Century Properties allots P2 billion for capital expenditure

MANILA, Philippines - Century Properties is spending around P2 billion this year for its capital expenditure as the company expands its focus to include the middle income market for housing.

“Most of this will be internally generated.” We have the lowest leverage in the industry at 10 percent,” managing director and chief operations officer John Victor Antonio told The STAR.

He said they have created a new subsidiary, Century Limitless Inc., to focus on the middle market for residential space, particularly condominium units costing P3 million and below.

Century Limitless’ first project is Azure, an urban resort type of condominium project, to be built beside SM Taguig. Azure will have nine buildings of 700 units per building and 19 storeys per building.

Azure, which is targeting the below P2.5-million market, had its soft launch last Jan. 1, 2010 and already, 75 percent of the units in the first building is sold out.

This will be the first time Century Properties, known for its high-end projects, has tied up with state housing fund Pag-IBIG, to provide financing for prospective buyers. Pag-IBIG offers a P3-billion ceiling for housing loans to its members.

Antonio revealed that the project cost for Azure is at P1.3 billion for each of the nine buildings or a total of P9.7 billion. Including other costs, total investments for Azure will amount to P10.3 billion.

Century’s first foray into the middle-income market is expected to generate revenues of P14.2 billion over a seven-year period.

Antonio explained that other residential projects will continue to be under the parent company while future middle-income market projects will now be under Century Limitless.

He also told The STAR that Century Limitless is looking at three other projects in Metro Manila, one of which will be near Rockwell. One of the three will be launched this year.

Meanwhile, the Century City project in Fort Bonifacio is being developed by Century City Development Corp., also a subsidiary of Century Properties.

Antonio said the capex for the 68-storey Gramercy, one of the two residential towers of Century City, is at P4 billion, of which P2 billion has already been spent. This year, around P500 million will be spent for Gramercy, which is scheduled for turnover on 2012.

The other residential tower at Century City, Knightsbridge, is expected to be turnover to unit owners by 2013. Knightsbridge’ total capex is at P3.5 billion, of which P600 million will be spent this year.

Antonio revealed that 80 percent of Knightsbridge is already sold, and nearly 100 percent of Gramercy.

Century City will also have a mall. However, its office building component may have to wait until 2012 when the office market recovers. “The reality is the market for office space is not so good at the moment. There is a glut and developers have overbuilt. We expect the office market to recover by 2012,” he added.

While around 80 percent of the buyers of Gramercy are from the overseas Filipino market, Antonio revealed that they expect the buyers for Azure to be equally divided between OFWs and local ones. “We prefer the local ones because they are users of the unit and not purely for investment purposes,” he said.

Century Properties, chaired by Ambassador Jose Antonio, is said to be the largest private company in terms of sales.

Ambassador Antonio told The STAR yesterday that they have been so focused on the high-end market that only lately did they realize the tremendous potentials being offered by the middle-income but very discerning home buyers.

He said that of the total membership of Pag-IBIG, only a small percentage have availed of their housing loan benefits. “This presents a big potential for us,” he emphasized. – With Zinnia dela Peña