AYALA-led property developer Cebu Holdings Inc. (CHI) announced yesterday that it is planning to develop another business district in Cebu to cater to the growing demand for mixed-used development in the province.
CHI chairman Antonino Aquino said in a press conference they are confident Cebu can still host another business district as it has an economy “large enough for another city district development.”
Although there are no firm plans yet, Aquino, who is also the president of AyalaLand Inc. (ALI), said they are expecting to come up with details for the planned third business district this year, including possible local partnerships and location.
Negotiations
“While we continue to enhance the Cebu Park District, negotiations for acquisition are currently underway to increase our existing land bank. We also continue to look for strategic properties which will expand our portfolio, as well as complement our existing development,” said CHI president Francis Monera during the company’s Annual Stockholders’ Meeting at the City Sports Club Cebu.
Asked if they are considering the South Road Properties, Aquino said it is one area they are looking into but stressed they have not come up yet with specific locations for the expansion. Aquino said they will develop the new project the same way they did their existing business districts in major key cities in the country.
CHI is the developer of Cebu Business Park (CBP). Its subsidiary Cebu Property Ventures Development Corp. (CPVDC), on the other hand, is the developer of Cebu IT Park. These two business districts form Cebu Park District, Ayala’s biggest development outside Luzon.
Monera said ALI and its affiliates here will be investing P5.4 billion for new developments in Cebu this year. Of the figure, CHI will be spending an estimated P3.4 billion on new and existing projects and land acquisition.
Subsidiary CPVDC is also planning to construct a new commercial component on a five -hectare area at the Cebu IT Park where eOffice is located . The commercial component is set to enhance the “integrated, mixed-used experience” in the area.
“Master-planning is ongoing. We hope to firm up plans within the year,” said Monera.
The preparation for this new development, however, resulted in a “temporary dip” in rental income for CPVDC last year, according to Monera, as they encouraged locators to relocate to other buildings within the park. The eOffice contributed P29.5 million in revenues last year, lower than the P66.4 million it recorded in 2011.
On the residential front, Monera announced they are poised to launch at least two more high-rise towers this year as sequels to Alveo’s Solinea residences and Avida Towers Riala. He said plans are underway for a new residential project designed to cater to the underserved demand on affordable homes. So far, the Amaia brand is the only ALI brand not yet present in Cebu.
CHI ended 2012 with a “record-high” net income of P441 million.
Its revenues stood at P1.6 billion, a 13 percent increase from the previous year’s P1.35 billion. According to Monera, This is largely composed of leasing business at 58 percent and real estate sales of 22 percent.
Mall income
Ayala Center Cebu, which is the main source of revenue at CBP, contributed P750 million in total revenues. The company expects the mall’s income to go even higher in the next few years as the major expansion of the mall nears completion. The expansion is projected to add over 36,000 square meters of leasable space and some of the biggest international retail brands and local concepts.
Its subsidiary Cebu Leisure Company Inc. also contributed P150 million, up by 15 percent from 2011 due to the improved performance of the Active Zone and Food Choices as well as the higher occupancy in Ayala Cinemas.
Residential projects composed of land and condominium units, on the other hand, brought in a total of P189 million in revenues, which is 64 percent higher than 2011’s revenue at P115 million. In the last two years, the company has launched eight residential towers across three Ayala brands.
Meanwhile, CPVDC posted revenues of P242 million and a net income P132 million last year, lower than the figures in 2011 at P257.8 million in revenues.
But Monera said the planned commercial development at the Cebu IT Park is set to offset the losses incurred and will strengthen CPVDC’s leasing portfolio, with higher yields per square meter of floor area.
Aside from the growing number of companies at the IT Park, dining and retail operations at The Walk and the ground level of the eBloc Towers also contributed to total revenues of CPVDC. Monera also announced that the company recently acquired full ownership of Asian i-Office Properties, which owns and operates the eBloc Towers.
There are currently seven ongoing constructions by a number of locators at Cebu IT Park which will add another 132,000 sq.m. of floor area for office, commercial and residential purposes. Construction in the last two years, reach to almost 182,000 sq.m of gross floor area.