Property developer Sta. Lucia Land Inc. (SLI) is doubling its capital spending to P4 billion for 2016, from its P2-billion capital expenditure (capex) for 2015, as the company is in a land-acquisition mode.
Chief Finance Officer and Executive Vice President David dela Cruz said SLI is in the process of acquiring parcels of land in various places across the country.
“We have been in joint ventures; we’ve always been developing other people’s lots,” dela Cruz explained. “Now, we want to start developing our own lots. We need to acquire. We’re shooting for P2 billion to P3.5 billion [capex]. Or maybe P3 billion to P4 billion.”
The SLI CFO said the target 2016 capex is higher than the actual spending of close to P2 billion this year, which was spent only for developing lots under joint ventures.
Dela Cruz said the SLI is eyeing land parcels adjacent to their current developments, to give way to more residential and commercial centers that would serve the communities that SLI had also created.
“We have conscious effort to expand our land bank. Competitors are starting to go to the provinces, where we are. So we need to strengthen our projects,” he said.
For their usual subdivision projects, dela Cruz said the standard lot size range from 80 to 100 hectares, or 20 to 40 hectares for smaller communities.
In terms of units, he said the company has built 85 to 90 percent horizontal housing projects, while the rest are vertical condominiums and commercial malls.
He also noted that 90 to 95 percent of their buyers are end-users, who are overseas Filipinos who want to have properties back home.
Dela Cruz said the company’s strategy is either building houses for the lots they had sold before through its unit Sta. Lucia Homes Inc., or selling lots for subdivision. Offering a house and lot package is not yet in the company’s near term plans, according to him.
“Our buyer profile is more on the lots only,” dela Cruz said. “The products that we sell, in value, are a little lower than others. We sell a piece of lot [priced]only [at]P800,000 compared with a house-and-lot that is valued at P5 million and above.”
Dela Cruz said such strategy makes SLI immune to shocks or negative impacts in case the central bank decides to raise interest rates.
Earlier, SLI said it was working on a P2.877-billion worth of land acquisitions, consisting of up to 223 hectares of additional land bank for future projects.
The target lands are in Quezon City (40 hectares), Rizal (18.1 hectares), Batangas (98 hectares), Laguna (10.7 hectares), Iloilo (33.2 hectares), and Davao (23 hectares).
To fund next year’s capex, SLI is looking at raising P2 billion to P3 billion in the second half of 2016.
This will be on top of the P4 billion the property firm raised from a recent bond issue, which was mainly to finance maturing bank loans.
Incorporated in 1996 and formerly a mining company, Sta. Lucia is engaged in real estate development mainly of horizontal and vertical residential projects, as well as commercial malls.
SLI has two subsidiaries—Sta. Lucia Homes Inc. and Santalucia Ventures Inc.—which are both engaged in the construction, development, and management of residential structures for lot buyers.