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Eton expects higher income

Posted on August 30, 2011 10:07:36 PM [ BusinessWorld Online ]

ETON PROPERTIES, Inc., the real estate arm of the Lucio Tan Group, is poised to post higher profits this year as new township developments were reportedly driving sales growth, a ranking official yesterday said.

The developer is looking into surpassing the P288-million net income it realized last year, Eton Properties President and Chief Operating Officer Danilo E. Ignacio told BusinessWorld in a telephone interview, pointing to robust sales of its current projects.

“We expect to exceed our 2010 net income this year. By how much remains to be seen,” Mr. Ignacio said.

The company is expected to add this year new features to its two major townships in Santa Rosa, Laguna and in Quezon City.

“We will be introducing our fourth residential development in Eton City by next month, while in Eton Centris, a new midrange high-rise residential condominium will be introduced in the 4th quarter,” Mr. Ignacio said.

The upbeat outlook comes even as two of its developments were plagued by construction accidents.

“Fortunately, sales of our other projects have not been affected since our buyers recognize the incidents as accidents that do not detract from the soundness of their investments,” Mr. Ignacio said, adding some adjustments were made to the turnover dates given delays from work interruptions.

Ten workers had died at the construction site for The Eton Residences in Makati City after an overloaded service elevator fell from the 32nd floor in February.

No casualties, meanwhile, were reported when the second floor of Two Cyberpod Centris in Quezon City collapsed.

“Eton Properties took steps to bolster a focus on safety by hiring a senior safety specialist who helps, together with the construction management firms we’ve hired, bring a higher level of safety awareness in our project sites,” Mr. Ignacio said.

The construction management firm handling The Eton Residences at Greenbelt and Two Cyberpod Centris’ general contractor have long since been replaced, said Mr. Ignacio.

The Eton Residences at Greenbelt is slated for turnover in January next year, while Two Cyberpod is set to be completed by the yearend.

Amid ongoing construction developments in and out of Metro Manila, Mr. Ignacio also denied interest in further expanding into the real estate investments trust (REIT) market at present.

“Eventually as our office and commercial holdings expand further, setting up an REIT will be an option,” Mr. Ignacio said.

“However, at the moment it is not a priority for us,” he said.

The Bureau of Internal Revenue recently issued rules on the establishment of REITs, stock corporations that pool investor funds to manage income-generating real estate assets.

The rules have been deemed by most developers to be unworkable, discouraging major property players from pursuing the alternate investment vehicle.

“Given the current issues on public ownership levels and the value-added tax on the transfer of property assets to the REIT, we will wait to see how things play out,” he added. -- Franz Jonathan G. de la Fuente

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