STARMALLS Inc., the commercial unit of Villar-led Vista Land and Lifescapes Inc., is still undecided on its next moves on whether to remain a listed company, after a new rule on the increase of minimum public float puts more pressure on the company.
When Starmalls, which mainly operates shopping malls for the mass market, was integrated into Vista Land early last year, officials said its initial plans were to delist the company from the Philippine Stock Exchange.
Those plans changed months later after Vista Land decided Starmalls, which has a free-float level of 10.3 percent, to remain a listed company as it can raise funds on its own to support its growth and other projects.
However, a Securities and Exchange Commission (SEC) decision to push through with moves to increase the minimum public float to 15 percent by 2018 and to 20 percent by 2020 increased pressure on Starmalls. Currently, the minimum public ownership stands at 10 percent.
“At this point, none yet because we’re still looking at Vista [on funding options],” Cynthia Javarez, the company’s CFO and treasurer, said in an interview when asked on the plans of Starmalls to remain listed.
“We will move but not now. There’s no commitment but we’re always open to that one,” Javarez added. “Our move will always be opportunistic whether we do equity or debt. At this point we’re still studying [the options to take].”
Other officials said the company cannot make any plans since talks on when the minimum public-float requirement would be imposed are still ongoing at the SEC.
Starmalls, along with Vista Land, earlier said it is on track to reach its target of 1 million square meters of gross floor area (GFA) of its commercial and shopping mall areas this year, as the company continues to expand its existing facilities.
Jerry Navarrete, the company’s president and CEO, said combined with the shopping malls of Vista Land, it currently has 952,000 sq m of space as of end of the first quarter.
“We are bullish for this year, considering our expansion programs on a very favorable Philippine economic backdrop,” Navarrete said during the company’s stockholders’ meeting.
Starmalls’s contribution to the increase in GFA, however, will come from the expansion of its current malls.
By 2018, Starmalls, along with those brands of malls under Vista Land, will have 1.3 million in GFA, a target which Navarrete said the company is also on track of hitting.
At the moment, its current mix of shopping malls as against the commercial space for the business-process outsourcing (BPO) firms stands at ratio of 80 percent to 20 percent.
By next year, however, as the company expands its current portfolio of malls, the share of the BPO space will go down to 15 percent.
The company said the establishment of BPOs will be “opportunistic” or when the need arises.
Most of the Starmalls’s shopping centers are located in populous areas where public transportation are available, such as those in Alabang in Muntinlupa and in Shaw Boulevard in Mandaluyong, which was one of the pioneer shopping centers in that area.
The Starmall brand caters to the broader C market, while the Vista malls serve the upper A and B market, where Vista Land already has properties, such as its mid-market subidivisions, depending on the location.
Last year the combined revenue of the Starmalls stood at P4.4 billion, up by 60 percent from the previous year’s P2.78 billion.
This year, the company said it is allocating some P9 billion in capital expenditures, mainly for the construction of its expanded properties, Navarrete said.