Property and infrastructure developer DM Wenceslao & Associates Inc. (DMW) expects to spend P21 billion in the next five years to expand its commercial property portfolio and unlock more values from its vast landbank in its flagship Aseana estate within the Bay Area.
With an undeveloped 31 hectares in Bay Area, DMW currently has the biggest landbank in this reclaimed area—deemed a hot location due to an array of entertainment, retailing and gaming establishments and proximity to the Ninoy Aquino International Airport.
In 2018, DMW grew its net profit attributable to equity holders by 23 percent to P1.91 billion. Net income margin rose to 89 percent from 56 percent in the prior year.
This year, DMW is targeting net profit to grow by 10-20 percent through a mix of land sales, leasing income and development revenues, chief executive Delfin Angelo Wenceslao said in a press briefing yesterday.
“We’re quite confident about our growth prospects for the year,” he said. “Our margins are very high because we got our land at reclamation cost, not at acquisition cost. In terms of cycle, we’re now at value extraction.”
DMW secured 57 ha of land in the Bay Area as its compensation as the reclamation contractor. It has since then either leased, developed or sold 28 ha. Wenceslao said the firm’s remaining landbank would be sufficient to support the company’s growth in the next five years.
By 2023, the target is to deliver 380,000 sqm of gross floor area of leasable and saleable property developments at Aseana, 75 percent of which will generate recurring revenues annually.
To reach this 2023 goal, Wenceslao said DMW would likely spend P21 billion in the next five years for various property projects, mostly in Aseana complex. This will translate to about P3 to P5 billion in annual capital outlays, a surge from only P1 billion in annual spending before DMW’s stock market debut last year.
This year, projected capital spending is estimated at P4 billion. After raising fresh capital from its IPO, DMW no longer has to rely on lot sales and has more ammunition to develop its own projects.