Century, Mitsubishi sign joint venture deal
Riding on the success of their maiden housing project in Cavite, property developer Century Properties Group Inc. (CPG) and Mitsubishi Corp. signed on Wednesday a deal to create a new joint-venture corporation that will bring to the local property market around P57 billion worth of affordable homes over the next five years.
Seeking to address part of the country’s huge backlog of 6.6 million housing units, the new venture plans to launch about 15 new housing projects equivalent to 33,000 housing units over the next five years. Each unit will be priced between the P1 million and P6 million, targeting middle-income, first-time home buyers.
The joint venture company, to be named Phirst Park Homes Inc., will be incorporated after the joint venture has secured clearance from the Philippine Competition Commission. The projects will be launched in key locations outside Metro Manila under a new brand called PHirst Park Homes.
Capital expenditures for the first five years are estimated at around P10 billion. CPG will subscribe to 60 percent and Mitsubishi to 40 percent of the authorized capital stock equivalent to P5 billion.
From a return-on-equity point of view, deepening their affordable housing partnership is seen beneficial for both CPG and Mitsubishi because of the faster turnaround time and higher margins from this type of development compared to high-rise residential developments.
“Our joint venture partnership with Mitsubishi Corp. solidifies Century’s plans of diversification and strengthens its positioning not just in the affordable housing category, but in the broader first home buyer market,” said Century Properties chair Jose E.B. Antonio.
“The big housing demand, coupled by the natural and good chemistry between Century Properties and Mitsubishi Corp., led us to a great milestone today—the signing of an agreement to form a joint-venture company for affordable housing,” said Mitsubishi general manager of Asean Urban Development Department Hidetoshi Suzuki. —DORIS DUMLAO-ABADILLA
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