Empire East remains keen on partnership with Okada

Japanese gaming giant Kazuo Okada has lost the group of taipan John Gokongwei as an ally in his upcoming Philippine gaming hub but not tycoon Andrew Tan, whose residential arm Empire East Land Holdings Inc. (ELI) is keen on pursuing the upscale residential component of the $2-billion entertainment complex.

During its stockholders’ meeting Wednesday, ELI president Charlemagne Yu said there were discussions with the Okada group but ELI was waiting for the Japanese group to commit to the residential project independent of the gaming component.

Asked after the stockholders’ meeting whether talks have expanded to include ELI’s potential ownership of land where the casino and other components of the project would rise, Yu said: “Talks are very preliminary. (They are) really expressions of interest for a joint undertaking in the residential development.”

Yu said ELI was closely watching the development on Okada’s project.

Based on an announcement in July last year, the plan was to jointly build a P45-billion upscale residential condominium complex in Entertainment City Manila, comprising more than 25 residential towers. This announcement was eclipsed when the Gokongwei group, through Robinsons Land Corp., announced a separate agreement with Okada involving all other components of the project.

The RLC-Okada partnership, however, recently fizzled out. No explanation was given for the failed talks.

“We would like to know if they are willing to pursue the development of residential regardless of the outcome of the casino project,” Yu told reporters. When asked whether the group was still keen on building 25 residential towers, Yu said nothing has been finalized yet.

Yu said the residential venture with ELI could still happen even if Okada were to get another local group as partner in the gaming and other components of the project in lieu of Robinsons Land Corp.

Assuming that Okada would get another big local group, Yu expressed confidence that ELI would not be displaced.

ELI is upbeat on business prospects for this year and beyond. Yu assured ELI stockholders that there was no bubble looming in the residential property market and that ELI, for its part, had “never been as stable as it is today.”

The company plans to invest P5 billion each year over the next five years for its expansion program.

“We think that we can beat the performance last year. If the first quarter is any indication, it’s even better. There’s money in the market and the economy is doing very well,” Yu said. Yu said results for the second quarter were “really good” and that sales were “very robust.” “We’re surprised it’s still very good. Consumer confidence is high.”

ELI’s consolidated net profit grew by 26 percent to P235.35 million in 2012. Consolidated revenues, composed of real estate sales, finance, commissions and other revenues went up 29 percent to P2.52 billion from a year ago. Real estate sales rose 40 percent last year while reservation sales reached P13 billion, up 73-percent year-on-year.

Yu assured shareholders that Empire East would not be delisted from the stock market after the consolidation of all property units under the group of Andrew Tan into Megaworld Corp.