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LISTED real estate developer Sta. Lucia Land, Inc. may raise more funds next year to ramp up project launches and support its land acquisition initiatives amid tighter competition in the industry.
Sta. Lucia Chief Financial Officer David M. dela Cruz told reporters last week the company may need to raise another P2-3 billion — either through an equity offer, quasi-equity issuance or taking in additional debt — “towards the end of 2016.”
Sta. Lucia is fresh from raising funds in the capital market after making its debut at the Philippine Dealing and Exchange Corp. last week with the listing of P4 billion worth of fixed-rate retail bonds.
“We need to digest it first. We don’t want to over expand… We have a conscious effort to expand our land bank. All our competitors are starting to go to the provinces where we are, so we have to strengthen our foothold,” Mr. dela Cruz said.
The fund-raiser will allow the real estate firm to more than double its capital expenditure budget to as much as P4 billion in 2016 after spending less than P2 billion in the past several years, Mr. dela Cruz said.
“We haven’t done land banking before. In terms of accelerating projects, maybe we can accelerate projects by 15-25%. We’re a little fluid,” Mr. dela Cruz said.
Sta. Lucia is present in 10 regions in the country, but about 90-95% of the company’s projects are joint ventures. Its 11-hectare property in Cainta, Rizal, where the Sta. Lucia East Grand Mall is situated is one of the few properties that the company owns.
“We have always been in joint ventures. We’ve always been developing other people’s lots. Now, we want to start developing our own land,” Mr. dela Cruz said.
“We will continue the JV formula: that’s our bloodline. That is something we will do forever, but if there are opportunities to acquire land then we will,” he said.
Even as 65-70% of the business comes from sales to overseas Filipino workers, Sta. Lucia is unfazed by threats of a slowdown in remittances and rising interest rates.
“There might be an effect in the real estate industry, but our buyer profile is more on the lots-only so the products that we sell in value is a little lower than a house and lot,” Mr. dela Cruz said.
For the first nine months, the company’s net income jumped by 51% year on year to P514.2 million from P339.78 million, while gross revenue increased by 48% to P2.25 billion from P1.52 billion.
Shares in Sta. Lucia Land were unchanged at 74 centavos each on Wednesday.