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Highlands to allot P800-M capex this year to regain profitability

By Danessa O. Rivera
04/24/2012 [ tribune.net.ph ]

High end leisure property developer Highlands Prime Inc., also an affiliate of the SM Group, will allot a capital expenditure of P800 million this year as it plans to be competitive and expects to post profits coming from the net loss suffered in 2011.

Last year, the company posted a net loss of P35 million due to stiff competition and a 22-percent decline in real state revenues due to lower reservation sales.

In the first quarter of 2012, Highlands Prime president Henry Sy Jr. said reservation sales grew by 54 percent to about P240 million from January to April 20 from same period last year’s around P100 million.

With that, Sy noted that net income in the first quarter should be much better than in the same period last year and this has given them confidence that the company will reverse its losses and post a profit in 2012.

“We expect better sales this year due to the growth spurt in the economy and there is increasing demand for our beautiful products,” Sy said, adding that there is little competition in its market since few developers can match the size and quality of its property in Tagaytay.

Meanwhile, Sy said half of this year’s P800 million capex will be used for the development of the second phase of The Woodridge Place which was launched last year.

The balance will be used to fund the development of Aspenhills in The Highlands, which was launched last Easter, and a residential lot development in the Midlands which is still in the final stages of planning and is planned to be launched mid 2012.

Aspenhills is a 27-hectare property development located in one of the slopes of The Highlands, offering a breathtaking view of the mountains of Batangas and Laguna, the Canlubang Valley and Laguna de Bay, with expected projected sales of P1.3 billion.

Its first phase will have 182 lots ranging from 350 to 400 square meters each and these will be offered at P14,000 to P15,000 per square meter, depending on the location and the view of the lot.

On the other hand, the residential development in the Midlands will offer prime residential lots and provide residents with a great view of Mt. Makiling and Taal Lake.

He also said the company intends to start the repositioning of its offerings to better manage challenges brought about by evolving market preferences in the leisure property industry — offering smaller lot sizes to attract a wider customer base.

Sy said that once the firm regains profitability, they are considering increasing their public float and sell more shares to the public despite the company’s compliance with the Philippine Stock Exchange’s minimum public ownership rule.
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