Eton sees recurring income from lease operations to rise 30%

MANILA, Philippines - Eton Properties Philippines Inc. expects recurring income from lease operations to rise 30 percent in the next five years as it ramps up construction of office buildings catering to the business process outsourcing (BPO) sector.

During the company’s annual stockholders’ meeting yesterday, Eton officer-in-charge Michael G. Tan said the company would add some 80,000 square meters of leasable space by the end of 2013, bringing its total GLA to 130,000 sqm.

Tan said the company’s two new buildings at Eton Centris, a mixed-use complex located at the corner of Edsa and Quezon Ave., are now fully leased to some of the country’s top corporations and BPO firms.

He said construction of the firm’s 1,000-hectare Eton City in Sta. Rosa and Cabuyao, Laguna, is in full swing.

The group remains optimistic about the residential market given a robust domestic economy, coupled with a low interest rate environment.

“We are very optimistic about the Philippines’ strong economic fundamentals.  OUr main drivers continue to be the strong flow of remittances from OFWs and the fast rising demand in BPO office spaces from outsourcing companies abroad.  Being part of the Lucio Tan Group, Eton has access to the group’s huge landbank, an advantage in launching new projects,” Tan said.

Tan said the company is in the middle of several concept studies for new projects in Makati and Quezon City.

Eton disclosed early this week it was voluntarily delisting its shares from the Philippine Stock Exchange due to its inability to comply with the 10-percent minimum public ownership requirement within the allowed grace period.

Non-compliant companies were given until the end of the year to boost their public float to 10 percent.  Failure to do so would result in suspension of trading for up to six months beginning the first trading day next year.

Tan said having its shares removed from the roster of stocks being traded on the exchange was the best option at this time, but reiterated that the company would relist in two to three years.

The company’s public ownership level currently stands at around three percent.

Tan said the firm would make a tender offer for the shares held by the public in preparation for the delisting of its shares.

Eton, the local property development arm of tycoon Lucio Tan, is now 98.1 percent owned by the LT Group Inc. (formerly Tanduay Holdings Inc.).

Based on financial statements filed with the PSE, Eton reported a net income of P31 million in the first half of the year, down from the same period in 2011 as revenues declined by 60 percent due to non-recognition of sales of projects that have yet to commence construction.