AYALA-led Cebu Holdings Inc. (CHI) closed 2014 with consolidated revenues of P2.3 billion, up by six percent, and a net income of P530.9 million, the highest ever for the company.
The company’s leasing business accounted 61 percent of its revenues.
CHI president Aniceto Bisnar Jr., disclosed that in 2014, the firm brought up leasing portfolio to over 187,000 square meters of retail and office space.
Sales of residential units also remained strong, prompting the firm to launch new developments.
With its parent company ALI, the firm launched 1,559 residential units last year. It sold 924 units worth P237.3 million, contributing 10 percent of the company’s revenue.
The firm has started to turn over units of AyalaLand Premier’s 1016 Residences, Alveo’s Sedona Parc and Avida Towers.
Bisnar also noted that one of the highlights last year was the firm’s successful maiden bond offering last year, which resulted in a P5 billion peso capital fund for projects and developments in the pipeline and landbanking activities.
Retail
The bond fund raising allowed them to forge business partnership in new locations and expand their portfolio across projects and developments.
CHI also reported a robust retail industry.
Last year, Ayala Center Cebu introduced premium brands and first-in-Cebu concepts in its latest expansion wing, which brought up the mall’s leasable area to 127,000 square meters. Currently, the mall now has over 500 merchants and is 95 percent leased out.
Meanwhile, its subsidiary Cebu Property Ventures Development Corp. (CPVDC), the developer of Cebu IT Park, closed 2014 with a 20 percent growth in revenues to P550.7 million with a net income of P150.2 million, up by 10 percent.
Bisnar attributed the growth to the higher leasing income from the eBloc Towers and its robust retail operations. The leasing income accounted for 60 percent of last year’s revenue.
CPVDC completed and started leasing out eBloc Tower 3 last year. To address the continuing demand for office space, the firm is currently constructing eBloc Tower 4, which is set to be completed by end of this year.
Further development
On the residential business, sales from Avida residential condominium contributed P32 million of six percent of the firm’s total revenue.
Bisnar said the firm is set to develop more components of the IT Park to serve its growing population through the redevelopment of a two-hectare block, which will bring in over 172,000 square meterse of gross floor area in the next three to five years.
Introduced last month, Bisnar said the firm, together with ALI, will invest around P8 billion for Central Bloc. The development will house two business process outsourcing (BPO) towers, a five-level Ayala mall and a 214-room Seda hotel.
Bisnar sees continued development for Cebu Business Park (CBP) and Cebu IT Park, saying that it will continue to play a vital role in Cebu’s economy.
Some 12 buildings are currently under construction in CBP while five buildings are under development in Cebu IT Park. These new structures will add almost 381,000 square meters of gross floor area.
In total, developments in both parks will reach over 1.4 million square meters, almost doubling its gross floor area within the next five years.
CBP and Cebu IT Park employs 68,997 workers. The annual growth rate of the population for the past five years was at 4.6 percent for CBP and 18.9 percent for Cebu IT Park.
With the current build-up, it is expected to grow by 20 percent this year. Bisnar said this will open more opportunities for support services and livelihood in the surrounding areas.
“Our company is in very good place and is positioned well for continued growth. Our brand is very strong, our financial position is healthy and we are able to balance the need for sustained earnings growth and long-term value creation.
Market share
“With our confidence in the growth of the Philippine economy, we will continue to leverage on the integrity of our brand and create synergy within our integrated, mixed-use, master-planned estates, with a balanced portfolio of residential, retail and office projects,” said Bisnar during the company’s annual stockholders’ meeting yesterday at the City Sports Club Cebu.
CHI maintains 23 percent market share in the residential vertical market and 17 percent share in the business process outsourcing office leasing market.
Looking forward, Bisnar said the company is investing P25 billion in the next five years for new developments and land acquisition.
ALI chief finance officer Enrique Manuel Jr. said that they are always on the lookout for more opportunities in land acquisitions and possible partnerships with other companies.
“We are currently looking at more properties within Cebu, the province and even in the region,” said Manuel, adding that they are already engaged in a couple of negotiations. “And if we find new properties, it’s always mixed-use townships.”
In the 27 years since Ayala’s entry to Cebu, ALI-led companies have invested more than P40 billion in real estate development in the province. ALI is also eyeing to hit a P40-billion income in 2020.
“CHI with ALI is committed to continue to influence the business landscape of Cebu, so the province will continue to attract more investors,” said Bisnar.
CHI was recently recognized with high distinction as among the five finalists at the third Philippine Stock Exchange Bell Awards, the highest accolade given locally to listed companies with “world-class corporate governance standards and practices.”