-28a75839
