CPG eyes another bond issuance to finance its affordable housing projects

By Victor V. Saulon, Sub-Editor

CENTURY Properties Group, Inc. (CPG) expects to return to the bond market towards yearend or early 2020 to source at least P3 billion to fund its affordable housing and leasing business segments, company officials said on Monday.

Jose Marco R. Antonio, CPG co-chief operating officer and managing director, said the company’s plan to build about 30,000 affordable homes in the next four to five years would be partly funded again by proceeds of a capital raising at the bond market.

“That’s roughly broken down to around 15 projects, around four per year in terms of project launches for the affordable segment,” he told reporters.

Mr. Antonio said for now, the company is fully secured with its capital expenditure program for the year of around P8-P10 billion.

Ponciano S. Carreon, CPG chief financial officer, said the property developer plans to return to the market “maybe later part of this year, first part of quarter next year.”

“The thrust of the company now is to grow the affordable and the leasing segment,” he told reporters.

“Maybe the minimum will be this size,” Mr. Carreon said, referring to the listing of the three-year bond issuance.

On Monday, CPG announced the completion of its retail bond offering at the Philippine Dealing and Exchange Corp.

The company raised P3 billion in fresh funds that it will use to partially finance the development costs for its affordable housing and townhouse projects.

It initially planned to raise P2 billion and because of the strong demand, it exercised its oversubscription allowance and raised a total of P3 billion.

Because of the significant interest in the offering, the three-year unsecured fixed rate peso bonds due in 2022 were priced at the tighter end of the indicative spreads at an interest rate of 7.8203%.

Mr. Antonio described bond issuance as a “significant milestone for CPG as it continues to expand into various asset classes and diversify its funding sources towards becoming a bigger and more profitable company.”

CPG, which had been focused on developing high-rise condominiums, rolled out its business expansion program five years ago to diversify into other areas of the real estate business.

In 2017, it launched its first affordable housing community in Tanza, Cavite under the brand PHirst Park Homes, in partnership with Mitsubishi Corp. The brand has so far launched two more communities in Lipa, Batangas and San Pablo, Laguna, with a total 33,000 housing units in the pipeline in the next four to five years.

“Ultimately, we hope that the affordable housing platform will contribute around 35% to 40% to our topline and bottom line,” Mr. Antonio said. “Right now it’s 10% contribution to the bottom line.”

“Calabarzon remains to be prime target market, but we’re also hoping to launch in the north as well,” he added.

Asked about when the company plans to expand to the Visayas and Mindanao, he said: “Probably we’ll do that in the medium term but for the short term, we’re gonna concentrate in Luzon.”