THE property-development arm of the Gokongwei family said its capital expenditures (capex) will be flat in its 2015 fiscal year, plowing more funds for its shopping malls and increasing its office-leasing spaces.
Frederick Go, Robinsons Land Corp. (RLC) president, said the company is spending P15 billion to P17 billion in capital expenditure for its fiscal year ending September 2015. The capex was flat from this year’s spending.
The capex will be funded by internally generated funds, as well as fixed term and fixed rate instruments that may include bonds, notes or bank loans.
Most of the spending, however, will be for shopping centers, offices and partly on tourism but not so much for residential projects.
“Residential is always there but we always respond to market conditions so if market conditions are good the demand in there, then we’ll continue to build residential,” Go said at the sidelines of the company’s 25th listing anniversary celebration. RLC is experiencing flat-sales growth of its residential segment since its fiscal year 2013 at 17 percent to 18 percent and 14-percent growth in 2011 and 2012.
He said earnings and revenue this year should be consistent with the firm’s performance in the first nine months ending in June this year.
Go said he does not see any reason it should go too far from the 6.4-percent profit growth reported for the first fiscal nine months.
The bulk of the capex will be for the construction of more malls to expand its leasing space by 11 percent while the rest will go to hotels, office buildings and some for residential projects.
RLC derives 85 percent of its earnings from its recurring income portfolio.
The company will be opening a mall in Las Piñas next week and open Robinsons Galleria Cebu and Robinsons Place Antique next year.
RLC will also expand its existing malls in Ilocos Norte and Novaliches.
Robinsons Galleria Cebu will have 76,000 square meters of gross leasable area and will be the firm’s third in the city. It will also include its second Summit Hotel which will have 220 rooms.
RLC will also be open its Amisa Hotel in Mactan while starting the construction of the first of 10 office towers in its Bridgetown property in Pasig.
“[RLC’s] revenues are more stable than traditional property firms because more than half of its overall revenues come from rental income from its malls and its office buildings,” broker Regina Capital Development Corp. said in its recent comment.