DM Wenceslao’s P15.5B IPO eyed this semester

Aseana Square is a two-storey food hub and commercial complex that serves the 240,000 vehicles that pass through Aseana City.

Construction and infrastructure group DM Wenceslao and Associates Inc. aims to pursue a P15.5-billion initial public offering (IPO), reviving a capital-raising initiative first hatched three years ago, within the first semester.

DMWAI filed on Tuesday a new prospectus at the Securities and Exchange Commission for the offering of up to 679.2 million shares, or about 20 percent of the company’s total issued shares to the public.

Reginald Cariaso, managing director at BPI Capital which is a joint global coordinator and bookrunner for the IPO together with Maybank, said the plan would be to launch the offering within the first half of 2018. This is subject to regulatory approvals.

Asked why the group is reviving the IPO at this time, Cariaso said in a text message on Wednesday: “The Manila Bay Area, in which Asean City is strategically located, has progressed significantly since 2015 in terms of infrastructure connectivity, property development, and land values. It’s more apparent now for investors and the market to appreciate the strategic value and future prospects of Aseana City.”

Proceeds from the offering will be mainly used to further expand DM Wenceslao’s real estate development footprint through a mix of commercial and residential projects in its flagship Aseana City, a mixed-use business district in the Manila Bay Area.

Based on the company’s financial statements, around 50 percent of its revenues are derived from recurring sources, or from the leasing of office and commercial space and land rentals. Since shelving its 2015 IPO plan, it has doubled its net income from P871 million in 2015 to P1.56 billion in 2017.

To date, DM Wenceslao has completed more than 100 land reclamation and construction projects and developed three commercial buildings in Aseana City.

Incorporated in 1965, the company is 78.6-percent owned by Wendel Holdings Co. Inc. and 21.3 percent held by Delfin J. Wenceslao Jr., the company’s chair, president and director.

In a 2017 property report, real estate consulting firm Colliers International said,“The development of mixed-use communities across Metro Manila is becoming more popular as these projects integrate the live-work-play-shop lifestyle. The reclaimed land in the Manila Bay area is a feasible option for mixed-use projects as shown by the growing popularity of D.M. Wenceslao’s Aseana City.”

Data from Colliers showed that the value of reclaimed land in the Manila Bay area now ranges between P150,000 and P250,000 per square meter (net of value-added tax), growing by an average of 24 percent annually over the past 10 years.

In addition to its property development business, DM Wenceslao has the capacity to undertake large scale infrastructure and construction projects.