TLDC turns focus on investor buyers to weather pandemic

By Denise A. Valdez, Senior Reporter

RESIDENTIAL PROPERTY developer Torre Lorenzo Development Corp. (TLDC) is targeting investor buyers as it seeks to weather the economic slowdown.

“We need to bring in revenues that would correct the expected slump starting July 2021. And how are we doing that? We’re looking at new sales channels that targets mostly investor buyers,” TLDC Chief Finance Officer Emmanuel A. Rapadas told BusinessWorld last week.

Mr. Rapadas described these investors as bulk buyers that are looking to take advantage of the slow real estate market at the moment.

The real estate market has seen a slowdown in sales since the lockdown began in mid-March, although restrictions have since been eased.

Mr. Rapadas said TLDC may see a 35-40% drop in gross revenues for 2020, but still maintain slim profitability. The company’s revenues reached P2.2 billion in 2019.

“Our sales are definitely taking a beating,” he said. TLDC has seen a compound annual growth rate of 47% from 2015 to 2019.

By tapping investor buyers, TLDC hopes to save about 12% of its usual expenses from marketing and selling. However, the company would have to give up some margins.

“Yes, we will have to sacrifice some margins. But also, this sales channel is more efficient,” Mr. Rapadas said. “At the moment, we’re working with our financial advisers and our lawyers for us to perfect that structure that allows for this investor type buyers to invest into Torre Lorenzo developments.”

TLDC currently has close to 10 projects under construction, comprised of university residences, lifestyle developments and townships. These projects will augment the company’s inventory, which is now down to P7-billion worth of projects that could last about two years of sales.

Turnover of new projects will start in 2021.

Despite the slowdown, Mr. Rapadas said he believes the market will prove resilient in the long run, as most of the company’s buyers are from the upper middle to high-end markets.

TLDC also remains bullish for its leisure segment, as it expects tourism to recover in the near term.

“Leisure pre-COVID (coronavirus disease) was one of the fastest growing sectors in the Philippines… Full recovery in the leisure sector will probably happen in 2023,” Mr. Rapadas said.

The company is currently building dusitD2 and Dusit Thani Lubi Plantation Resort in Davao, Dusit Princess Hotel Lipa in Batangas, and Torre Lorenzo Malate, which will have an Ascott-managed hotel. Leisure developments are expected to contribute about 30% of TLDC’s revenues starting 2023, from less than 5% at the moment.

The company is allocating about P7 billion for capital expenditures to support its pipeline of residential and leisure projects in the next few years.

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