A strategic management paper for Gatchalian Realty, Inc.

• Main Author: Gatchalian, Robert
• Format: text
• Language: English
• Published: Animo Repository 2005
• Subjects: Real estate business; Strategic planning; Gatchalian Realty; Inc.
• Online Access: https://animorepository.dlsu.edu.ph/etd_masteral/3625
• Institution: De La Salle University

The real estate by industry itself generates 4.5% of the country economic output. From this industry, a lot of jobs are created due to the labor and materials required in its operations. NEDA estimates the multiplier effect of the housing sector to be 16.6 times or for every 10 billion spent on housing sector the economy expands further by 166 billion. Real estates allied industry the construction industry contributes another 4.5% of the total economic output of the country. With the economic contribution of the industry, the government has given attention in further growing the housing industry by shortening the processes involved and by making housing more affordable. With this in mind the economic growth is sustained and poverty is alleviated by providing jobs and housing units for the poor. The effects of the 1997 crisis still exist in the real estate industry, the longest downturn in the industry that lasted for almost four years. After which the growth has been low. The slow progress could be attributed to the several factors some of which are political instability, graft and corruption, and the fiscal deficit. Analyst has predicted that the downturn has ended and a brighter future awaits the industry. The external environment signals the positive indicators for the industry. GDP which is directly related to industry growth has grown above targets in 2004. Bangko Sentral reported an increase of the dollar remittance of the OFW. The dollar rich Filipino Americans and other Filipino immigrants can now purchase lands under the dual citizenship law. The increase in households further increases the demand in the housing sector. Working couples are also on the trend of increase. The government focuses its efforts in addressing the housing needs of the class D and E of the income segment leaving most of the A, B, & C market to the private sector. The upper end market A & B, compose 1% of the Philippine population while middle income market, C1 and C2, compose 25% of the population. Gatchalian Realty, Inc. is in the property development industry which satisfies the need for conversion and enhancement of land value for residential and/or non-residential use. The company started out from modest beginnings of its founder Gonzalo having a vision of selling lots at pocket friendly rates. Together with his eldest son Robert Sr. they started the business in 1963 and amassed sizable raw lands for residential development. Currently the company is still engaged in property development and sale of its residential projects. GRI is also into leasing of warehouse, office and commercial space. Having the bright future for the real estate sector, the company should exert extra efforts in further growing the company. To do so the following strategies are recommended. 1. Sell non-performing assets and/or assets with low returns to improve its leverage ratios and to fund priority projects. 2. Enter to new channels of distribution.