AboitizLand Inc. is spending P25 billion in the next five years to expand market share in the property industry.
The real estate development unit of the Aboitiz Group intends to raise its revenue contribution to parent Aboitiz Equity Ventures Inc. (AEV), said Andoni Aboitiz, president and chief executive officer of AboitizLand, told report-ers.
“I do not want to be 3 percent of AEV’s revenues for the rest of my life. I do not exactly know by how much we want to grow the business, but the mandate is to really grow substantially. So that means, a very steep increase,” Aboitiz said.
“For the year, we have earmarked P5 billion in capital spending, and if we succeed in what we are doing—and we will know in the next six to eight months—then I do not see why we should not be investing about that much about every year to keep on growing and growing,” he added.
Asked if the amount is P25 billion for the five-year plan, he said, “Yes, about that much, and if the sales and our growth are even higher, then we will push the envelope even more.”
Half of its P5-billion capital expenditure this year will be spent for developments in Luzon, outside Metro Manila. The balance will be spread across the country where it has developments.
“We think a provincial play is the way to grow,” Aboitiz said. The Cebu-based realtor last year accounted for 3 per-cent of AEV’s income stream. It earned P536 million, down 15 percent from P633 million in 2014.
“We are going for residential, commercial and industrial, these are all geared for expansion. But our focus remains on the residential developments, house and lot, because it remains to be a very big market and it is the most scal-able business,” Aboitiz noted.
“The big guys are already in the condominium business. We want horizontal development rather than vertical,” he said.