September 25, 2014

FLI revises plans for Cavite property, withdraws tax perks application

Filinvest Land Inc (FLI) has withdrawn its application for tax perks as a new business park developer for a project in General Trias, Cavite due to weak demand. The 22-hectare Asenso Village-Gen. Trias project was envisioned as a micro small and medium enterprise business park which would have provided a home/workplace for small entrepreneurs. However, of the 581 lots offered for sale since 2007, only 18 buyers have shown interest so far. FLI has instead revised the use of the property for a mixture of socialized housing and affordable housing project.

Our take: The project could have generated better margins given that it primarily involved lot sales. However, we believe that converting the land use into a socialized and affordable housing project will be more profitable for FLI as it will cater to the huge demand for affordable housing. This should also promote better asset utilization and profitability. We also note that if priced within a certain range, the socialized and affordable housing project should still qualify for tax incentives. In this light, we view positively FLI’s change in tack for the said property. – WealthSec