DMCI Homes, the real estate arm of the Consunji-led conglomerate DMCI Holdings Inc., is targeting 10 percent yearly growth in revenues and intends to expand outside Metro Manila.
“We want to grow our [real estate]business 10 percent a year. Last year, we [grew revenues]about P20 billion. So we want to grow [revenues to]P22 billion this year, and hopefully P24 billion to P25 billion next year,” DMCI Holdings President Isidro Consunji told reporters over the weekend.
Consunji said the Metro Manila-centric company will “experiment outside Metro Manila.” It is now in talks on property developments in Baguio, Davao, Bataan, Naga and Dagupan.
“We’re starting now. We’re talking to people,” Consunji said, noting that the projects in the provinces are going to be a mix of subdivisions as well as high- and medium- rise condominiums.
The company has a 50-hectare land bank in Taguig City and 20 hectares more to be developed in Metro Manila.
Asked if the company is going into township development, the DMCI chief said “it is hard to find a big chunk of saleable land in Metro Manila.”
The DMCI president said the income prospects from property sales are better. “We have not tried BPOs and malls—the recurring incomes. One of the reasons is that the yield from selling property is higher than the yield from recurring income.
“So if we enter in development of recurring income, our return on equity (ROE) will fall. The ROE is perpetual, so if you sell the land, tomorrow you don’t have something to sell, so it’s a dilemma,” Consunji said.
Should the business in the provinces prove successful, the company is looking at a revenue mix of 10 percent from outside Metro Manila.