Polytechnic University of the Philippines

COLLEGE OF ACCOUNTANCY AND FINANCE

Sta. Mesa, Manila

A Research Paper

on

Submitted to:

Professor Nicetas P. Sison

ECON 20033- Basic Microeconomics

Submitted by:

Maglaque, Danielle Joyce B.

BSBA FM-2-8s

16 October 2019
DMCI Homes' History

In 1954, David Consunji formed DM Consunji which firstly engaged in construction services.
During its early years, the construction company won the bid to construct chicken houses for the Bureau
of Animal Industry. From its early projects, it has earned reputation of on time delivery, quality work and
a pioneer of advanced construction technology. It has built over 500 projects including major landmarks
such as Mactan Shangri-la Hotel, Manila Hotel, Westin Philippine Plaza, Asian Hospital, Manila Doctor’s
Hospital and the New Istana Palace in Brunei.

From its ventures as a construction company, DM Consunji evolved into DMCI Holdings which is
huge business enterprise majority owned by Consunji family. DMCI Holdings was incorporated on
March 8, 1995 as a holding company to consolidate all construction businesses and related interests of
Consunji family. It was December 18, 1995 when it was listed in Philippine Stock Exchange. This means
that DMCI Holdings and its related businesses are Corporations, having been public, and open for
investments. DMCI Holdings is also known to have diverse business interests such as mining (Semirara
Mining), power (DMCI Power), water (Maynilad and Subic Water) and infrastructure (Tarlac La Union
Express Way).

In 1999, DMCI Holdings formed its housing division which is DMCI Project Developers under the
brand name DMCI Homes. It capitalizes on DM Consunji (construction) to control the quality and cost of
its developments. In its simplest, DMCI Homes is just one of the wholly owned subsidiary of DMCI
Holdings which engages in construction services, mining, water distribution, power generation and
infrastructure.
DMCI Homes Providing Real Estate Development in the Service Market

DMCI Homes has been in the service market specifically into estate development. Technically,
real estate development, or property development is a business process, which includes activities that
range from the renovation and re-lease of existing buildings to the purchase of raw land and the sale of
developed land or parcels to others. It is where a developer takes a building or piece of land and
transforms it into something people want to see, want to look at and want to call their home.

DMCI Homes as one of best residential developer in the country provides quality homes at best
value with first-rate amenities. DMCI Homes is the first in the Philippines to get a quadruple A developer
license which is the highest license that the government can give to a contractor who met all its
requirements. Since its establishment, it has completed 50 resort-inspired projects n Baguio City,
Boracay, Davao City and Mega Manila which in total become home for more than 50,000 residents. DMCI
Homes has also been recognized with its quality service from Reader's Digest Most Trusted Brand, BCI
Asi Top 10 Best Developer and Urban Land Institute Philippines' Healthy Places Awards.

It has been giving service to modest income families, offering residential communities and has
since completed projects mostly concentrated in the area of Mega Manila. In 1999, the project
developer (DMCI Homes), began with Lake View Manors and in 2001, followed by Hampstead Gradens. It
was during year 2003 that the project developer has been aggressive in building bigger projects with
more amenities in its East Ortigas Mansions, Villa Alegre and Mayfield Park developments. DMCI Homes’
as well is the force behind establishing the Cypress Towers in Fort Bonifacio Global City (BGC), Magnolia
Place in Quezon City and Dansalan Gardens in Mandaluyong. It has also involved in residential leisure
estate development through its Alta Vista project in Boracay.

Since it is real estate arm of its parent DMCI Holdings Inc., its performance based on its income
generation matters which is proved to be competitive compared to other owned subsidiary of the DMCI
Holdings. According to the 2012 annual report of DMCI Holdings Inc., DMCI Homes posted Php2.2 billion
net contribution to the holding company’s annual income and posted about Php9.2 billion in revenues.
As of its 2012 annual report, DMCI Homes has 53 residential projects, has sold more than 15,000 units in
2011 and 2012, amounting to about Php34.3 billion in sales.

DMCI Homes' Competitors as a Real Estate Developer

 Philippine real estate market as observed is still dominated by few major key players. DMCI
Homes representing just one slot in the list, there are bigger ones which exist to compete with DMCI
Homes, or to say, that DMCI Homes is trying to compete with since. Based on their market capitalization
a conclusion can be made on the position that DMCI Homes has achieved with its competitors.

One of those is the Ayala Land which is currently the largest real estate developer in the
Philippines with a market capitalization of $9.87 billion as of April 2014. Giving strength and success to
its operation is its residential arm having five brands: Ayala Land Premier, Alveo, Avida, Amaia, and
BellaVita. All of these five brands has a total of 147 projects which can give an estimated sales of about
240 billion pesos.

SM Prime which announced consolidation on real estate business in 2013 intentionally made
possible to rival Ayala Land. Having been active in the making of some leisure estate and residential
projects, SM Prime has a ballooned market capitalization of $9.554 billion as of April 2014. Once this has
been consolidated, SM Prime is predicted to be the leading in Southeast Asia in providing real estate
developments. Among SM’s noted residential projects include Jazz Residences in Makati, Light
Residences along EDSA in Mandaluyong, Sun and Green Residences in Manila, and Blue Residences in
Quezon City.

Ranked on top of DMCI Homes is the Megawolrd Corporation which is owned by the third richest
man in the Philippines, Andrew Tan. The Eastwood City is one of the township the company has
produced. And as of 2013, Megaworld has 10 more townships in various stages of development, with a
combined land area of 253 hectares. Aside from township, it also engaged in residential projects such as
Greenbelt Hamilton, Paseo Heights, and Three Central in Makati City

Over the years, DMCI Homes along with its main competitors (Ayala Land, SM Prime and
Megaworld) became one of the best real estate developers as of 2014 and has built a number of
noteworthy projects, including the multiproject Acacia Estates in Taguig and other developments
including One Castilla Place, Sorrel Residences, and Torre de Manila. DMCI Homes has topped
competitors such as Federal Land, Robinsons Land Corp., Vista Land and Lifescapes, Filinvest Land, Shang
Properties and Century Properties in terms of its market capitalization.

DMCI Homes' Strategies in Advertising and Promotion

To stimulate demand, developers use several media types. Outdoor advertising is the most
popular media type being used. Outdoor ads are being placed along major thorough fares in Metro
Manila such as EDSA. Companies are also utilizing television, radio and print ads in their brand building
activities. In addition, companies are also using its websites to inform clients of new projects and
construction updates of existing projects. Companies such as Ayala Land are also making their websites
e-commerce capable by creating the infrastructure to allow online reservations. Property developers are
also using public relations by contracting writers to discuss its property offerings.

Based from the 2007 and 2008 marketing and advertising expenses of key competitors, it is
derived that DMCI Homes spent almost a double of what its competitors (Avida Land, Megaworld, and
Robinsons Land) are spending on advertising and promotion. However, this may have occurred for the
reason of stimulating demand from the increasing supply, so companies have increased their promotion
activities.

References

https://www.dmciholdings.com/our_company/page/profile
https://www.zipmatch.com/blog/the-philippines-top-real-estate-developers/
https://www.dropbox.com/s/f5rzlvcutgrk8oe/39992367-Sample-STRAMA-Final-Paper2.pdf?dl=0
https://www.dmciholdings.com/our_businesses/page/residential-development