By MST Business | Posted on Mar. 21, 2013 at 12:01am
[ manilastandardtoday.com ]
Eton Properties Philippines Inc., the delisted property unit of business tycoon Lucio Tan, plans to increase the contribution of rental income to 30 percent to 50 percent of total revenues over the next five years to reduce earnings volatility.
The LT Group said in a filing with the Philippine Stock Exchange the property unit would build and lease at least one office building over the next five years in order to achieve the target.
Eton plans to build business process outsourcing buildings either in Eton City in Sta. Rosa, Laguna, Eton Centris in Quezon City or in the Makati central business district.
“LT Group believes that this will complement Eton’s overall growth strategy by providing recurring cash flow to support its development capital expenditure requirements and driving demand for its master-planned community residential offerings,” LT Group said.
Eton has five office buildings with 50,000 square meters of leasable space, accounting for 10 percent of the total revenues.
The property company hopes to increase the rental income to 20 percent of revenues with the addition of another 80,000 square meters of leasable space for BPO companies by the end of 2013 and the completion of two more BPO buildings in Eton Centris in Quezon City.
The LT Group reported that Eton’s high-end projects posted reservation sales of P1.32 billion in 2012 while the middle-income projects booked pre-sales of P1.97 billion. Sales of affordable projects registered reservation sales of P790 million last year.
Eton, through its own holdings and those of affiliates, has access to an extensive landbank in central locations in the Philippines.
The LT Group has one of the largest land banks, which gives “asset-light” land acquisition strategy by acquiring land only as needed for the near- to medium-term projects, primarily from affiliate members of the Tan companies.
Eton went public in 2007 through the backdoor listing of Balabac Resources and Holdings Corp.
After more than five years of operations, Eton launched 47 projects. Its portfolio of launched and completed projects includes residential, commercial, office projects and township developments.