Posted on May 27, 2015 09:38:00 PM [
BusinessWorld Online ]
By Krista A. M. Montealegre, Senior
Reporter
ROCKWELL Land Corp. is raising its
2015 capital expenditures budget as the Lopez-led property developer ramps up
the development of office and retail projects to beef up recurring income
stream in the next five years.
On the sidelines of the company’s
stockholders’ meeting yesterday, Rockwell Land President Nestor J. Padilla said
the real estate firm is spending P13 billion this year, 50% higher than the
P8.7-billion allocation in 2014.
The listed company has secured its
financing to support its capex, but it may raise funds in the latter part of
the year depending on how acquisitions pan out, Rockwell Land Senior
Vice-President Ellen V. Almodiel said.
Majority of the programmed spending
will be earmarked to finance the development of its projects.
“The focus on increasing recurring
income is a priority in the next five years,” Mr. Padilla said.
Rockwell Land is projecting the share
of the company’s commercial development business to earnings before interest,
taxes, depreciation and amortization (EBITDA) to increase to roughly 40% from
32% last year.
To achieve this, the listed real
estate firm is growing its office and retail space in the next five years by 2
times and 1.5 times from 2014 levels.
Rockwell inked two long-term lease
deals for office and retail properties in San Juan City and Mandaluyong City
that will contribute some P500 million to recurring EBITDA annually starting
2017, about half of 2014’s P986 million. Development of the two properties will
cost P4.5 billion.
These projects, which cater mainly to
the growing business process outsourcing industry, will add 68,000 square
meters (sq.m.) of leasable space.
Rockwell Land is breaking ground this
year on the expansion of Power Plant Mall, which will deliver another 5,700
sq.m. of leasable space in the premier shopping center.
In the fourth quarter, the listed firm
is opening the third tower of Rockwell Business Center in Ortigas and 8
Rockwell, the company’s first premium office building within Rockwell Center,
substantially beefing up revenues from commercial development.
Rockwell Land is eyeing to raise its
public float from the current 12%-13% to allow the “market to price [its
shares] correctly,” but did not provide a definite timetable.
Its shares rose 0.61% to close at
P1.66 apiece, just a few points above its 52-week low of P1.60 apiece.
“It’s really our frustration that the
market does not price Rockwell the way it should be priced. The price does not
reflect the true performance of the company. The price does not reflect the
brand following of Rockwell,” Mr. Padilla said.
The company is also evaluating
opportunities for overseas expansion, capitalizing on opportunities presented
by the Association of Southeast Asian Nations integration.
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