By Krista A. M. Montealegre, National Correspondent
AYALA-LED Prime Orion Philippines, Inc. (POPI) is riding on the country’s manufacturing resurgence, as it targets to become the largest player in the real estate logistics and industrial sector.
POPI President and Chief Executive Officer Maria Rowena Victoria M. Tomeldan said in a briefing on Thursday the goal is to build a hub in key cities across the country starting with the launch of two industrial parks by the first half of next year.
“Because of the economic fundamentals of the country, the manufacturing sector is enjoying growth. We want to seize the opportunity to bring them (locators) all in,” Ms. Tomeldan said.
Kicking off the expansion will be a 60-100 hectare industrial park in Cagayan de Oro near the Laguindingan airport that will make available 42 parcels of land consisting of smaller lot cuts of 7,000 square meters compared to the usual size of one hectare in Luzon.
The second industrial park will rise in central Luzon, but Ms. Tomeldan declined to disclose the specific location.
Moving forward, the intention is to keep a balanced portfolio mix of lots for sale and warehouse facilities within the estate that will generate recurring earnings for the company, she said.
Ayala Land, Inc. is set to own 64% of POPI after engaging in a P3-billion share-swap deal that transferred the former’s 75% stake in Laguna Technopark, Inc. (LTI) into the listed firm. The property giant is keen on further raising its stake in POPI “if there is an opportunity,” Ms. Tomeldan said.
The infusion of LTI into POPI, owner of the Tutuban Center in Manila, set the stage for the latter’s venture into the real estate logistics and industrial estate business. LTI, which posted revenues of P1 billion and a net income of P300 million in 2016, manages the 460-hectare Laguna Technopark in Santa Rosa and Biñan, and 135-hectare Cavite Technopark in the municipality of Naic.
As part of its transformation, POPI maximized the value of its 14-hectare Lepanto property in Calamba, Laguna by shifting subsidiary Lepanto Ceramics’ focus from tile manufacturing to real estate warehouse operations.
The company upgraded the common areas of the Lepanto Industrial Complex, initiated rehabilitation program, and converted formerly non-leasable areas into leasable spaces.
The retail business also continued to undergo a massive metamorphosis. POPI turned the Tutuban railway station building into a model for adaptive reuse of a built heritage site. Major facility upgrades, the re-zoning of the mall, and the introduction of unique retail and wholesale concepts allowed the company to improve profit margins for the year.
So far, POPI has spent P500 million to renovate the Tutuban commercial complex, with a gross leasable area of 53,000 square meters.
POPI generated earnings of P18.6 million last year, a turnaround from the net loss of P414.9 million which included provision for probable losses of P235 million.
Consolidated revenues fell 27% to P630.2 million from P860.1 million, as it winds down its non-core issuance business. The decline was tempered by higher rental revenues from Tutuban Center and Lepanto warehouse.
Shares in POPI fell eight centavos or 2.45% to end at P3.19 each on Thursday.