Subic Housing
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Contact e-mail

subic@alamco.com.au

We need a partner in the Subic Project to build 370 low cost houses. Alamco will contribute the land into the joint venture, arrange pre-selling to the La Genda Employees and other private buyers and arrange with a Philippine Mortgage Bank to underwrite the mortgage. 

Location

Subic Housing is located in Sto. Tomas, Subic Zambales, Philippines. Phase 1 consist of 9.5 hectares of developed housing subdivision with 370 individual titles. The lots are 170 square meters average size. A detailed measurement of each individual lot is on file. There are 3 demo houses on site. Typically hallow blocks with GI roof construction. 

Market

The housing development is only 5-10 minutes to La Genda Hotel and Casino complex located in Subic Naval Base. La Genda is in operation for the past 5 years and has 2,000 employees. The Subic housing project is developed for a) La Genda employees b) all private buyers in Subic c) foreign nationals wanting to retire in Subic. There is interest from retired Australians to have a residence in Subic.

La Genda Casino Hotel

The Hotel Casino complex is owned by Malaysian group Genting Highlands the same group that owns Burswood Casino and Star Cruises Cruise ships. Because of the proximity of the development area to the Hotel, they are willing to endorse the housing projects to their employees and the Human Resources will do automatic salary deductions for mortgage payments.

Budget Constraints

The challenge is to make a house and land package for amount ranging from P800,000 to P1,000,000 maximum. The buyers have an income range of US$250 to 500.00 per month. Typically a husband and wife works so we are looking at joint income of about US$500 to $700.00 per month. 

Allocation for Housing

On the high side, working on a P1,000,000 house and land package budget, this is AU$40,000 at current Peso to Australian conversion of P25:AU$1.

  • Budget for the land AUD10,000
  • Budget for the House AUD20,000
  • Budget for Group Margin AUD10,000

On the low side, working on a P800,000 house and land package budget, this is Typical house design is a 10 x 5 x 1.5 story house. The challenge is to make the house and lot package to cost about Peso 800,000.

House construction

This project is viable from an expatriate contractor point of view if the houses are constructed on a kit form. A local contractor is found to construct the houses of concrete pre-manufactures moulded concrete material called MOLDICRETE

  • Construction period is shorten. 
  • Completion is controlled meaning there are little local contingencies to manage.
  • The customers will be pleased with the quality of the finished product.

Arguments against the kit concept are:

  • The materials are non traditional and may not be accepted by the mortgage bank
  • the customers are not accustomed to the materials. May have impact on its marketability, as they are expecting a cement type construction.
  • The cost to build locally is cheaper than an imported item.

Suggested Process 

  1. Confirm sales offer of Magdalena Homes. Part payment terms, reduced price to $10,000 from current offer of $13,500 per block. The mortgage has to be also pre-sold to a mortgage bank. House design and terms of mortgage will be coming from the mortgage bank.
  2. Alamco Design an Australian built house. should cost about $15,000 installed. The area of the house is 10 x 8 meters 1.5 storey open design patterned after Better Living Model. Construction material is Perth Pergola Type, with cement block floor. Semi-finished to reduce cost but increase area. A computer simulation presentation to be completed with the design.
  3. Trip to Manila. The package to be presented to La Genda and Employees first come first serve basis. All 370 houses has to be constructed at once. The land component to be sold off to the employees as first stage. Mortgagor is Alamco. The current rate of interest in the Philippines is 2% per month. The house component requires a deposit of 10%. Pre negotiation with Metro Bank or Australian Bank or the Casino itself or Marikina Bank (Cora Liamson) about transferring either by sale the management of the mortgage.
  4. LC will be opened from Philippine Bank to Alamco in Perth this is to buy materials and pay for consultants. Materials are pre-cut in Perth and sent via container to Subic. Project should be completed in 12 months maximum.