By Bernie Cahiles-Magkilat
Niche real estate developer Torre Lorenzo Development Corp. is investing P30 billion to P32 billion to complete some 22 projects by 2020 with more developments towards the regional centers as it targets to go public three years from now.
“We have grown by leaps and bounds in last few years,” said Tomas Lorenzo, company president and CEO, noting the company has so much in its portfolio of projects as they innovate product offerings and diversify into the regions from university residences to residential condominiums, resorts and hotels.
It has lined up projects in Davao City, Baguio, San Fernando in La Union, Batangas and the Visayas areas.
Torre Lorenzo Chief Finance Officer Emmanuel A. Rapadas said these 22 projects would generate gross sales revenues of P60 billion over a five-year period. Last year, the company generating gross revenues of P2.4 billion and expects to hit P3.1 billion this year and P9 billion in 2020 or a 25 to 33 percent growth annually.
This financial strength would prepare the company to go public by 2020 as they would have established themselves as a property developer to reckon with.
“We could have built enough confidence to our name and a balance sheet that would be appreciated more investments. So for now, we are still in the preparatory stage,” Rapadas added.
According to Rapadas, project financing is through a combination of equity and borrowings leveraging on the investments made by unit owners. The company has allocated P1.5 billion in capital expenditures this year or an average of P5 to P6 billion over the remaining of the five year period which started in 2016.
The biggest investment would be the construction of the P4.1 billion Dusit D2 Hotel and Dusit Residences, the first five star tourist accommodation facility located on a 1.5-hectare property in Lanang, Davao City.
“We are different, we just don’t follow the trend because by that time we came in we’re already the last so instead we watch demographics and migration patterns,” said Lorenzo.
He said that lots of Filipinos working abroad want to have a place to return to in their home provinces, but there are also those who would like to have a condo in the regional centers and in Manila for their children, who are going to school yet.
For this year alone, the company is expected to deliver four to five projects including the Torre Sur in Las Piñas and Torre Central near the University of Sto. Tomas. Next year, Torre Lorenzo will deliver two residential projects in February and April.
Five new projects will be launched this year including the T. Hotels in Lipa and San Fernando in Pampanga, a university residences in Malvar, Malate and another student condo in Dasmarinas, Cavite. A similar student condo in Katipunan area in Quezon City is expected to be launched in 2018 as negotiations with some landowners are still ongoing.
Lorenzo said that their projects are not leveraged on price but rather on the quality of their unique offerings stressing, “I don’t claim to be very affordable, but we are quality.”
Its most affordable so far would be P80,000 square meter condo unit. The Malvar university residences has a price quotation of P110,000 per square meter.
Lorenzo explained they also eyed to hit a 50-50 revenue contribution from its leasing business and outright sale of condominium units five years from now. Each Torre Lorenzo property has a leasing office where buyers who want to lease out their units are being taken cared by the company.
The company has a policy to hold on to some units in each of their condominium projects for leasing purposes. This ensures good maintenance of the units, amenities, and security.
“We keep some units because these command premium rates,” he said. The issue though is that there are also many interested buyers for the units under leasing arrangements.
So far, revenue contribution from leasing is still small at 10 percent last year. It is projected to account for 15 percent of total this year.