LUXURY CONDOMINIUM developer Century Properties Group, Inc. (CPG) has signed a memorandum of agreement to take a 50% stake in the company that owns the low-rise component of the Pacific Star complex in Makati City, which it hopes will expand its stream of recurring revenue.

In a statement e-mailed to reporters on Friday, CPG said the six-storey building, which it refers to as “PSB Low Rise,” has more than 5,900 square meters (sq.m.) of office space and is fully leased-out.

“We welcome the addition of the low-rise tower of Pacific Star Building into our portfolio given that it is already a revenue-generating asset,” Century Properties Director for Investor Relations Kristina Lowella I. Garcia was quoted in the statement as saying.

The building will be an addition to the company’s planned commercial portfolio of 160,000 sq.m. that may generate up to P1 billion worth of revenue upon completion in 2019.

“The company is acquiring the property by assuming the existing loan of PSB Low Rise,” the statement read.

PSB Low Rise, which complements the 29-storey high-rise Pacific Star Building at the corner of Sen. Gil J. Puyat and Makati avenues, was originally built by the Republic of Nauru, an island state in Micronesia.

CPG did not provide information on the company serving as the designated seller of PSB Low Rise. Company officials could also not be reached for comment.

In July, CPG Chief Financial Officer Jose Carlo R. Antonio had said the company is targeting a 15% to 20% contribution from recurring income by 2019.

Recurring income accounts for only 2% to 3% of the company’s earnings before interest, taxes, depreciation and amortization, he said.

By the end of the year, CPG will turn over Centuria Medical Makati, a 28-storey outpatient medical facility within Century City — its 3.4-hectare flagship development in Makati City.

Other recurring income streams in the pipeline are the luxury tower Century Spire in Makati City Asian Century Center in Bonifacio Global City, and the soon-to-be-launched Tower 6 of the Acqua Private Residences in Mandaluyong City.

Century Spire will house a combination of residential, office units and Asian Century Center — located in Makati City and Bonifacio Global City, respectively — are both office towers exclusively and are expected to benefit from the continuous growth of the business process outsourcing sector.

In the past 28 years, Century Properties completed 25 condominiums covering a total of 873,127 sq.m. and 8,777 units.

The company’s first-half net profit inched up 0.22% year on year to P1.058 billion, while revenue rose 6% to P5.62 billion.

On Friday, shares in the company closed at P1.08, down one centavo or 0.92%.

Source: Businessworld Online | October 26, 2014