Ortigas & Co posts 13% hike in 2010 revenues

MANILA, Philippines -  Ortigas & Co. expects revenues to grow five-hold in 10 years as it plans to significantly expand its presence in urban mixed-use development projects.

The company posted a 13 percent increase in revenues from P1.67 billion in 2009 to P1.89 billion last year, excluding the P1.4 billion sales in the Circulo Verde community.

Meanwhile, Ortigas & Co.’s real estate division, which accounts for 80 percent of the company’s business, expects revenues this year to grow by 66 percent from P1.4 billion last year and the bottom line to improve by as much.

Company senior vice president and real estate division general manager Joey Santos said at the sidelines of yesterday’s launch of the fourth Circulo Verde project tower called Lleida that the 66-percent growth in sales is mainly due to new developments in Circulo Verde located in Quezon City such as the just launched Garden Homes and Lleida Tower.

For 2011, the real estate division has allocated a capital expenditure budget of P3 billion, to be spent for Circulo Verde, two additional business process outsourcing (BPO) buildings in Frontera Verde which is another mixed-use development of the group and where Tiendesitas is located, and the site clearing for the Capitol Commons project in Pasig, also a mixed-use development that will rise in what used to be the house of the Rizal provincial capitol.

In 2010, the division’s revenues grew by 179 percent compared with 2009, the highest growth rate in the division’s history, with the bottom line experiencing the same growth rate, largely due to the sales of three Circulo Verde towers, namely Majorca, Ibiza, and Seville.

Ortigas & Co. has allotted P15 billion for the development of the 12-hectare Circulo Verde over the next 15 years. Of the 12 hectares, 70 percent is dedicated to open spaces and parks, Santos emphasized.

Majorca, which was launched in April 2009, is already sold out while the second tower Ibiza, launched at the same time, is 82 percent sold. The third tower Seville, launched May last year, is 80 percent sold. Majorca and Ibiza are scheduled for turnover next year, and Seville by 2014. “As for the 11 other towers of Circulo Verde, we intend to launch one tower every year,” Santos said.

The shopping center division experienced a six percent growth in topline and bottom line in 2010 compared with 2009.

Ortigas & Co. has recently transformed itself from a limited partnership to a corporation with the creation of OCLP Holdings Inc., although according to Santos, the assets have not yet been transferred.

OCLP Holdings is looking at offering a minimum of 10 percent of its shares to the public, although Santos said they have not determined when.

At present, he said that they finance their projects from internally generated funds, pre-selling of the units, and some debts.

Greenhills Shopping Center has embarked on a 20-year full multi-phase redevelopment plan at a budget of P30 billion.

OCLP is spending around P100 billion in the next 10 to 15 years. Of the total amount, about P30 billion will be spent for the redevelopment of Greenhills Shopping Center, P25 billion for Capitol Commons, P30 billion for the redevelopment Frontera Verde along C5 in Pasig, and more than P15 billion for Circulo Verde.

Phase I of GSC’s redevelopment, which will cost between P5 to P6 billion, involves demolishing the present Gloria Maris, transferring it to a new location within the complex by next year, demolishing Unimart, building a new Unimart at the site where the old Gloria Maris was, and then adding shopping areas at the old Unimart. The cost for the additional shopping building, which will increase shopping stalls from 2,000 to 4,000, will be around P3 billion while the new building for Unimart and relocation of Gloria Maris will cost P2 billion and P500 million respectively.

The next phase will include putting up three residential towers and one office cum hotel building as well as adding more shopping space. The old Manila Bank arcade area and that of Greenlanes will be torn down.

Santos said the existing tiangge area will remain while V Mall will be torn down and a new building will be put up.

OCLP officials said the redevelopment will be done in phases so as not to disrupt the conduct of business at the shopping center.

Also yesterday, Santos revealed that they are now doing preliminary development work for Capitol Commons. The project will cost more than P25 billion. Aside from the residential component, the first two floors of one of the buildings will be dedicated to a mall while the succeeding three to four floors will be for office units, most likely BPOs. It will also have its own shopping mall.

Santos said that plans to partner with Ayala Land for Capitol Commons will no longer push through. “We realized we wanted to do it alone. After all, we waited 50 years to cover the property,” he pointed out.

Also in the pipeline is the development of the 18.5-hectare Frontera Verde. Santos said that plans to demolish Tiendesitas, its anchor locator, which was originally planned as an interim project, will no longer push through. “We are thinking of just upgrading it, which will cost us around P500 million,” he revealed.

The new Frontera Verde will probably cost around P30 billion. Frontera Verde currently has two call center buildings with a total of 25,000 square meters floor area and costing P1 billion to build.

He said two of the additional buildings, costing a total of P2 billion, will hopefully break ground second quarter of this year, and another by next year.

OCLP also hopes to recover 34 hectares of property inside Camps Crame and Aguinaldo which could revert to it if the military and the police stop using them as headquarters.

It is also discussing a possible compromise agreement with the PCGG for the Payanig property in Pasig.

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