Eton Properties Inc., the property development arm of business tycoon Lucio Tan, sets its sights on the office market and plans to spend P9 billion on the construction of four business process outsourcing (BPO) buildings.
In a media briefing on Tuesday, Eton Properties Deputy Chief Operating Officer Josefino Lucas told reporters the firm is expanding its office space footprint, with the launch of four office projects this year, on the back of the strong demand from the BPO market.
“We have acquired last year, additional properties for offices. So we have four BPO buildings in the pipeline. One is already for construction and three are in various stages of plans and preparations. We hope we can begin construction before year end,” Lucas said.
Eton said it has already started with the construction of the 25-storey Centris Cyberpod Five building earlier this year. The new development is the firm’s fifth BPO facility in Eton Centris in Quezon City.
Other BPO projects in the pipeline are the 4-storey eWestPod in Makati City; Sunrise Ortigas, a high-rise BPO building along Meralco Avenue in Pasig City; and Emerald Ruby Project, a 33-storey BPO building in Ortigas Center.
“By the next five years the total [gross leasable area]will increase by an additional 200,000 square meter so it will bring it to around 315,000 by the year 2020. But it will progressively increase in between as the other BPOs are completed,” Eton Properties Chief Finance Office Wilfredo Pineda said.
The BPO-driven demand for office spaces catapulted Eton Properties’ net income for 2015 by 161 percent to P313.25 million from P119.86 million the previous year.
Annual gross revenue inched up by 9 percent to P2.48 billion from P2.28 billion in the same comparable period, while rental revenues rose by 58 percent to P1.17 billion from P740 million.
“We were able to take advantage of opportunities for greater growth in 2015 as we implemented our long-term strategy,” Eton President Lucio Tan Jr. said.” We are confident that we can expand our footprint in the next five years to further optimize our gains. With economic prospects remaining bright, and with demand for business space still strong from BPOs, we will continue to build and expand our market. Our goal is to not just to expand Eton Properties’ footprint, but to make it more visible and more entrenched in the markets we can truly count.”
The company is also looking at diversifying its property portfolio by entering the hospitality, leisure and mixed-use markets.
Lucas said the firm is looking to develop a recently acquired 35-hectare property in Mactan.
“For the moment, we are looking at Mactan, Cebu. We are looking at developing a 35-hectare land for hospitality and leisure,” Lucas said.
Eton Properties will also make its first foray into the serviced residences business, with the Mini Suites project in Makati, which is to open its doors this year. The project will offer 500 residential units, 368 serviced apartments and 280 small office/home office (SOHO) units.
For 2016, Eton Properties is looking at a capital expenditure of P7 billion, double the P3.4-billion capex last year.
“For 2016, we’re looking at around P7 billion for capex, twice of what we have spent in 2015. But towards the next 5 years, we’re looking at around P30 billion. But that doesn’t take into account the other capex requirements when we finalize master planning for the Cebu property,” Pineda said.