ETON Properties Philippines Inc., the property-development arm of tycoon Lucio Tan, is increasing its hospitality portfolio after it converted a portion of its project Eton Makati into a suite-type lodging for businessmen and travelers.
Josefino Lucas, Eton’s deputy COO, said 360 units of the more than 1,000 units of its Eton Makati were converted to hotel rooms and that portion was rebranded as Eton Hotel mini-suite.
The hotel was officially launched in December last year with the company expecting a gestation period of six months to one year to determine its viability for replication in other Eton areas in the country.
“Eton’s mini-suite is positioned to the independent travelers in Makati, focusing on foreign visitors, as well as people doing business in Makati,” Lucas said.
Eton is allocating P5 billion in capital expenditure (capex) for the year, as it completes a number of its projects. The company will launch a 6,000-square-meter (sq m), two-tower, mixed-use development in Manila, along Roxas Boulevard, beside Admiral Hotel; a 33,000-sq-m commercial hub in Eton City; and a 1,500-sq-m commercial strip along Ortigas Avenue in Greenhills, San Juan.
Funding for its capex will be sourced through a number of credit facilities the company previously signed, but mainly from sister-company Philippine National Bank, said Wilfredo Pineda, Eton CFO.
Pineda said the credit facility will cover 70 percent of the capex and the rest from internally generated cash.
He said Eton is developing 170,000 sq.m. of additional leasable space in the next three years to complement the current 147,000 sq.m. of business-process outsourcing (BPO) and commercial spaces, to bring the company’s portfolio to more than 300,000 sq.m.
Lucas said the increase in leasable space will allow the company to raise the portion of recurring income to 60 percent for the medium-term from the current 45 percent.
This year Eton expects to see its recurring income hit 50 percent of the total revenues.
Eton reported earnings of P75 million for the first quarter, 21 percent more than the P62 million generated last year.
Total revenues, however, fell 18 percent to P535 million, as revenues from the sale of residential units were lower, primarily because of completion of previously sold units.
Leasing revenues improved due to higher lease rates for the BPO office buildings that continue to enjoy full occupancy.
Construction is in full swing in projects started in 2016, including the fifth BPO office tower at Eton Centris in Quezon City, the expansion of the retail space at Centris Walk and Eton WestEnd Square, a mixed-use development along Pasong Tamo, Makati City.