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Anchor Land hikes capital expenditures to P5.5 billion

Posted on June 05, 2011 08:23:20 PM [ BusinessWorld Online ]

LISTED PROPERTY developer Anchor Land Holdings, Inc., which has a niche market in the Chinese-Filipino community, will almost double its capital expenditures this year to a record P5.5 billion, an executive said late last week.
The capital expenditures will cover the construction of six existing projects while two new projects will be launched this year amid robust demand.

“For this year, capital expenditures is around P5.5 billion... As of now, we have six ongoing projects,” Anchor Land Vice-Chairman Steve Li told reporters.

The latest figures showed an 83% growth from P3 billion the property firm spent last year. “[The funds will be] a combination of internally generated and more from bank financing,” Mr. Li said.

Part of the capital spending includes a portion of last month’s P974.1-million purchase by Anchor Land subsidiary Posh Properties Development Corp. of two 9,059.70-square-meter properties from D.M. Wenceslao and Associates, Inc. in Parañaque City.

Furthermore, construction of the 56-storey, P3-billion Anchor SkySuites, which will be the tallest building in Chinatown area of Binondo in Manila, is ongoing and will be completed in December 2014.

The company is expecting double-digit profit growth this year on the back of a projected P3 billion in revenues.

Aside from the Anchor SkySuites, Mr. Li said top revenue contributors in the next two years are the 18-storey SoleMare ParkSuites in Parañaque City, and the 39-storey Wharton ParkSuites in Manila. “We are quite confident that we should be able to hit P3 billion revenues this year,” Mr. Li said. “This year, we expect to be able to have double-digit growth in terms of bottom line.”

Net income of Anchor Land grew to P566 million last year, up by 52% compared to its 2009 net income of P373 million.

But Mr. Li said: “Inflation and cost of construction getting is higher so maintaining costs is one of greatest challenges.”

Moving forward, the company will launch new projects that will assure income streams. “We intend to launch two additional projects within this year. One is the Clairmont in San Juan and the other one is the Phase 3 of SoleMare,” Mr. Li said. Spending for the SoleMare Phase 3 will be about P4 billion, he added.

Late last week, Anchor Land signed a financing deal for Chinabank Banking Corp. to provide cheap loans to unit buyers of the listed real estate firm.

Stronger sales of high-end condominium units boosted profits of Anchor Land Holdings. Earnings surged by more than half to P212.44 million in the first quarter this year, from P138.5 million during the same quarter last year.

Shares in Anchor Land were last traded on June 2 at P19 apiece. -- Neil Jerome C. Morales

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