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Leasing to BPO firms pushed

Posted on October 25, 2012 11:07:29 PM [ BusinessWorld Online ]
REAL ESTATE developer Eton Properties Philippines, Inc. plans to expand its business process outsourcing (BPO) leasing portfolio to account for around 30% of revenues by 2017 in order to cash in on growing demand for space in that sector, the company’s top official said yesterday.

“For next year, we will have more BPOs, and our recurring income stream will be much better as building constructions would’ve caught up. We’re finishing by the end of next year about three buildings, that’s about 80,000 square meters (sq. m.) of leasable space in order to cater to the growing BPO market,” Michael G. Tan, Eton Properties officer-in-charge, told reporters after the firm’s annual stockholders meeting at the Manila Golf and Country Club in Makati City yesterday.

“Revenue mix right now is about 10% recurring [income from BPO leasing] and 80% from residential. We’re looking at the recurring portion to go up to 30% or more, if we can manage, within the next five years. That’s the target,” Mr. Tan explained.

In order to achieve this, Eton Properties will be opening new projects at Eton Centris, the company’s 12-hectare integrated township project at the corner of Quezon Avenue and EDSA in Quezon City.

“We have to have more investment projects like office buildings and commercial centers, so we’re aiming for 130,000 sq. m. of leasable space in Centris by next year to be recognized as revenues in 2014.

Right now we have 50,000-60,000 sq. m. of BPO [space],” Mr. Tan noted.

In the meantime, Eton Properties said its residential business is also likely to grow next year given the company’s ready access to a vast land bank south of Metro Manila.

“We are optimistic about residential next year. Our performance will depend mostly on the location and products that we have. After all, we have access to around over 1,000 hectares of land bank, mostly in our area in Eton City,” Mr. Tan said, referring to Eton Properties’ near-1,000-hectare township property along South Luzon Expressway in Sta. Rosa, Laguna dubbed the “Makati of the South.”

Last Tuesday, the company announced that its board had approved to voluntarily delist as it will not meet the local bourse’s 10% minimum public float rule within the mandated year-end deadline. Eton Properties, with a current public float of 5.65%, is one of 27 listed firms identified by the local bourse that had yet to raise their public ownership levels to at least 10%. They face delisting should they fail.

The property firm posted a net income of P12.08 million in the first half, 94.49% less than the P219.36 million the previous year.

Revenues, composed of real estate sales and rental income, fell 80.56% to P281.91 million from P1.45 billion, while costs and expenses dropped 69.62% to P373.73 million from P1.23 billion.

Its shares shed 25 centavos or 8.39% to P2.73 apiece yesterday. -- Franz Jonathan G. de la Fuente        

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