Century moves into low-cost housing

Real estate developer Century Properties Group Inc. is diversifying its business to venture into affordable housing that offers wider profit margins than its current portfolio of high-end, high-rise condominium projects.

In a briefing, company chair Jose Antonio said the low-cost segment of the real estate market—which the firm described as its “horizontal economic housing” line—yielded as much as 40 percent in gross margins, compared to 15-20 percent for vertical developments.

“This is really where the sweet spot is,” he said, adding that the backlog for low-cost housing in the country remained significant.

Antonio said the cycle in the low-cost housing segment, from product launch to turnover was also faster than in the traditional high-rise condo project, which could take as long as five years to complete.

The firm is now scouting for land in Bulacan, north of Metro Manila, Cavite and Laguna.

Century Properties’ affordable mass housing projects will use prefabricated construction materials, allowing units to be completed in just a few months.

Antonio said the houses—costing between P1 million  and P1.5 million for a 40-square meter unit—will have provisions for future expansion.

He said he envisioned the three decade-old firm to be like “a table with four legs,” representing high-rise condo business, malls and services business, affordable housing, and its upcoming tourism and leisure business.

“We expect each segment to provide roughly a fourth of our revenues eventually,” he said.

In Friday’s annual stockholders’ meeting, officials said the company was “on track” to the scheduled completion of its residential projects.

They said Century Properties expected to deliver by 2020 a total of 31 residential buildings composed of 18,000 units and 1.34 million sq m of gross floor area.

In 2015, the firm completed five condominium projects with 2,500 units that were 94-percent sold and had sales value of P12.8 billion.