AboitizLand Inc., the property vehicle of the Aboitiz Group, is setting aside P4 billion to P5 billion for five residential projects in the pipeline for next year in a bid to expand the company’s portfolio in the “steady” residential housing space.
“We’re going to launch five residential projects in Batangas, Tarlac, Cabanatuan, and two in Cebu next year… [We’re budgeting] about P4 to 5 billion,” Andoni Aboitiz, Aboitiz Land president and chief executive officer, told reporters in a recent press briefing.
He said these projects would take about two to three years to complete.
Earlier, the Aboitiz Land parent Aboitiz Equity Ventures Inc. (AEV) said the group is actively looking for properties in the provinces for its future residential projects.
“We feel that’s where the growth in the property business will be. And we’re targeting house and lots in provincial cities rather than compete head on with big guys of Metro Manila,” Aboitiz said.
The Aboitiz Land president said the horizontal housing projects would be in the mid-income segment, priced at P2 million to P3 million per unit.
The firm is focusing on the residential segment, which is set to surpass its current industrial estate, offices, and malls portfolio moving forward, Aboitiz said.
“I think the residential will be much larger and larger. Industrial, we’re playing a very modest game there because we also don’t think it will be an enormous business. The residential part is really a GDP [gross domestic product]play, while the industrial is core direct investments,” Aboitiz said.
“Right now, any real estate company will target at least a 50-50 mix. The residential projects have higher margins but they’re more risky. While the recurring malls or industrial segments have lower margins but they’re steady. We’re targeting 50-50 probably in 10 years or so,” he added.
At present, bulk of Aboitiz Land’s portfolio is in the industrial estates, while having few projects in residential housing and malls with office components.
Aboitiz Land is actively scouting for land parcels to acquire in the provinces —at least 20 hectares in size each for the residential projects and about 500 hectares for industrial estate developments. To date, the firm has 250 hectares of developable land.
Aboitiz Land is the property vehicle of AEV, contributing only 1 percent to total group sales.
Its existing projects include 469-hectare LiMa Technology Center, 268-hectare West Cebu Industrial Park, and 63-hectare Mactan Economic Zone 2 for industrial estate developments; Outlets at Pablo Verde for malls with office component in partnership with Ayala Land Inc.; housing brands which are Persimmon Studios, Priveya Hills, Pristina North, Amoa, Almiya, Ajoya, North Town Woods and Homes, Kishanta Zen Residences, Mahogany Grove, Briza, and Molave Highlands.