Villar consolidates residential business under Vista Land

MANILA, Philippines - Vista Land & Lifescapes Inc., the country’s largest homebuilder, is acquiring Starmalls Inc. for P33 billion, a move that will allow the consolidation of the residential and shopping mall businesses of billionaire Manuel Villar.

Villar said the acquisition strengthens Vista Land as the country’s fourth largest integrated property developer and allows the company to seal  partnerships for self-contained communities.

“Our expansion will be a lot faster. This would strengthen the management capability of Vista Land and the commercial development of Vista Land. Now, we can put up more horizontal and vertical projects with commercial development. We can look at any property with more confidence and we would be closing more joint venture deals,” Villar told reporters in a briefing yesterday.

Vista Land CEO Manuel Paolo Villar said the acquisition would accelerate Vista Land’s transition to a fully integrated developer.

“This acquisition introduces a recurring revenue source that adds stability to our existing operations,” he said.

He said integrating both residential and commercial developments would enable the company to achieve higher selling prices, increased sales velocity and higher retail rental rates.

Under the deal, Vista Land will acquire a controlling 88.25 percent stake in Starmalls from the Fine Group, comprising shareholders affiliated with the Villar family.

Vista Land and Starmalls are both principally owned by the Villar family.

 The Fine Group will, in turn,  subscribe to approximately 4.6 billion new Vista Land shares at P7.15 per share or a 25.88 percent premium to Vista Land’s last traded price of P5.68 per share as of Nov. 9.

Vista Land will make a tender offer for the remaining Starmalls shares beginning  Jan. 4, 2016.  The offer is expected to be completed on Feb. 17.

 At present, Starmalls owns and operates 10 retail malls in key cities and municipalities, and two business process outsourcing, commercial centers in Metro Manila, with a combined gross floor area of 509,385 square meters.

Starmalls is currently building four retail malls and one BPO commercial center.

 After the acquisition, Vista Land’s total assets will increase by 29 percent to P158.9 billion.

The company posted a net income of P5 billion in the nine months to September, 18 percent higher than the year ago’s P4.2 billion. Revenues rose by 10 percent to P18.5 billion as sales grew to P42.7 billion.

Vista Land, which sells homes for as low as P500,000 per unit, has built more than 300,000 homes while Starmalls has built 22 commercial buildings.

Both have an established presence in 95 cities and municipalities across 35 provinces.