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Tan property firm beefs up portfolio

Posted on July 19, 2013 08:23:44 PM [ BusinessWorld Online ]
ETON PROPERTIES Philippines, Inc., the real estate developer of Lucio C. Tan-led conglomerate LT Group, Inc., will focus on commercial and office projects in the next five years in order to diversify the unit's revenue stream, according to a statement attached to the parent's disclosure on Friday.
LT Group said the focus involves development of more commercial centers, retail hubs, business process outsourcing (BPO) offices and hotels to "cater to a significantly growing retail, leisure and outsourcing market…in major key growth centers in Metro Manila".
"For 2013 and the next five years, we are focusing our efforts on growing our leasing business to take advantage of the significant prospects in the leisure, retail and BPO market in the country," the statement quoted Danilo A. Antonio, chief operating officer of Eton Properties, as saying.
"We are excited to introduce novel concepts to grow our property portfolio and recurring income that will sustain the company's growth for the long term," he added.
"Alongside the shift in business directions, we shall be realigning our organizational structure and business processes to better serve our target markets."
LT Group said Eton's new focus will "help the company diversify its revenue stream and strengthen its position in the industry while simultaneously sustaining its residential development business."
It added that construction of Eton's residential projects are "in full blast" and cited "high occupancy and lease rates in our office buildings given strong demand from the outsourcing industry".
Mr. Antonio noted that Centris Cyberpod Three in Quezon City -- Eton's sixth BPO office building -- is set to be completed by yearend. "Given the strong demand for office space, the building is expected to be pre-leased even before turnover," Mr. Antonio said.
LT Group noted that office space business made the "strongest" contribution to Eton's recurring income.
"Since the market continues to be strong, we are considering some adjustments in the Eton Centris master plan to accommodate future demand for office space and strengthen our BPO presence", Mr. Antonio said.
Eton is also upbeat on its retail and commercial businesses, as the company plans to develop a new lifestyle mall within Eton Centris in Quezon City.
Besides this, LT Group said that another commercial strip will open in Eton City -- the company's flagship township project in Sta. Rosa, Laguna. The project, which is called Village Walk, will include restaurants and bars, boutiques, convenience stores and service-oriented shops.
Eton also plans to develop leisure projects, citing the government' thrust on tourism-related projects. "There is significant demand from the leisure and retirees market that we need to address," Mr. Antonio said. “From a developer standpoint, we see the potential of this market that continues to expand.”
Last month, Mr. Antonio said Eton plans to spend up to P10 billion in the next four years for its existing and new projects. For this year alone, the company planned to spend up to P4 billion to complete existing projects. Projects that are slated for completion are West Wing Villas in Quezon City; 8 Adriatico Condominium in Manila and 68 Roces luxury residences in Quezon City, he had said then.
Eton Properties, whose net income plunged 94.27% to P42.04 million last year from P733.29 million in 2011 as it had yet to complete its projects, delisted in last Jan. 2 after it decided not to meet the 10% minimum public ownership level required by the bourse. It then had a 5.65% public float.
Net income of its listed parent, LT Group, surged 54% to P5.80 billion in the first quarter from P3.78 billion in the same three months last year as revenues jumped 13.77% to P17.685 billion from P15.544 billion, outpacing a 2.43% rise in cost of sales to P7.156 billion from P6.986 billion.
LT Group shares lost 50 centavos or 2.08% to close at P23.50 apiece on Friday from P24 each on Thursday. -- C. A. M. C. Feliciano      

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