Arthaland recalibrates as office demand dwindles
Arthaland recalibrates as office demand dwindles
Po family-led developer Arthaland Corp. will shift its focus toward residential projects due to the apparent decline in office space occupancy in the postpandemic era as more companies favor hybrid work arrangements.
Arthaland chair Ernest Cuyegkeng on Friday said they were taking more cautious steps toward pursuing office space projects.
“We are focusing on residential projects for the simple reason that we need to understand what is the full impact of work-from-home hybrid programs that many companies are implementing,” Cuyegkeng said during the company’s annual stockholders meeting.
Arthaland, whose flagship projects include office buildings such as Arthaland Century Pacific Tower and Cebu Exchange, booked a 17.7-percent increase in its top line to P984 million in the first quarter.
Of this, P713.78 million came from residential projects, while the office leasing business accounted for the rest.
According to Cuyegkeng, they are now seeing stronger demand for residential developments, “consistent with the continued economic growth and the fundamental need for housing among Filipinos.”
“We are being very careful in implementing projects involving office space. So, for that reason, we’ve got a strong focus on residential projects,” he said.
In the January to March period, real estate investment management firm Colliers Philippines noted a 19-percent office vacancy in Metro Manila as more occupiers opted not to renew their contracts.
‘Sustainable’
Currently, Arthaland has three residential projects catering to the middle-class and luxury segments: Eluria in Makati City, Lucima in Cebu City, and Una Apartments in Biñan, Laguna province.
The recently launched Una Apartments reached P4.2 billion in reservation sales as of May this year, according to Arthaland.
Meanwhile, construction for the 32-story Eluria has reached the 15th floor.
Arthaland’s net income in the first quarter reached P138 million, a 1.47-percent increase. Total assets grew to P37.8 billion from P37.3 billion due to an increase in real estate for sale from projects under construction.
In April, its board of directors approved a proposed P3-billion preferred shares offering. Arthaland has yet to disclose details about the issuance.
The developer, which claims to be the only real estate firm in the Philippines with a portfolio that is “100-percent certified sustainable,” aims to achieve full decarbonization of its portfolio by the end of the decade. INQ