Property firm sees demand for low-cost housing staying strong
MANILA, Philippines–Real estate developer Profriends Group Inc., which is applying for a P7.7-billion initial public offering, sees strong demand for socialized, economic and low-cost housing.
Guillermo Choa, Profriends founder and chief executive officer, said in a briefing Thursday that the real estate company was likewise building its portfolio of commercial and office space for rent, a strategy seen to grow recurring earnings in the future.
Profriends, which sells residential units priced at between P800,000 and P3 million per unit, said demand would be sustained from first-time home-buyers such as young upwardly mobile professionals, people currently renting space in inner city, provincial-based buyers and overseas Filipino workers.
Citing a research from the University of Asia and the Pacific, he noted that the 2.9 million backlog in socialized, economic and low-cost income segment of the market would rise to 6.5 million by 2030.
Choa said the company’s vision was to replicate its live-work-play-worship township model currently exemplified by flagship project, Lancaster new City in Cavite, to new locations.
Located within Lancaster is Suntech iPark, a pioneering information technology park in Cavite, which is targeting to host 17,000 business process outsourcing (BPO) seats.
“We have the first 400 seats and we’re putting up the next 1,000 seats by next year,” Choa said.
In its developments, Profriends seeks to improve yields over time by keeping commercial space that can be lent out.
Since it started operations in 1999, Profriends has sold more than 36,000 houses in Cavite and Iloilo. It posted an average net income margin and net income growth of 31 percent and 27 percent, respectively, in the past three years.
“The business model is really targeting the bottom of the pyramid, the underserved segment of the market,” said Roberto Juanchito Dispo, president of First Metro Investment Corp.
Profriends has tapped FMIC and BDO Capital and Investment Corp. as joint issue managers, lead underwriters and bookrunners for its planned offering of 385.75 million shares. The application to register securities has been filed at the Securities and Exchange Commission.–Doris C. Dumlao
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