Arthaland Corporation (stock: ALCO) is set to inject an additional P18 million into its subsidiary, Bhavya Properties, Inc., as part of its ongoing investment in the luxury real estate sector. The capital will be directed towards the development of Eluria, an ultra-luxury residential condominium project located in Legazpi Village, Makati.
The investment will be made through the subscription of 180,000 preferred shares in Bhavya Properties at P100 per share. This move will help Bhavya meet its working capital requirements while ensuring compliance with financial covenants.
The Eluria Project: Luxury Redefined
Eluria is positioned as a low-density, ultra-luxury development that stands out in the highly competitive Makati real estate market. With only 37 exclusive units spread across 31 floors, it aims to provide a unique living experience. Each unit is meticulously designed by Sydney-based firm FMB Architects, known for their cutting-edge architectural and interior design work.
Beyond design, Eluria promises a premium lifestyle for its future residents. It boasts an array of high-end amenities, including a heated saltwater pool, a function hall for events, a children’s playroom, and a rooftop potager garden. The property also offers chauffeur-driven shuttle services to select nearby destinations, ensuring comfort and convenience.
Arthaland estimates that Eluria could generate a total sales value of P6 billion, reflecting the strong demand for luxury residential spaces in prime locations like Makati.
Strategic Partnerships and Ownership
Bhavya Properties, the developer of Eluria, is a joint venture between Arthaland and Singapore-based Narra Investment Properties. Arthaland holds a 60% stake in Bhavya, while Narra Properties owns the remaining 40%. This partnership highlights Arthaland’s strategic approach in collaborating with global investors to bring world-class developments to the Philippines.
A Shift in Focus: Demand for Residential Developments
The latest capital infusion follows an earlier investment of P45 million in Bhavya Properties in March, which also aimed to support the Eluria project. Arthaland's pivot towards residential developments is a response to changing market dynamics. With the decline in demand for office spaces post-pandemic, more companies are embracing remote work, leading to a significant drop in office space occupancy rates. In contrast, the demand for residential properties remains robust, driven by economic growth and the ongoing need for housing.
In a previous statement, Arthaland vice-chair and president Jaime Gonzalez emphasized that residential properties are becoming a key focus for the company, given the strong market demand. Eluria, alongside other residential projects such as Lucima in Cebu City and Una Apartments in Laguna, reflects Arthaland’s commitment to meeting the growing housing needs of Filipinos while maintaining its focus on sustainable and high-quality developments.
Financial Performance
Despite the positive outlook for its residential projects, Arthaland has faced some financial challenges this year. For the first half of 2024, the company reported a 61% drop in net income to P273.05 million. This decline is attributed to weaker demand in its office building portfolio, including flagship developments like Arthaland Century Pacific Tower and Cebu Exchange. Revenues for the same period fell by 23.74% to P2.57 billion.
However, Arthaland remains optimistic about its future, particularly with its continued focus on high-demand residential developments like Eluria. The company’s strong partnerships and strategic investments position it well to navigate market shifts and capitalize on the ongoing growth in the real estate sector.