Eton allots P28-B capex for 5 years, seeks to build up leasing income

As published in Manila Bulletin on May 30, 2015 Eton Properties Philippines, Inc. is allotting at least P28 billion in capital expenditures (capex) from 2015 to 2019 mainly for the construction of more leasing space to generate more recurring income. In an interview after the firm's annual stockholders' meeting, Eton deputy chief operating officer Josefino Lucas said the capex will fund ongoing residential projects as well as new office and retail spaces. "Right now our total GLA (gross leasable area) is 156,000 square meters, that's largely BPO (business process outsourcing offices) and some retail components. We plan to double that to 300,000 sqm in two and a half to 4 years," said Lucas. He explained that "the next 150,000 sqm is for launching this year. It's a combination of two large office buildings, one small one, and some small retail." However, Lucas said the F25­billion capex is allotted only for projects that they will launch this year. "So if there are projects somewhere around 2018, then that would mean revising the capex for the next five years," he noted. Lucas said Eton is not being very aggressive in building residential projects. "We're tempering it. We'd like to build up more on our recurring income by capitalizing on the BPO market. We think that's where significant growth is. Residential is a bit more cyclical, we want to time it," he said. Eton's existing projects are mostly residential while its BPO office buildings are fully leased out. "We could have started (new office buildings) earlier but that did not happen because last year was a period of consolidation. We were toying to prepare plans for the next five years," said Lucas. For 2015 alone, Eton is allotting a capex of P9 billion, more than double the P4.3 billion spent last year for the completion of residential projects. "For 2015, we plan to launch a mixed­use development composed of a high rise condominium, a boutique mall, and a BPO office building in Makati City," said Eton president Lucio Tan Jr. He added that Eton will also complete the re­master planning process for Eton City, start construction of a fifth BPO building in Eton Centris, expand Centris Walk to increase its retail footprint and enhance recurring income streams. Eton will also pre­develop its sixth BPO building in Ortigas Center, and will reconceptualize its Aurora Heights Residences in Quezon City to maximize use of the property, said Tan.