Robinsons Land Corp., the property development arm of the Gokongwei group, will maintain its capital spending at P17 billion for fiscal year 2016 to finance the construction of new shopping malls, residential towers and office buildings, a top executive said.
Robinsons Land president Frederick Go said in a recent interview the 2016 spending program would be on top of the budget for the purchase and development of an 8.5-hectare property in Chengdu, China.
“Our capital expenditures for the Philippines is estimated around P16 billion to P17 billion, excluding China,” Go said.
Robinsons Land said last week it acquired an 8.5-hectare lot in Chengdu for $200 million. The property is intended to be used for the development of residential projects with a minor commercial component, the company said.
Go said the company expected higher contribution from residential development for fiscal year 2016, as it started selling Westin Residences in Ortigas business district.
Go said the 500-room, high-end residential development would have an estimated sales value of P6 billion.
“We will have significant contribution from residential business for 2016 because of new residential launches, including Westin Residences. Last year, we did not launch any new projects,” Go said.
Go said the company remained cautious about the residential business, amid stiff competition from other property developers.
This why Robinsons Land is focused on building its recurring income businesses, particularly its shopping malls, hotels and office developments, he said.
About 50 to 80 percent of net income comes from recurring income, he said.
Go said for 2016, Robinsons Land planned to open five new shopping malls and would expand two existing commercial centers.
The five new malls are located in Tagum (Davao), Jaro (iloilo), Iligan City, Cebu and General Trias (Cavite). It would also expand malls in Ilocos Norte and Tacloban City.
These new shopping centers are expected to increase the company’s gross leasable space by as much as 11 percent.
Robinsons Land, currently the second largest shopping mall operator and developer, has one million square meters of total leasable space.
It is also one of the largest BPO landlords with 10 office buildings with gross leasable space of 275,000 square meters.
For its office development, the company aims to have 450,000 square meters of leasable space by 2018 and plans to increase the number of hotel rooms to 2,887 by 2017 from 1,896 as of end 2014.
Robinsons Land is targeting to double its net income to P9.4 billion by 2019 from P4.7 billion in 2014.