P2-B preferred shares sale 4X oversubscribed
PROPERTY developer Arthaland Corp. is programming P30 billion in capital spending between now and 2022 to fund its projects, mostly in the commercial office segment, as well as its land banking initiatives.
In a briefing after the listing of the company’s P2-billion preferred shares on Tuesday, Arthaland Treasurer Leonardo Arthur T. Po said they are allotting P30 billion for capital expenditure (capex) from 2016 to 2022.
Sherryl Verano, Arthaland vice president for strategic funding and investments, said capital spending will consist of P24 billion to P25 billion for the development of its residential and commercial office building projects—P20 billion of which will be allotted to its five projects in the pipeline—and P6 billion for the acquisition of land parcels.
The company said its recent P2-billion share sale will contribute to funding the P30 billion capex. The balance of P1 billion share sale will be offered within three years.
Arthaland offered 20 million preferred shares priced at P100 each. The offer was four times oversubscribed, showing strong demand for and confidence in Arthaland despite the volatile market, according to Ed Francisco, president of BDO Capital & Investment Corp.
BDO Capital was the lead underwriter of the P2-billion deal, which is part of Arthaland’s P3-billion share sale program under shelf registration.
Po said Arthaland’s six-year plan aims to raise their gross floor area to more than 520,000 square meters (sqm) compared to the current 110,000 sqms.
With five projects mostly in the commercial offices segment, Arthaland President and Chief Executive Officer Angela de Villa-Lacson said the company also expects to boost its recurring income from the commercial offices to 35 percent to 40 percent of the firm’s total income from 30 percent at present.
Villa-Lacson said the focus on building recurring income is to sustain the company “in case there’s any downturn in development incomes.”
The five projects are the 39-storey Cebu Exchange office tower in the Cebu IT Park; a campus-type residential project in Binan, Laguna; the 30-storey Arthaland-Century Pacific Tower in Bonifacio Global City (BGC); a 200-unit high rise residential condominium project in Makati central business district; and an office tower in the south of Metro Manila.
Arthaland has already secured land for the Cebu, Laguna and BGC projects, but is still in the process of securing land for the Makati and south of Metro Manila projects.
With Cebu being its first development outside of Luzon, Po said they will look at Iloilo as a market to expand to, and also any other regional locations that will present opportunities, depending on the infrastructure in place and the market growth pace of those areas.
Arthaland is engaged in the development of residential, commercial, leisure, and industrial projects.
PSE Chairman Jose Pardo lauded Arthaland during the listing ceremony of its P2 billion preferred shares, citing the company’s track record in building world-class and green property projects.
“The offering was well-received by qualified institutional investors as well the general public. The success of the offering further affirms ALCO’s (Arthaland) strong and enduring presence in the realty development industry,” Pardo said in his welcome remarks.