Empire East Land Holdings Inc., a subsidiary of Megaworld Corp., has allotted P4 billion to P5 billion to capital expenditures for this year.
“To keep to our schedule of delivering quality properties to homebuyers and investors, we expect to spend about P4 billion to P5 billion for construction and development work in 2016,” Empire East president Anthony Charlemagne Yu told shareholders during the firm’s annual stockholder’s meeting on Tuesday.
At the sidelines of the same event, Yu told reporters a chunk or P3 billion to P4 billion of the capex will spend on construction.
“P1 billion to P1.5 billion maybe for acquisition or joint venture. So at least P3B to P4B for construction,” Yu said.
Yu the company isn’t keen on borrowing money.
“For our capex, it’s internally-generated fund. And the banks have been offering very good rates, but we tend to be very conservative. So we don’t see a problem as far as that is concerned because funds are readily available. The economy is very liquid. The interest rate is so low. It is something that is in the possibility,” Yu expressed.
Yu noted the company raked in P13.88 billion of reservation sales in 2015.
“Every month, it’s more than P1 billion [of reservation sales]. Sometimes it’s P1.7, P1.8. Every month it’s more than P1 billion, which is very healthy,” Yu told reporters “We sold about P13 billion last year, we hope to be able to exceed that number.”
Yu noted the demand for housing drives the market.
“I think the sentiment is still very positive. There is a real need for housing units in the Philippines, particularly for the end-user market. The economy is very liquid. What’s important . . . where do you park your funds? Real estate is a very good investment . . . All these help in sustaining the growth in the real estate,” Yu said.
Acquisition and expansion
Empire East has P2.9 billion worth landbank equivalent to 404 hectares.
Yu said plans are afoot to expand beyond Metro Manila.
“We are actively looking for properties outside,” Yu said
“We believe that there is a very strong corridor in t he north, and in the Visayas, it has also become very strong as well. Our mother company is there, and they’ve been experiencing the boom in the Visayas,” Yu noted.
Asked if the company plans to launch projects outside of Metro Manila this year, Yu emphasized it would depend on how the negotiations go.
“We are still in discussion with landowners regarding possible property acquisitions or joint venture… If we are able to successfully make a deal there, then maybe we would be able to launch maybe this year, next year. A lot depends on the discussions that are ongoing,” Yu said.
Last year, Empire East reported it was in the planning stages of two mixed-use developments, the 23-hectare Empire East City in Ortigas and in the 1.7 hectare property in Quezon City where Broadway Centrum is located.
“Right now, we are refining the masterplan. And once that is done, we will start executing it,” Yu said.
“There are plans with office. There are plans without office. But the commercial and residential are sure. The offices, we will have to check whether they will be part of the master planning,” Yu said.
Plans are being tweaked for the Broadway Centrum property.
“The plans have firmed up, but right now we are looking at a number of factors. We are looking at the traffic situation there. We are tweaking the plans in order to ensure whatever is in there that we will put up will not further congest the area,” Yu said.
Yu noted the project launch will depend on the completion of the masterplan.
“A lot depends on the planning. If we are able to finish everything, it’s a possibility. That will be a mixed-use as well, commercial and residential,” Yu said.