Posted on
January 24, 2013 10:52:45 PM [ BusinessWorld Online ]
FEDERAL LAND,
Inc., the real estate arm of conglomerate GT Capital Holdings, Inc., plans to
spend P12 billion on projects this year, about a third more than 2012 levels, a
senior company official said recently.
“We are budgeting a capex (capital
expenditure) of P12 billion in 2013 as Federal Land remains bullish in 2013,”
Jose Mari H. Banzon, Federal Land executive vice-president and general manager,
said in an e-mail on Wednesday last week.
This is up
33.33% from the P9 billion the company spent last year, he then said in a text
message last Monday.
PURPOSE
“Bulk will be
for construction of condominium developments and retail and office buildings.
Funding will be from internal cash flow and borrowings,” Mr. Banzon said in his
text when asked for details.
He cited
perceived robust demand for the company’s projects as the reason for the
planned increase in spending this year.
“Reservation
sales remained robust in 2012, growing by over 50% as compared to the previous
year, driven by strong demand for our residential projects in Metro Manila and
Cebu,” Mr. Banzon said in his e-mail.
“Net income
grew by an even larger margin, buoyed by the strong sales and some
extraordinary income,” he added, without elaborating.
GOOD
ENVIRONMENT
Mr. Banzon
cited in his e-mail factors that are expected to support the company’s growth
this year.
“Interest
rates are expected to remain low and overseas remittances are forecasted to
remain steady. The upcoming elections and the likely upgrade of the Philippine
debt rating are expected to further spur the economy and benefit our business,”
he said.
Approximately
12 property projects are lined up for launching this year, Mr. Banzon added.
“We launched
12 projects in 2012 located in strong growth areas, including Bonifacio Global
City (BGC), the (Manila) Bay Area, Binondo, Paco, and Cebu,” he wrote.
“We expect to
launch at least the same number of projects in 2013 to be situated in both
existing areas as well as new locations.”
ENOUGH FOR
NOW
In terms of
land, Mr. Banzon said Federal Land’s current holdings are sufficient for the
next decade.
“We believe
that our current land bank is sufficient to support our development for the
next 10 years. We are not aggressively looking to expand our land bank at the
moment but do look at opportunities as they arise,” he said in the e-mail.
Federal Land
now has land holdings totaling about 100 hectares, mostly in prime areas like
BGC, Makati City, Ortigas Center, and Manila Bay, Mr. Banzon said.
Federal
Land’s parent, GT Capital, is the holding firm for the businesses of the Ty
family, with investments in banking, real estate, power generation, life
insurance, and automobiles.
The firm more
than doubled its net income to P6.86 billion as of September last year from
P2.64 billion in the same nine months in 2011, due to gains from the
consolidation of its power business, a bigger share in the net income of its
units, and non-recurring income from its property subsidiary.
In the same
comparative periods, revenues -- consisting mostly of fees, equity in net
income of associates, as well as finance and other income -- tripled to P16.70
billion from P5.37 billion, while costs and expenses grew more than threefold
to P9.71 billion from P2.66 billion.
Shares of GT
Capital added P13 or 1.95% to close at P678 apiece yesterday from P665 last
Wednesday. -- F. J. G. de la Fuente
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