CPG prepares to go full gear

In just a few days, it will be another year, another fresh start.

This statement, however, holds a special meaning since 2020 has brought about so many challenges and difficulties to everyone. A new year brings new hope, and for 2021, this hope comes in the form of a vaccine for COVID-19.

As the economy is expected to bounce back with the promise of vaccines next year, prospects are starting to look up for a lot of companies, including those in the real estate sector.

This year was marked by delayed construction activities, especially during the enhanced community quarantine. Hopefully, next year, this sector will regain its momentum.

One company that will consciously, yet cautiously revive its project launches next year is the Century Properties Group (CPG). According to sources, CPG is preparing to create more destination developments very similar to its highly successful vertical village of residences, retail, medical, and office hubs at Century City, Makati.

The current one in Makati, covering 3.4 hectares, has all the essentials in one integrated environment, including residences, office, retail with F&B, and even a 27-story medical outpatient center. The latter has turned out to be a very good idea since people want health and medical services near their place of residence.

Having a medical outpatient center like Centuria Medical in an integrated city is good foresight on the part of CPG and its founding executive chairman, Jose E.B. Antonio, and this very timely addition to the live, work, play concept is one good differentiator.

It would be very exciting to see various Century Cities in and outside Metro Manila in the coming years, especially if they would have the same features.

This value proposition is probably one of the reasons why CPG is one of the listed companies in the property sector that has recovered almost fully from pre-COVID stock prices. The 34-year-old firm is finding its way back to its 2019 closing price of 55 centavos per share. It is, in fact, one of the undervalued stocks with a price-to-earnings ratio of only 3.7x based on its annualized 2019 NIAT. The company‘s current stock price of P0.475 is much lower than its book value per share calculated at P1.59.

The company had been ramping up its expansion efforts when the pandemic struck early this year, but it managed to stay on course with its affordable housing expansion. CPG’s  PHirst Park Homes brand launched two projects online this year in Nasugbu, Batangas and Magalang, Pampanga while building up recurring income assets. In fact, its new Century Diamond Tower at Century City Makati added 63,000 square meters of floor area.

Meanwhile, CPG reported relatively healthy condominium, as well as house and lot sales, at P9.6 billion in the first nine months of 2020 through digitalization initiatives, focusing on low-risk territories and bringing marketing and homebuying transactions mostly online.

CPG’s resilience amidst the crisis is not surprising as it has been strengthening its financial position over the years. From its solid performance in 2019, posting a 32.2 percent growth in net earnings at P1.48 billion, it recorded a P1.1-billion net income for the first nine months of 2020. The fruits of its expansion efforts to affordable housing and leasing have become more evident as contributions from these two income sources jumped 65 percent to P723 million compared to 38 percent in the same period of 2019.

The company’s total assets grew 1.5 percent to P54.2 billion as of September,  while total liabilities decreased by P1 billion to P32.8 billion mainly due to the redemption of maturing bonds and settlement of other short-term and long-term debt obligations. Current ratios improved due to reduced debt. It reported a higher cash position at 2.9 times compared to 1.8 times, while net debt to equity ratio improved to 0.7 times compared to 0.9 times during the same period last year.

It has also been reported that its gross profit margin improved to 37 percent as operating expenses dropped 23 percent largely due to streamlining of operating and selling expenses.

For the company’s in-city vertical developments, CPG is planning the completion of more than 2,000 condominium units by the second quarter of 2021. This will be in current multi-tower projects at The Residences at Commonwealth in Quezon City, the sixth tower of Acqua Private Residences in Mandaluyong, and The Residences at Azure North in San Fernando, Pampanga.

Officials also revealed that affordable housing launches through PHirst Park Homes will continue as in line with CPG’s five-year plan of rolling out 33,000 homes in 15 master-planned communities in the country. As of September, and only three years after it first entered the market, PHirst has launched 8,251 units in 97 hectares and sold 6,645 units with a sales value of P10.59 billion.

For its recurring income business, CPG has grown its assets to 137,000 square meters of gross floor area with mostly office spaces in its portfolio and retail at only eight percent of its total assets. Offices are still relatively resilient compared to other sectors.

While doing well in business, CPG has also done good work in helping its employees and the country during the pandemic. Aside from flexible working arrangements and providing IT, healthcare, and logistical support, CPG also adapted a three-stage testing protocol for its office employees and site-based personnel using rapid, antigen, and RT-PCR tests. The company has tested more than 5,000 employees, personnel, and construction workers. Its adherence to strict safety protocols and testing have kept cases at a minimum, company insiders tell me.

Most recently, CPG – together with 35 other private companies – signed a tripartite agreement with AstraZeneca and the government to procure and donate 2.6 million vaccines to Filipinos by the second half of 2021. In May, it also partnered with the Bases Conversion and Development Authority to increase the country’s COVID-19 testing capacity through the conversion of the Philippine Arena in Bulacan into a mega testing facility that conducts 1,500 swab tests a day.

Given its huge multiplier effect on the economy, a growth in real estate sector investments will trigger the development of other sectors that directly and indirectly depend on the property sector. The real sector has strong linkages with core sectors of the economy, including the financial sector. CPG’s success moving forward will benefit a lot of people and the economy in general.

Let us all hope that 2021 will be a much better year for all of us.

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