DMCI:  No plans to list property unit

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DMCI Holdings Inc. said it has no plans of taking its property-development arm public. It said there won’t be any upside to the company since it has no recurring income and is focused on building residential projects for the middle-income market.

DMCI Chairman and President Isidro Consunji said listing its property unit, DMCI Project Developers Inc., right now will not be beneficial to the firm, as investors always look for recurring income, such as rentals coming from its malls and office buildings.

“The problem is, if you look at the value of DMCI Holdings and you isolate the real-estate company, the valuation is just the same; there is no discount. And if you go into IPO [initial public offering], investors will ask you why are you only in one segment and all of your competitors have a supermarket of products,” Consunji said, adding this may even cause a negative valuation for its property unit instead of creating more value.

The company is focused on the middle-income residential segment of the market and has lately ventured into the higher segment, which Consunji said became more profitable for them compared with the middle-income projects.

“For funding purposes, we can always tap a loan. Credit is very easy,” Consunji said.

At the moment, it has no plans of building projects for the business-process outsourcing firms or shopping malls, which most of the larger property firms, such as the SM and Ayala groups, have been doing during the last two decades.

Consunji said the company may hit sales income of P40 billion for the year, its highest annual sales so far as a result of a string of project launches.

Alfredo Austria, managing director of DMCI’s property unit, said they may hit its internal target of P25.5-billion annual sales by next month. He said, however, it has no plans yet if it will raise the target for the year as a result of brisk sales.

Its fiscal year starts in December.

“We are now doing projects outside of Metro Manila, with one in Davao. In May we sold 108 condominium units in Davao. For us, it is significant because sales of condos in Davao is usually slow,” Austria said.