Eton Sees Income by Next Year
01/09/08
Publicly-listed Eton Properties Inc. (EPPI), the real estate arm of the Lucio Tan Group, expects to start realizing a positive bottom line beginning 2009 with several of its projects to start construction this year.
EPPI president Danilo Ignacio explained that the 10-month old company, which has launched 10 projects so far, has been losing money in its books because it has not began construction of any of its projects launched only late last year.
“Eton has zero realized revenue because we only realize revenues when we start construction. Even if we pre-sell everything but no construction has commenced, we will show a loss because revenues are realized as a percentage of completion of projects. But next year, that is when we start recognizing lots of revenues because most of the construction will then be in full swing. By next year, we will be posting a net income,” he pointed out.
EPPI launched yesterday its most ambitious project to date, South Lake Village at the 1,000-hectare integrated mixed-use township development Eton City in Sta. Rosa, Laguna. Considered as EPPI’s flagship horizontal project, South Lake is a masterplanned development covering about 150 hectares and is the first residential island lot concept in the Philippines.
South Lake Village will have 18 residential islands surrounded by a 35-hectare man-made lake. Each island, approximately one hectare in size, will have eight to 12 residential lots of about 1,000 sq.m. each.
Ignacio said South Lake Village is inspired by similarly themed developments around the world, including Foster City in San Francisco, Dubai’s Jumeirah, The Palm and The World, and Riversong in Shanghai. These developments are often referred to as among the eight modern wonders of the world and feature mixed-use communities surrounded by bodies of water.
Sta. Rosa, viewed by major property developers as the next growth area, is a prime center of business, commerce, and industry not only in Laguna but also in the whole Southern Luzon region.
EPPI is a prestige property development company specializing in high-end and mid-income luxury residences, state-of-the-art IT and BPO office developments, and township projects.
EPPI earlier announced it is spending P10 billion over the next five years to fund seven priority development projects in key cities in Metro Manila and in southern Philippines.
Ignacio said the required capital would be raised from additional equity infusion and sale of shares. But he said the developments at Eton City, which is EPPI’s ninth project, are not included in the P10-billion capex. EPPI, listed at Philippine Stock Exchange, is a consequence of Balabac Resources and Holdings Corp. that changed its primary purpose from a holding company to a purely property development firm.
Ignacio said the impressive success of EPPI is largely due to the huge land bank of the Lucio Tan Group, including land assets of Philippine National Bank, Allied Bank and Philippine Airlines.
Earlier, Tan himself said that while EPPI’s entry into property development may be considered by many as late, “we are just right on time.”