Property developer Century Properties Group Inc. (CPG) has signed a deal to acquire half of the company that owns the low-rise tower of Pacific Star Building (PSB) in Makati, thereby growing its recurring income by investing in an existing office property.
This is the first time that CPG has invested in an existing property as most of its projects were built from the ground up. The deal indicated the company’s willingness to fast-track the growth in recurring earnings portfolio as a hedge against the cyclical nature of the residential property segment.
CPG said it had signed a memorandum of agreement on the purchase of a 50-percent stake in the company that owns PSB Low Rise located at the corner of Sen. Gil J. Puyat and Makati avenues “in line with its plans to diversify its revenue streams.”
The six-storey PSB Low Rise has more than 5,900 square meters of office space. Not part of the deal is the 29-storey high-rise Pacific Star Building built around a semicircular driveway and fountain.
“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,” said Kristina Garcia, investor relations officer at CPG.
The property firm said the deal was expected to contribute to the company’s recurring revenues as the building was fully leased out. CPG is acquiring half of the property by assuming the existing loan of PSB Low Rise.
Source: Philippine Daily Inquirer | October 27, 2014