Robinsons Land earmarks P17B for capital spending

GOKONGWEI-LED property developer Robinsons Land Corp. has earmarked about P17 billion for capital spending next year mostly to build new shopping malls to bring its network to 50 by 2017.

Last week, RLC opened its 41st shopping mall in the country and its biggest outside Metro Manila—Robinsons Galleria Cebu—which is located along General Maxilom Avenue in Cebu City. This is RLC’s third shopping hub in Cebu City and will be part of a complex that will also have three high-rise residential towers, a hotel and one business process outsourcing (BPO)-oriented office tower.

For 2016, RLC is opening five new malls and launching the expanded sections for two existing malls. Set to open next year are malls in Gen. Trias in Cavite, Tagum in Davao, Jaro in Iloilo City, Iligan City in Lanao del Norte and Naga in Camarines Sur.

The existing malls in Ilocos Norte and Tacloban, on the other hand, will open new wings. The expansion in Ilocos Norte will double the size of the current mall in San Nicolas and will also incorporate a BPO space.

At the sidelines of the opening of Robinsons Galleria Cebu, RLC president Frederick Go said most of the capital outlays for next year would be funded by debt. Since the bulk of the company’s earnings are recurring—mostly from commercial property rental income—he said it made sense to fund expansion through borrowings.

About 85 percent of RLC’s earnings come from recurring sources of income while only 15 percent come from residential development revenues. The company does not expect any significant change in the mix moving forward.

Arlene Magtibay, senior vice president and general manager of RLC’s commercial centers division, said in a separate interview: “We’re opening around five to six malls a year so by next year we should have 46. So I think the next milestone of 50 malls will be hit by 2017.”

“The designs of the mall are becoming more beautiful. I think it’s a natural result of increasing competition,” Magtibay said, adding that the ultimate beneficiaries would be the consumers.

Apart from building newer and attractive malls, RLC also seeks to make its new shopping mall developments more energy-efficient.

Go said that after using solar power for RLC’s mall in Palawan, four more existing shopping malls would have solar plants on their roofs: Iloilo, Dumaguete, Antique and Roxas City. After these, Go said RLC would work on using the sun to help power five other existing malls.

Commenting on the upcoming mall openings, Magtibay said: “Most of these locations are still underserved, which is why in Tacloban we’re expanding. We feel there’s a market for a bigger mall. It’s the same thing with Ilocos Norte. We tested the market with a rather small mall and it’s doing very well and there’s a clamor among the tenants for them to be able to get into the mall.”

In Tacloban, Magtibay said RLC would put up a Summit Hotel and likewise build a transport terminal within the complex.  At present, the group’s budget hotel arm GoHotel is already operating in the area.

In almost all RLC malls, a “Lingkod Center” has been built to house the satellite offices of major government agencies.

To date, RLC has a total gross leasable area of 1.1 million square meters contributing to its recurring cash flow, making it the second largest shopping mall developer in the country next to SM Prime Holdings. Its leasable area is projected to expand by 15 percent next year and by 11 percent in 2017 upon reaching the 50-mall milestone.