MANILA, Philippines - Empire East Land Holdings Inc., the mid-cost real estate developer of property tycoon Andrew L. Tan, is warming up to the idea of tapping bank loans to help finance its P25-billion five-year spending program after staying debt free for many years.
In an interview on the sidelines of the company’s annual stockholders meeting yesterday, Empire East president Anthony Charlemagne Yu said the property firm may consider bank financing given the prevailing attractive interest rates.
“There are banks asking if we want to have loans and we’re looking into it because the loan rate is so low,” Yu said.
“For many years we have not availed of any bank financing. However, that does not mean that we are excluding ourselves from going that way, to do some bank financing. The business climate is so good and there are so many good business opportunities. We want to continue developing more projects and for this reason we are not discounting the possibility of obtaining bank loans in order for us to tap this low interest rate regime,” he added.
Empire East announced last year a five-year expansion program that would involve P25 billion in investments.
The aggressive expansion is being undertaken by the company to take advantage of robust demand from the middle income segment.
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“To be able to deliver our projects within the commitment timetable, we spent P3.45 billion for construction and development activities in 2014. We expect to pour P5 billion into such activities this year, as we make sure that work on our new and ongoing communities progresses at a steady pace,” Yu said.
For this year, the company plans to launch two mixed-use developments in a 23-hectare lot in Pasig City and in a 1.7-hectare property in Quezon City where Broadway Centrum is currently located.
For its Pasig project, Yu said the property would be developed into a masterplanned city bigger than Megaworld’s Eastwood township in Libis.
The Quezon City property, meanwhile, will feature a four-story lifestyle mall and four residential buildings.
“We’re studying if we should have office or BPO buildings in those developments. We’re not sure yet. But residential and commercial are already sure,” Yu said.
He said Empire East is also actively pursuing expansion outside Metro Manila by scouting for available land.
“As long as there is a good property, we will acquire. We are actively looking for suitable sites outside Metro Manila. We have gone to see a lot of properties outside Metro Manila. But location is everything, it’s important we get the correct site but we will go there. We will definitely tap other markets outside Metro Manila,” Yu said.
Last year, Empire East said its reservation sales hit P22 billion, one of the highest in the industry.
Net income of the company and its subsidiaries also surged 61.3 percent to P484.5 million in 2014 from P300.4 million the previous year.
“Everything seems to be on the upward movement, all indicators show that we could exceed what we had last year,” Yu said.