Philrealty eyes new pillars of growth outside real estate

UPSCALE property developer Philippine Realty and Holdings Corp. (Philrealty) is diversifying into energy, healthcare, education and financial services businesses to hedge against any potential downturn in the real estate cycle.

In a press briefing on Tuesday, Philrealty president and chief executive officer Andrew Alcid said while property would still be the company’s bread and butter moving forward, the entry into these four new businesses would unlock new sources of recurring revenues seen to keep the company afloat if and when the real estate downturn happens.

“Philrealty is expanding its portfolio to industries that carry our core philosophy of creating better communities for Filipinos. We have identified healthcare, education, financial services and power – in addition to real estate – as the five corporate pillars that complete our company’s blueprint for the future,” Philrealty chair Gerardo Lanuza Jr. said.

Lanuza said that while Philrealty remained confident in taking calculated strides within the high-end property sector, “the positive economic outlook has created opportunities to look into industries outside real estate that can provide additional revenue streams for the company and expand its business portfolio.”

Asked whether Philrealty would sell new shares to fund its diversification plans, Alcid said the company was “open” to various options. These will be funded with a combination of equity and debt, he noted.

The diversification began with the formation of Sultan’s Power Inc., which will invest in green and sustainable technology. Alcid said Philrealty was finalizing a deal to acquire a majority stake in a start-up company that would turn plastic waste into diesel, gasoline and kerosene. The first of such fuel plants will be set up in Montalban, Rizal, Alcid said.

On the education business, Alcid said Philrealty had identified potential investment targets. For the healthcare sector, Alcid noted that Philrealty was planning to offer condominium units targeting active senior citizens.

In financial services, Alcid said the focus would be wealth management targeting the same upscale market served by Philrealty’s property businesses. Philrealty is keen on starting a wealth management company but it will also consider buying into an existing financial institution if the opportunity arises, Alcid said.

Philrealty exited a court-assisted corporate rehabilitation and resumed normal business operations last year, during which it reported a 178-percent growth in net profit to P109.21 million.