Starmalls seen as major growth driver for Vista Land

MANILA, Philippines – The Villar family’s Starmalls Inc. is expected to be a major growth driver for Vista Land on the back of an aggressive expansion plan that will more than double its leasable office and mall space by 2018.  

This is according to listed financial services company COL Financial, which sees Starmall on a steady growth path to 2018.

“We forecast EBITDA (earnings before interest taxes depreciation and amortization) to grow at a compounded annual growth rate of 14.15 percent and net income to grow an average of 10.4 percent annually,” COL Financial analyst Richard Laneda said in a report.

Starmalls plans to increase its mall portfolio by expanding its existing malls and opening new malls in different areas.

To further power the expansion, Starmalls also plans to take advantage of the strong BPO sector by putting up offices beside some of its malls.

“This year, Starmalls will add 350,615 square meters (sqm) of GFA, 220,000 of which area already open. They plan to add 135,000 sqm of GFA in 2017 and another 300,000 sqm of GFA in 2018, bringing total GFA to 1.3 million sqm by end of 2018,” the report noted.

Moving forward, COL said that for this year and succeeding years, Starmalls would be a significant growth driver for Vista Land.

“Not only will its revenues grow faster than real estate sales but being a higher margin business, Starmalls will also accelerate the growth of EBITDA and net income. We forecast Starmall revenues to grow at a CAGR of 40.30 percent from P2.62 billion in fiscal year 2015 to P7.23 billion by full year 2018.

This is a lot higher than our CAGR estimate of 4.5 percent for the real estate segment for the same period.

Together, total revenues are estimated to grow at a CAGR of 9.45 percent from 2015 to 2018.

Nonetheless, the higher growth of the higher margin malls business will translate to faster consolidated EBITDA and net income growth for the company,” COL said.

Vista Land completed this year the acquisition of 88.34 percent of Starmalls as part of its strategic business move that would accelerate Vista Land’s transition to a fully integrated developer.