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Filinvest Land to tap bond market anew this year to fund higher budget

Posted on May 10, 2015 09:58:00 PM [ BusinessWorld Online ]

FILINVEST Land, Inc. (FLI) is returning to the bond market this year to fund the development of projects that will further boost the Gotianun-led property firm’s recurring profit.

“We will probably [issue bonds] in the latter part [of the year],” FLI President and Chief Executive Officer Josephine Gotianun-Yap told reporters last Friday, but declined to provide a specific amount that will be raised from the debt issuance.

The real estate firm increased its capital expenditure budget to P24 billion this year from P15 billion in 2014. The company is targeting to triple its gross leasable area to 966,000 square meters by 2019 from 343,000 last year.

The last time FLI tapped the bond market was in November last year when it raised P7 billion from the issuance of seven-year fixed-rate bonds due 2021 and 2024.

The property developer sees recurring income accounting for as much as 40% of the business by next year -- compared to 30% in 2014 -- when it starts to feel the impact of the commercial and office projects launched in previous years, Ms. Yap said.

IN THE PIPELINE
This year, FLI plans to launch P16.2 billion worth of residential projects, including a 20-hectare predominantly lots-only development along Daang Hari Road.

Average lot cuts for the project are pegged at 350 square meters and will be sold at a price of roughly P45,000 per square meter, generating between P2 billion and P2.5 billion in sales, Ms. Yap said.

Next year, FLI will start the construction of its mixed-use development in Cubao called Activa, which sits on a 1.3-hectare property at the junction of the Metro Rail Transit Line 3 and Light Rail Transit Line 2, two of the country’s busiest mass rail systems.

Activa will be home to two office towers serving business process outsourcing firms, a residential building, a small office-home office development and a hotel under a new brand owned by the Filinvest group, Ms. Yap said.

Another project that will be launched next year is a project located at the site of the former Philcomcen building in Ortigas.

“That’s primarily office,” Ms. Yap said.

FLI won the bidding held by state-run Government Service Insurance System for the Philcomcen property in December 2013.

FLI is a subsidiary of Filinvest Development Corp., the holding firm for the Gotianun family’s businesses in banking, hotel, power, and sugar farming and milling. -- Krista Angela M. Montealegre         
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