Century Properties bets big on affordable housing

Century Properties and Japan’s Mitsubishi Corp. earlier signed a partnership deal to launch housing units for the first time homebuyer.

Antonio family-led Century Properties Group Inc. (CPG) is set to launch at least P10.6 billion worth of residential units in the next two years – including affordable housing, the market segment where it intends to be a significant player in the coming years.

From this year through 2018, CPG will bring to the market 3,381 residential units, mostly from its foray into affordable housing in Tanza, Cavite. This 26-hectare project offers 2,877 units valued at P4.5 billion.

CPG founder and chair Jose Antonio told reporters after the company’s stockholders meeting on Thursday that the company’s goal would be to eventually produce an annual inventory of 20,000 affordable housing units. This business may grow to account for about a third of CPG’s total revenues and net profit by 2020, he added, as the company now prepares the landbank needed to become a bigger player.

Beyond the maiden affordable housing project in Tanza, he said CPG was working to close a few other property deals in Cavite, Laguna, Batangas and Bulacan which would be devoted to affordable housing.

“We’d like to take the opportunity of (serving) the rising middle class. We’ll build communities that are affordable,” he said, adding that the country’s housing backlog of five million units is too massive as the property industry could only produce less than 500,000 units per year.

Antonio said there’s a sweet spot for housing developments priced between P1.1 million to P1.8 million.

Bulk of CPG’s affordable housing projects, he said, may be priced at P1.4 to P1.5 million. These will mostly consist of a 45-square meter house and lot with two bedrooms and provision for expansion of living space. This price point means that home-seekers can buy a housing unit for a monthly amortization of around P8,000, about the same as the price to rent a living space, Antonio said.

The first affordable housing project in Tanza, Cavite is a partnership with Mitsubishi Corp. This Japanese conglomerate will continue to be its partner in other affordable housing projects.

Antonio said Mitsubishi was offering CPG access to technology that could lower the cost of construction while ensuring good quality of developments. And because completion of horizontal housing developments is faster, this also hastens revenue recognition compared to high-rise developments.

For CPG, the foray into affordable housing can boost operating margins because these projects could tap fiscal incentives offered by the government. At the same time, purchases of housing units below P2.5 million are exempted from the value added tax.

Leisure estate is another segment that CPG will devote more resources to. This year, it is set to launch P2.2 billion worth of inventory consisting of 356 units in Batulao, Batangas. Sometime next year, it is also set to launch its master-planned tourism estate project in San Vicente, Palawan.

By next year, CPG will also launch Azure North Townhouse, which will offer 148 units valued at P2.7-billion as well as Acqua Townhouse in Mandaluyong, which will have a sales value of P1.2 billion.