Aboitiz property unit seen as major contributor to group income

MANILA, Philippines - Property firm AboitizLand Inc. is stepping up as a major income contributor to the Aboitiz conglomerate as it launches more projects on its own or through joint ventures.

Its partnership with property giant Ayala Land Inc. (ALI) will kick off with a new mixed-use development next month, a top company executive said.

“My mandate is to make it a major contributor to the group,” Andoni F. Aboitiz, president and CEO of AboitizLand, said in a briefing.

In the first quarter, AboitizLand contributed P43.1 million to Aboitiz Equity Ventures’ income as the property firm’s revenues hit P258 million. AEV’s consolidated net income hit P6.8 billion in the first three months, up 17 percent from a year ago.

The Cebu-based property firm will launch three new projects and continue working on five existing projects this year, Aboitiz said. AboitizLand committed to spend more than P1 billion this year for the various projects.

For its joint venture with ALI, Aboitiz said the partners are already in the closing stages for a project that will be announced next month.

“Most likely we will be looking at mixed-use developments, which encompasses condominium, retail and possibly business process outsourcing buildings,” Aboitiz said.

In April, ALI and AboitizLand signed an agreement for a 50-50 joint venture for the development of properties in Cebu.

It is not the first partnership between the Aboitiz and Ayala conglomerates. Holding firms Ayala Corp. and AEV, recently joined forces for the bidding of the P17.5-billion Mactan-Cebu International Airport under the government’s Public Private Partnership (PPP) program.

Aboitiz said the partnership is project-based, with AboitizLand already having identified several properties that can be developed moving forward.

“For now, we are Cebu based but we are looking at expanding outside Cebu,” he said.

Last year, AEV purchased 100 percent of AboitizLand from Aboitiz & Co. for P3.2 billion.

“AboitizLand has an inventory of existing and potential projects, as well as access to a landbank that will ensure the continuity of development projects. It also has strong recurring income from its industrial estates,” AEV said.

In 2012, AboitizLand posted record residential sales of P1.3 billion, up more than 50 percent from a year ago.

In its 20-year history, AboitizLand has been in the industrial segment as the company behind the Mactan Economic Zone II in Lapu-lapu City and the West Cebu Industrial Park.

In the commercial segment, AboitizLand has put up IMEZ, a modern multi-use facility and self-sufficient commercial hub suitable for business process outsourcing and retail stores; The Persimon Plus, a commercial area that offers dining, retail and entertainment concepts; and Pueblo Verde, a clustered town center with dining, retail, service facilities and modern office space.

In the fourth quarter this year, AboitizLand will launch The Outlets at Pueblo Verde, the first outlet mall to rise in Visayas-Mindanao.