Cebu Landmasters Inc. (CLI) on Thursday said it could take up to three years before it joins the real estate investment trust (REIT) market, as it first tries to establish a track record for its hospitality business.
CLI chief finance officer Beauregard Grant Cheng said the REIT could come by 2025 or 2026, as he said laws require an ideal track record of three years covering occupancy rates, average daily rates, and revenues.
“Once we’re able to develop those track records across several more properties, then that will prime us or give us, again, the foundational assets by which we can put them in REIT,” he told reporters in Taguig City.
Cheng issued a similar statement in August 2021, saying the company’s hospitality segment would first have to gain traction before entering the REIT market, providing diversification from those with assets mainly in the National Capital Region and in Luzon.
The company is currently building hospitality projects in Mactan, Cebu, Davao, and Bacolod, which are set to have the records needed to go into a REIT in the next three years.
“They would have had at least one to two years worth of track record, some a little bit more, so that already gives us the right momentum to maybe launch or announce, ‘Okay, now we’re doing it and we’re going to start doing the corporate maneuvers to transfer assets into a REIT vehicle,” Cheng said.
CLI opened its first development in September 2019, the Citadines Cebu City, a 180-room condotel operated and managed by Ascott International Management Pte. Ltd.
The company’s product portfolio also includes residential, office, and estate properties covering the high-end, middle, economic, and socialized housing segments, with the hospitality and mixed-use assets to be included in the REIT.
“Maganda ‘yung REIT, walang VisMin player na may REIT. Of course, Robinsons has, Filinvest, Ayala, but their properties are national,” chief operating officer Jose Franco Soberano said.
“I mean like ‘yun, walang hotel REIT, so baka ‘yun, maging REIT ‘yun. We’re exploring,” he added.
(REIT is nice, since there is no VisMin player with a REIT. Of course, Robinsons has Filinvest and Ayala, but their properties are national. I mean, there is no hotel REIT, so that might be a REIT. We’re exploring.)
CLI is set to open three hospitality projects this year — The Pad, lyf Cebu City at the Base Line Center, and Citadines Bacolod City. It also targets an additional 4,000 square meters of gross leasable area (GLA) mainly from its Davao Global Township retail pads and convention center.
The company currently has a pipeline of P29.75-billion worth of projects expected to drive reservation sales this year, with three hospitality projects to be opened in 2022 — The Pad, lyf Cebu at Base Line Center, and Citadines Bacolod City.
It already has existing projects in Bohol, Cebu, Davao, Misamis Oriental, Negros Oriental, and Negros Occidental.
Shares in CLI closed Thursday at P2.49 apiece, down P0.14 from Wednesday’s finish of P2.63 per share. —VBL, GMA Integrated News