Torre Lorenzo considers REIT via market listing

TORRE LORENZO Development Corp. (TLDC) is studying the possibility of launching a real estate investment trust (REIT) and listing at the stock exchange through an initial public offering (IPO) in the coming years.

TLDC Chief Finance Officer Emmanuel A. Rapadas told reporters last week the company is beefing up its portfolio to prepare for financial instruments that will turn it into a public company.

“At the moment, we’re talking with our financial advisors on how and when we will enter REIT,” Mr. Rapadas said. “We will get into REITs, it’s just a question of when.”

He also said the company was initially planning to do an IPO by 2021, but this would be moved due to the present market conditions.

“It was supposed to be 2021. But the problem is you also have to understand the general business conditions… (We have) our internal considerations as well,” Mr. Rapadas said.

“Nobody will go public now. Everybody is running away from the equities market. So when? We really have to play it by ear,” he added.

The Philippine Stock Exchange has been volatile in recent weeks due to the coronavirus outbreak, and has breached bear territory last week after reaching the 6,300 level. The main index closed at 5,793.94 on Friday.

TLDC is a local real estate developer whose assets are mostly premium university residences. It started venturing into the leisure business last year with the opening of the dusitD2 Hotel in Davao and private island resort Dusit Thani Lubi Plantation Resort.

The company recorded total revenues of P2.2 billion in 2019, 21% higher from a year ago, and a bottomline of about P190 million, up 15% year-onyear.

Mr. Rapadas said the company is allocating up to P7 billion for capital spending this year, which will fund the introduction of three new residential projects in Manila, Quezon City and Davao, and ongoing construction of leisure projects in Batangas, Pampanga, Manila and Davao.

TLDC is expecting to hit P2.3 billion in revenues and a net income of about P400 million by end-2020. Mr. Rapadas said the company’s target is to do an IPO once revenues reach P8 billion net income hit P1.5 billion.

“We believe we’re ready. Just a few more adjustments, we need to get to a certain level of revenues… But absent the market conditions, you should not do it… Probably when the conditions are ripe,” he said.