Cityland sees higher profit this year with new project onstream

Listed property firm Cityland Development Corp. said the 32-story commercial and residential condominium project it started last year is expected to bring profits for the company this year.

In a disclosure to the Philippine Stock Exchange, Cityland said the construction and development of the Cityland Makati Executive Tower located at 7652 Dela Rosa Street, Barangay Pio del Pilar in Makati City, is ongoing.

Cityland said it has spent P47.94 million for the project from January to June this year. Part of the money came from proceeds of the initial public offering of its subsidiary City and Land Developers Inc. in December 1999.

The project features bachelor pads, studio units, one-, two-, and three-bedroom suites that are available in cash or installment terms of up to 10 years.

It also has amenities like swimming pool, sauna, spa, gym, children’s playground, roofdeck jogging area and function room, among others.

Cityland, formerly Statehouse Land Development Corp., was incorporated on Jan. 31, 1978. Its primary purpose is to acquire and develop suitable land sites for residential, office, commercial, institutional and industrial uses.

Listed on the stock exchange in 1983, it has since emerged as one of the country’s leading condominium developers.

Its projects include medium to high-rise offices, commercial and residential condominiums in Makati and Mandaluyong, affordable houses in Pasig City and residential subdivisions and farm lots in Bulacan and Cavite.

Cityland is seeking the approval of the Securities and Exchange Commission (SEC) to issue P1.5 billion worth of short-term commercial papers (STCPs) to pay off maturing obligations and finance the development of a condominium project in Manila.

This marks the company’s first issuance of STCPs under the Securities Regulation Code.

In its registration statement filed with the SEC, Cityland said the STCPs will be issued to the general public and institutional buyers. The IOUs will be issued in three tranches with P800 million to be released in the first tranche, and P450 million each for the second and third tranches.

Cityland said the bulk or P1.2 billion of the proceeds will be used to cover maturing loans. Another P250 million will be used to finance the completion of Cityland Vito Cruz Towers 1 and 2 while the remaining P50 million will be used to finance operating expenses.

The STCPs will be secured by a committed credit line to be issued by a reputable universal or commercial bank to the extent of 20 percent of the STCPs approved by the SEC.

Should it obtain less than the maximum proceeds, the company will just opt to renew all the maturing obligations from the existing financial institutions that extended loans or tap existing lines with the banks.

Amid a weak economic environment, Cityland reported a 35 percent growth in its net income last year from P127.43 million to P172.42 million. Revenues amounted to P467.34 million or 20.17 percent higher than the P388.89 million registered in 2001. Sales of Vito Cruz Tower I contributed 48.53 percent to annual sales in 2002 and its completion rate reached 22 percent.