CPG, Mitsubishi form JV for affordable housing

CENTURY Properties Group, Inc. (CPG) has partnered with Japan’s Mitsubishi Corp. for the establishment of a company that will develop affordable housing projects that are expected to generate P57 billion in sales over the next five years.

The listed property developer on Wednesday signed a joint venture (JV) agreement with Mitsubishi for the incorporation of Phirst Park Homes, Inc. (PPHI).

PPHI, which will be 60% owned by CPG and 40% owned by Mitsubishi, will have an authorized capital stock of P5 billion. It will be incorporated once the deal is cleared by the Philippine Competition Commission (PCC).

CPG and Mitsubishi decided to form the JV company following strong demand from their first project, Phirst Park Homes Tanza, which was launched last year. The 26-hectare Cavite project offers a total of 3,000 units priced between P1 million and P3 million each.

To date, Phirst Park Homes Tanza has already sold out 98% of its first phase and 16% from the second phase. Reservation sales from the affordable housing project reached P1.4 billion in 2017, coming mainly from first- time homeowners within the Cavite area and from overseas Filipino workers.

Under PPHI, CPG and Mitsubishi will spend around P10 billion over the next five years for the launch of 15 projects with about 33,000 units. The company is currently in various stages of land banking for these projects, with seven properties already identified.

For this year alone, PPHI may launch two projects, one located south of Metro Manila and the other in Central Luzon.

“We’re looking at, at least two, based on the progress of our land acquisition, as soon as we get clearance from PCC... This will give us an initial footprint spread from both sides of Metro Manila,” CPG President for the affordable platform Ricky M. Celis said in a media briefing in Makati on Wednesday.

PPHI will be offering units sized 40 to 56 square meters, priced from P1 million to P6 million. Monthly amortization can range from P7,000- P8,000 and P15,000-P16,000, depending on the size of the project.

The company will target the first home- buyer market and OFWs for its projects. The Phirst Park Homes Tanza project, for instance, saw 45% of its sales coming from the OFW market.

“We decided to tap the first home buyer market, which demand right now is insatiable because really there are many people joining the middle class in the Philippines,” CPG Chairman and Chief Executive Officer Jose E.B. Antonio said during the signing ceremony.

For its part, Mitsubishi said the partnership will help address the estimated housing backlog of 6.6 million units in the country.

“We have experience from Japan, US, China, and other countries. Mitsubishi is ready to introduce the kind of construction materials, and our know how from Japan. We believe this will differentiate our products from what is available in the market,” Mitsubishi General Manager of ASEAN Urban Development Hidetoshi Suzuki said during the press briefing.

The P10-billion capex for the joint venture company will be funded through a mix of internally generated income and bank loans.