Vista Land to intensify expansion in provinces

MANILA, Philippines — The Villar group is scaling up property businesses by building new shopping malls, residential projects and business process outsourcing (BPO) office space across the country.

Residential arm Vista Land & Lifescapes Inc., which announced on Thursday an 18-percent year-on-year growth in its net profit for the first half of P2.6 billion, plans to further expand its geographical footprint to cover more provincial areas.

About 42 percent of revenues booked by Vista Land in the first semester came from the provincial arm Communities Philippines, significantly rising from a share of 34 percent in the same period last year. This segment sells housing units mostly below P3.5 million.

“Our provincial expansion is continuing strongly,” Vista Land president Manuel Paolo Villar said in a press briefing, adding it’s possible that this segment would eventually account for majority of the company’s revenues.

The earnings growth in the first semester was fueled by a 20-percent expansion in revenues, which reached P9.7 billion for the period.

As an indicator of sustained revenue growth in the future, sales also remained strong, growing by 18 percent to P23.6 billion in the first semester. The company expects full year sales to hit record levels of about P46 billion. Demand from overseas Filipinos continued to account for a big bulk of Vista Land’s business.

“Vista Land continues to remain firmly on a solid growth path,” Villar. “Demand for housing is expected to be robust, particularly in the affordable price segment which is dominated by our Camella brand.” “There is no oversupply in housing and our aggressive plans to expand countrywide remain unchanged,” he added.

The company’s cash position increased by 57 percent during the period to P11.83 billion, buoyed by a fresh credit facility tapped from two banks.

“It is noteworthy that we have been able to borrow on much improved terms compared to a few years ago. During the second quarter, we raised P6 billion at an interest rate of 5.75 percent per annum with a tenor of five years, compared to over 7.27 percent last year. I believe this reflects the banking community’s increased confidence in Vista Land,” said company chief financial officer Ricardo Tan Jr.

“We now have residential housing developments in 31 provinces and 64 cities and municipalities around the country. Our continued expansion in the provincial areas has solidified Vista Land’s dominant position in housing in the Philippines,” added Tan.

Manuel Villar, company founder, said through the family’s mall development arm, Starmalls Inc., it would open five new shopping malls next year, adding to its current portfolio of six malls. The new malls will rise in Daang Hari, Davao, Taguig, Sta. Rosa and Cebu.

Next year, the elder Villar said Starmalls would start constructing four to five more malls, utilizing the group’s existing landbank. Since Starmalls had minimal debt, Villar said Starmalls could afford to finance this expansion through borrowing.

Vista Land will grow its own retail portfolio as well, according to Villar, citing upcoming projects in Iloilo, Cagayan de Oro and Malolos. While Starmalls develop “big-box” type of shopping centers, Villar said Vista Land’s malls would be more “lifestyle-oriented.”

The younger Villar said Vista Land’s Evia project in Daang Hari was already hosting a growing number of retail shops. “We have announced we’ll hit P1 billion in recurring revenues in five years. We are on track and we’re actually doing better than that,” he said.

As prospects are seen good for BPO office development, this segment was likewise noted as part of the group’s expansion strategy through either Starmalls or Vista Land.