Rockwell Land sets aggressive land acquisition plan
Upscale property developer Rockwell Land plans to scale up its footprint in the local property scene and become more aggressive in landbanking activities this year and next year.
From a landbank equivalent of only 3 percent of its assets to date, the goal is to jack up the ratio to 12 percent this year, which will require about P4 billion to P5 billion worth of land acquisitions, Rockwell officials said during the company’s stockholders meeting.
This marks a shift in the company’s strategy of acquiring land only when it is ready to start building on the site.
Rockwell president Nestor Padilla told reporters after the stockholders meeting yesterday that a more aggressive landbanking strategy would ensure a busy pipeline for the company in new locations in the years ahead.
“The target is to acquire P4 billion to P5 billion (worth of new land) for it to reach the desired ratio of 12 percent of total assets over the next two years,” Ellen Almodiel, Rockwell chief financial officer, said in a briefing.
“Aside from properties we will be closing in Metro Manila, we are in advanced discussions for mixed-use projects in both the north and south of the Metro (Manila). We are very excited about this growth as it will allow us to introduce different products and share the Rockwell lifestyle to new markets,” said Rockwell senior vice president Davy Tan.
Landbanking is thus seen to constitute a key component of the company’s P14-billion capital spending this year. The rest will be used to construct Aruga Makati, which will open by 2020, to start the development of the new estate in Mactan, Cebu as well as the completion of residential towers at upscale Proscenium.
The projected P4-P5 billion increase in landbank in the next two years is seen to translate to 284 hectares of new land to be held for future development.
As of last yearend, Rockwell Land booked about P1.2 billion worth of landbank out of P29.4 billion in total assets.
As to why it’s only now that Rockwell is stepping up landbanking efforts when property prices have increased rapidly over the years, officials still see opportunities to accumulate land outside Metro Manila. At the same time, some of the landbank will be acquired not necessarily through outright cash purchase but through partnerships. Rockwell typically keeps a 60-70 percent economic interest in joint venture developments.
Rockwell also announced the launch of the second tower of The Arton, a high-rise residential development in Quezon City, this June. This new tower brings to the property market P4 billion in new residential inventory.
The P15.6-billion three-tower Rockwell project is a joint venture with Japan’s largest real estate company, Mitsui Fudosan Inc. The Arton by Rockwell is scheduled to be completed by 2023.
Rockwell is also set to launch its first resort development in Mactan, Cebu. “We remain to be on the move with our newest development in Punta Engaño boasting of beach front living. The 5.3-hectare property will have over 200 residential units and a hotel that will serve the growing tourism industry,” Padilla said. The P6.2-billion new Rockwell project for sale is scheduled to launch (by) third quarter of this year.
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