Conglomerate Aboitiz Equity Ventures Inc. is diversifying into the real estate business with the acquisition of the privately held Cebu property arm of the controlling Aboitiz family.
In a disclosure to the Philippine Stock Exchange on Friday, AEV said its board approved a proposal to buy 100 percent of Aboitiz Land Inc. for P3.2 billion. AEV will purchase Aboitiz Land from its major shareholder, Aboitiz and Co. Inc.
“We are looking at expanding AEV’s earning capacity in business sectors that have scale, amid a growing domestic economy and Filipinos’ improved earning capacity. Aboitiz Land is an ongoing business with strong recurring income from its industrial estates as well as from its many existing projects. It also has a backlog of prospective innovative projects.”
Aboitiz Land is one of Cebu’s key real estate developers with investments in residential, commercial and industrial developments as well as property management. It is also the developer and operator of two economic zones: the Mactan Economic Zone II in Lapu Lapu City and the West Cebu Industrial Park in Balamban, through its subsidiary, Cebu Industrial Park Developers Inc.
A statement from the company noted that Aboitiz Land was known “for its strong brand and a reputation for quality projects.” Aboitiz said Aboitiz Land also has a land bank with “attractive valuations.”
“It also has an existing management team we have confidence in,” it added.
The transaction is expected to be completed within the next two months upon the execution of the requisite share purchase agreement and other collateral contracts.
Based on the Cebu company’s website, Aboitiz Land has had about two decades of experience in catering to the “discriminating” needs of “diverse” markets—from the young and upwardly mobile, young couples, growing families, non-Cebu natives who wish to establish an address in the city to the international Filipino community and overseas Filipino workers.