October 23, 2019 | 12:08 am [ bworldonline.com ]
By Denise A. Valdez, Reporter
KEPWEALTH PROPERTY Phils., Inc. (KPPI) is planning to acquire new spaces in Metro Manila and Davao City which it will use for commercial or office leasing.
In a progress report to the stock exchange yesterday, the newly listed firm said it will be using the P384.77 million it raised in its initial public offering (IPO) in August to buy 3,500 square meters of space.
“Upon completion of the acquisitions using the proceeds from the IPO, the company expects to have an estimated 18,121 square meters of leasable space,” it said.
KPPI said it has not made the acquisitions yet, but it is looking at high-traffic urban areas such as Quezon City, Pasig City, Makati City and Davao City. Investing in these areas will spread the operations of the company outside its current focus in Cebu City, thereby reducing concentration risks. It will also open new recurring revenue streams for the company from the would-be tenants of the spaces.
Closing of several of the planned acquisitions can be expected within the first half of next year. “These acquisitions will undergo extensive business development studies and due diligence to assess the worth and value of properties based on location, use and yield,” KPPI said.
The company also said it wants to focus on its current business-property leasing and management-and has “no plans to engage in the business of a real estate developer.”
Instead, what the company wants to do is increase its asset management portfolio to complement its leasing business. Among the properties and developments it is looking at are an unnamed “prime property” in Quezon City and the Apo View Hotel in Davao City.
Specifically, the property in Quezon City is being eyed for its growing commercial and residential real estate market and the plan of the property owner to build a five-tower complex within the 10,540 square meter lot. For the Davao City hotel, KPPI said it is interested because the owner is planning to build two 40-story towers with commercial and retail spaces.
“Currently, the company continuously discusses potential business with the property owners,” it said.
Minus offer expenses from last August’s IPO, KPPI was able to record net proceeds of P372.12 million. It was able to sell 67,032,607 common shares to the public during its offer period.
KPPI was the first company to hold an IPO this year, followed by coconut product manufacturer Axelum Resources Corp. and Villar-led AllHome Corp. earlier this month. Also in the pipeline are Cal-Comp Technology (Philippines), Inc. and Fruitas Holdings, Inc.
KPPI currently owns 77 units with 98 leasable spaces of Kepwealth Center in the Cebu Business Park. Part of its portfolio is managing 459 units in different buildings in Metro Manila, including Oxford Suites, Medical Plaza Ortigas, Burgundy Corporate Tower, Burgundy West Bay Tower, Atrium Mall, Icon Macapagal and Vivaldi Residences-Cubao Commercial Space.
In the first quarter, KPPI saw its net income grow 12% to P8.69 million due to a 13% rise in revenues to P22.65 million.
Its net income last year ended flat at P34.3 million, while revenues jumped 8% to P81.85 million.
Shares in KPPI went down 40 centavos or 3.4% to P11.38 apiece on Tuesday.
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