CLI set to raise P3.8 billion to fund real-estate projects

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In Photo: Base Line Center Cebu

PROPERTY developer Cebu Landmasters Inc. (CLI) is raising up to P3.8 billion from its initial public offering (IPO) in the next three months to finance the company’s ongoing project developments and future plans, as well as for debt repayment and capitalization.

The real-estate firm is listing and selling firm shares of 505 million common shares and an over-allotment option of 75 million shares on the local bourse in mid- to late-May 2017—each priced up to P6.56—according to its prospectus submitted recently to the Securities and Exchange Commission.

Of the firm shares, 430 million are new shares comprising the primary component of the offering, while 75 million are existing shares forming the seconday trache. The 75 million shares from the green shoe will be from existing shareholders.

Post IPO, CLI will bring to public hands the ownership of 33.84 percent of its oustanding common stock if the full offer with the over-allotment were exercised.

BDO Capital will act as the sole issue manager for CLI’s stock-market debut. It shall work with BPI Capital and they will act as joint lead underwriters and joint bookrunners.

Majority of the equity deal’s proceeds of P3.805 billion will bankroll the company’s land acquisition and development costs for expansion plans to five major cities in the Visayas and Mindanao. A portion of the proceeds will also be used for loan settlement and working fund requirements.

The Cebu-based firm is the second leading local housing developer today in the Visayas and Mindanao as regards the number of residential condo units, partaking 11 percent of the market share, next only to real-estate giant Ayala Land Inc. at 17 percent. In fact, it was cited in a 2016 report of CBRE for having the fastest selling mid-end projects in the Queen City of the South as indicated by absorption rates.

For 13 years in the business, CLI has diversified from the residential segment into commercial, hospitality, industrial and mixed-use product offerings further distinguishing it from other real-estate players in the region.

“We will use our flexibility to create new developments in the cities of Davao, Cagayan de Oro, Dumaguete, Bacolod, Iloilo and new Cebu locations. These projects will maximize the demand-and-supply indicators in each location with the best uses for each site,” said Jose Soberano III, president and CEO of CLI.

In highly urbanized areas that enjoy strong sustained growth, like the booming Cebu IT Park, for instance, it will offer a high-end New York-inspired residential development master planned by global designers to be part of a mixed-use hub with a retail plaza, park and a future office component.

Also in Davao and Cagayan de Oro, it shall build mid-market residential condominiums that meet the needs, aspirations and price points of business-process outsourcing (BPO) and other employees, as well as those of overseas Filipino workers (OFWs). In fact, the first phase of its Cagayan de Oro project sold out in less than a year.

What’s more, the real-estate firm is set to widen its reach in the so-called Next Wave Cities, such as Iloilo City, Bacolod and Dumaguete, where it will offer its economic housing brand for the employees of BPO firms and families of overseas Filipino workers

Last year CLI’s net income amounted to P702 million, as revenues reached P2.17 billion.

Incepted in 2003, CLI has delivered about 11,101 units in various stages of construction. Apart from affordable housing projects, the property firm also ventured into office and mixed-use development.

 

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Roderick L. Abad graduated from Pamantasan ng Lungsod ng Maynila, with a degree course in Bachelor of Arts in Mass Communication. He has 12 years of journalism experience, starting as a Special Features Writer in a major daily newspaper. In 2006, he moved to the BusinessMirror in the same capacity and, eventually, became a beat reporter. To his credit, he was a finalist in the 2011 Holcim Journalism Awards for Sustainable Construction and the 2013 Lasallian Scholarum Awards. He remains affiliated with the BusinessMirror as a contributor.