October 12, 2015

Vista Land and Lifescapes Inc (VLL to build second Vista City

In a disclosure to the Exchange today, Vista Land and Lifescapes Inc (VLL) said it will be spending P40b to develop Vista City in Iloilo. The project will be the company’s flagship development in the Visayas and will include malls, hotels, BPO office buildings and hospitals. It covers some 500 hectares on Panay Island and it is located near major universities and hospitals in the region.

Our take: The project was originally a residential development but VLL has transformed it into a mixed-use estate under the company’s Communicity concept. This will be VLL’s second Vista City project. The development of the first Vista City on VLL’s Daang Hari property is now in full swing and is expected to gather further momentum with the opening of the Muntinlupa-Cavite Expressway that rendered the property more accessible.

While we do not think that the two Vista City projects will immediately yield a significant base of recurring income, VLL’s Communicity concept should enable it to diversify its revenue sources and spur stronger growth in the long run given the higher margins created by investment assets. This also bodes well as far as investor sentiment is concerned and could lead to better valuations for VLL.

It remains to be seen however how the company plans to finance such big-ticket items as this can create near-term pressure on earnings due to potentially higher interest expenses (if financed through debt) or EPS dilution (in case of an equity issuance). – WealthSec