Eton to spend P10B over 2 yrs to expand resd’l, office portfolio

MANILA, Philippines - The real estate unit of tycoon Lucio Tan is spending P10 billion in the next two years to beef up its residential and recurring income portfolio amid growing demand for business process outsourcing (BPO) office space.

Eton Properties Philippines Inc. is focusing on the recurring income base in the next few years to unlock the value of its prime properties, an official said yesterday.

“Over the immediate horizon, Eton Properties is aggressively pursuing recurring income streams from additional commercial developments, through rental of more office and retail spaces, and on a selective basis the lease of residential units in certain projects,” Eton Properties officer-in-charge Joseph Chua said during the company’s annual stockholders meeting.

“The company continues to ride on the robust growth of the BOP sector, through the development of more office buildings in strategic locations,” Chua said.

For instance, Eton Properties is formulating a new master plan for the Eton City in Laguna and Eton Centris in Quezon City, with commercial development placed at the forefront of the development.

Chua said the property firm set aside P10 billion for its capital spending this year and the next.

“Instead of focusing on one-shot deals where you sell the property, we will focus on recurring income. We are going to focus on the office space because the BPO industry is strong,” Chua said.

Eton Properties is putting up six BPO office towers in the 12-hectare Eton Centris in Quezon City.

This would allow the property firm to boost the contribution of recurring income portfolio to 40 percent of total revenues by 2016 or 2017 from 28 percent this year and 12 percent in 2013, Chua said.

To date, Eton Properties provides BPO office space through three towers in Eton Cyberpod Centris and three buildings in Eton Cyberpod Corinthian. Rental revenues of Eton Properties climbed 11 percent to P448.72 million last year from P405.76 million a year ago.

Eton Properties is also planning to put up a leisure hotel in Eton Centris, a serviced apartment in Eton Tower Makati and another BPO building in Eton City.

For the residential segment, the company plans to re-launch several projects like First Homes in Makati, Chua said. Eton Properties operates three major brands: Eton for the high-end segment, Belton for the middle-income market and First Homes for economic housing.

Given delays in construction and project launches, the real estate firm reported a net income of P29 million in the first quarter, way down from the P109 million posted a year ago.

“Residential revenues were lower partly because the construction of One Centris Place and First Homes Makati were put on hold to give way to design improvements and enhancements,” Eton Properties said.