ArthaLand allots P20 B for expansion

MANILA, Philippines – Po family-led boutique property developer ArthaLand Corp. is pouring in P20 billion in the next five years to fund its projects, a ranking official said yesterday.

During the listing ceremony for the company’s P2-billion preferred shares, ArthaLand VP for strategic funding and investments Sheryll Verano said capital spending would increase to P30 billion with at least three more projects that have yet to be announced.

“The P30 billion includes approximately P6 billion for the acquisition of land, and about P24-to P25-billion for the development of projects,” Verano said.

ArthaLand’s ongoing projects, which will be covered by P20 billion in capital spending in the next five years, are Century Pacific Tower, an office project in Bonifacio Global City; the Cebu Exchange project, a grade A office building in Cebu; a project in Biñan Laguna,  a residential development in Makati and a commercial project south of Metro Manila.

The company successfully raised P2 billion from the sale of 20 million preferred shares at P100 per share.  This included an oversubscription option of 10 million preferred shares, which are redeemable in five years.

Ed Francisco, president of BDO Capital & Investment Corp., said the deal was four times oversubscribed, reflecting investor confidence in the Po family.

Preferred shares are cumulative, non-voting, non-participating, non-convertible and peso-denominated.

There are about 10 million shares left under the Securities and Exchange Commission’s shelf registration facility. These shares will also be offered  at P100 each.

With the share sale, ArthaLand director Christopher Po said “the company’s funding requirement is complete for the next three years.”

Leonardo Arthur Po, treasurer of ArthaLand, said the company expects its residential and office projects to grow to 520,000 square meters in gross floor area by 2022 from the existing 110,000 sqm.

Of the 520,000 sqm, about 50 percent would be in the office segment and the balance would be in upper middle to high end residential.

Po said the target is to grow the share of recurring income between 35 percent and 40 percent by 2022.

The company recently launched the Cebu Exchange project, a commercial development located within the Cebu IT Park in Barangay Lahug, Cebu City.

Ricardo Po, vice chairman of Arthaland said the project  has received strong interest from investors and end-users as well as from the company’s existing clients.

“The take-up of the Cebu Exchange is surprisingly robust,” Ricardo said, adding  the take-up is faster than the firm’s previous developments.

For the Biñan Laguna project, Arthaland subsidiary Cazneau will develop an 8.2-hectare campus-type residential community.  The project will feature a mix of low- rise residential and retail buildings as well as townhomes catering primarily to the student, faculty and other employees of the academic community in the area.

The Makati residential project, which will be a high residential condominium, will cater to the middle to upper segments of the market.

For the south of Metro Manila project, the company intends to acquire a property, which is approximately 3,000 sqm in size.

The remainder of the proceeds from the share sale would be used to refinance loans and general corporate purposes, the company said.

ArthaLand president Angela Villa-Lacson said the company would continue to be on the lookout for opportunities in the property sector and carefully study potential projects.

Leonardo said the company was also open to entering other property segments including shopping malls although there are no plans yet at present.