Filinvest defers some plans, cuts capex for 2020
Gotianun-led Filinvest Land Inc. (FLI) is trimming its capital outlays for this year to P16 billion from the original capital expenditure (capex) budget of P30 billion to prepare for a challenging operating environment that may persist due to the new coronavirus disease (COVID-19) pandemic.
In 2019, FLI grew its net profit by 7 percent to P6.28 billion, on the back of a 16-percent growth in gross revenues as both residential development and leasing portfolio expanded earnings contribution at a double-digit pace.
“We are satisfied with our 2019 performance as both our residential sales and recurring income businesses reflected growth. The first quarter of 2020 has been challenging for our country with notable calamities such as earthquakes in Mindanao, the Taal Volcano eruption and the global health crisis that is COVID-19. We have revised our project lineup and have moved some launches originally scheduled for the second half of 2020 to 2021,” FLI chief executive officer and president Josephine Gotianun-Yap said in a statement.
“As a result, our capex is expected to reach P16 billion for the year. We will, however, go ahead with residential projects in new geographies within the country. We have also allocated a significant amount of this year’s resources for the completion of additional office buildings, the innovation park, as well as the development of our townships. All of these signify our confidence that our company and the country will be able to hurdle the challenges ahead of us,” Gotianun-Yap added.
Last year, FLI saw a 25-percent increase in rental revenue, which reached P7.01 billion, while residential development revenue rose by 18 percent to P17.01 billion.
The growth in residential revenue was attributed to the high sales take-up levels in 2018, as well as the completion of mid-rise and high-rise residential buildings in 2019.
FLI reported strong demand for residential product offerings under the Futura brand, which is focused on affordable housing projects and mid-rise building communities, alongside the selection of themed horizontal, resort-inspired mid-rise, and highly accessible high-rise communities developed under the Aspire brand that caters to the middle-income segment.
The company seeks to address the needs of the end-user affordable and middle-income markets, which it believes to be “stable and underserved.”
In 2019, FLI launched residential projects in greater Metro Manila such as Valenzuela City, Taguig City, Manila, Cainta and Muntinlupa, as well as in the provinces of Cavite, Rizal, Laguna, Pampanga, Cebu and Davao.
Meanwhile, the rental revenue growth of 25 percent was due to the completion of two new office buildings that brought FLI’s total to 30 office buildings equivalent to 524,00 square meters of gross leasable area (GLA).
FLI’s target is to reach 2.1 million sqm GLA by 2024 for its recurring income business, which includes its office, retail, logistics/innovation and dormitel investment properties.
The office buildings are concentrated in its three Philippine Economic Zone Authority-registered hubs in Filinvest City, Alabang; Mimosa Plus in Clark Special Economic Zone ,and Cebu. FLI expects the office segment to continue growing in the medium term, driven by demand from traditional offices, business process outsourcing, coworking spaces, and emerging technology and e-commerce companies.
To further boost its rental business, FLI has also ventured into the logistics space through the launch of the Filinvest Innovation Park at New Clark City in mid-2019, citing demand for big land parcels and ready-built factories from the growing logistics and e-commerce industry.
Apart from lot leases, FLI is looking at constructing high specification structures for lease to customers. By the second half of 2020, the innovation park can start receiving locators who may wish to immediately start their building and warehouse construction. Meanwhile, planning and development of phase 2 will start by the fourth quarter of 2020.
FLI noted that the newly completed government-built access road from the Subic-Clark-Tarlac Expressway to New Clark City had substantially improved travel and transportation to and from the Filinvest Innovation Park. INQ
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