By Richmond S. Mercurio (The Philippine Star) | Updated May 30, 2015 - 12:00am
MANILA, Philippines - Eton Properties Philippines Inc., the real estate arm of the Lucio Tan Group, is embarking on an aggressive investment spree over the next five years with at least P28 billion earmarked for expansion.
In an interview following the company’s annual stockholders meeting yesterday, Eton deputy chief operating officer Josefino C. Lucas said the company is doubling its capital expenditures this year to P9 billion from last year’s P4.3 billion.
“Among the company’s 2015 plans is to launch a mixed-use development composed of a high rise condominium, a boutique mall, and a BPO office building. Plans are also afoot to commence construction of a fifth BPO building in Eton Centris, and to expand Centris Walk, in order to increase our retail footprint and enhance recurring income streams,” Lucas said.
This year’s spending budget will form part of the company’s plan to spend at least P28 billion until 2019.
Lucas said the five-year capex consists only of the projects to be launched this year as well as several more in the pipeline.
“So if there are projects somewhere around 2018, then that would mean revising the capex for the next five years,” he said.
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Eton is planning to almost double its current gross leasable offering of 156,000 square meters to 300,000 sqm over the next two to four years.
Lucas said 70 percent of the company’s total revenues currently come from residential projects while the remaining 30 percent is from its leasing business.
Lucas said the plan is to increase the contribution of leasing to 35 percent by yearend and 50 percent by 2020 through its five-year expansion binge.
He said Eton’s leasing revenues this year “would easily hit P1.1 billion or P1.2 billion,” up from last year’s P740 million.
“Our existing projects are mostly residential. Our BPOs are fully leased out. We could have started earlier but that did not happen because last year was consolidation, trying to prepare plans for the next five years,” Lucas said.
“We’re not being very aggressive in residential, we’re tempering it. We would like to build up more on our recurring income by capitalizing on the BPO market. We think that’s where significant growth is,” he added.
Last year, the company focused primarily on the delivery of its projects and the completion of existing developments which resulted in a 38-percent drop in gross revenues at P2.28 billion.
Real estate sales accounted for revenues of P1.54 billion, declining 52 percent from the previous year as a direct result of the temporary halt in sales activities.
Eton, however, still ended 2014 with a net income of P119.86 million, 14 percent higher than the previous year’s P105.07 million.
“We believe that the real estate market will remain strong in the segments where Eton operates, and that there is room for us to pursue its expansion plans beginning 2015,” Lucas said.