Inevitable success

A low-key company is making waves, developing 25 housing communities in a span of only five years.

Laguna-based P.A. Alvarez Properties and Development Corp. has already developed 40 affordable housing communities, with 16 more under construction. Since its establishment about 24 years ago, it has built and sold about 19,000 housing units in Laguna, Batangas, Bulacan, Cavite, Pampanga, and Metro Manila.

 The company is building 15,000 more units in 25 new communities in the next five years which will generate up to P25 billion in revenues for PA Properties, which is currently capitalized at P3.3 billion.

 To achieve its target, PA must successfully leverage on its landbank of about 137 hectares and even add to it. Investing in more land now makes a lot of sense, especially with prices still going up and the current housing backlog at over 5.9 million housing units nationwide, with socialized and economic housing units accounting for the bulk.

 PA Properties estimates the housing backlog to reach 10.1 million units by 2030 in the socialized, economic, and low-cost housing segments. Socialized housing backlog is at three million units to date, and that for economic housing at 2.5 million units. This rising backlog is seen as the main driver of its growth in the coming years.

In 2017, the company posted P11.8 billion in total assets, which have been growing in the last two years at a compounded annual growth rate of 25.3 percent and has infused an additional P835 million in equity.

 It also posted a steady growth in sales at a CAGR of 22 percent from P1.33 billion in 2015 to P1.97 billion in 2017. Gross profit margin was fairly stable at 45 percent. It aims to continue growing housing sales at 22 percent CAGR in the next five years. 

 In 2017, PA Properties partnered with Osaka-based real estate developer Hankyu Hanshin Properties Corp., to develop three townships covering 54 hectares. Projected revenues from this is about P11.25 billion. They are planning to launch two to three projects yearly until 2023.

 Recently, a major investment house struck a deal to offer P1-2 billion in perpetual notes to raise additional capital for PA and for its expansion to parts of Batangas and Bulacan.

Doing the right thing

The Supreme Court en banc is being asked to review a decision rendered by a division in 2017 which could cost one of the country’s biggest banks at least P1 billion.

As can be seen in Sps. Chua vs UCPB decided by the SC in August 2017, spouses Felix and Carmen Chua in 1997 entered into an agreement with Gotesco Properties, represented by Jose Go, for the development of their 44-hectare property in Lucena.

Deeds of absolute sale were executed by the Chuas over 12 parcels of land in favor of Revere Realty, a firm controlled and represented by Go. But there was also a deed of trust confirming that the Chuas retained absolute ownership over the properties. A second deed of trust was signed covering another 20 parcels.

Prior to the execution of the JVA, the Chuas and Go had separate loans with the United Coconut Planters Bank (UCPB).

In June 1997, the Chuas executed a real estate mortgage in favor of UCPB covering several properties to secure P68 million owned by them and Lucena Grand Central Terminal Inc.

Unknown to the Chuas, Go, acting in behalf of Revere, and UCPB executed another REM involving the properties supposedly held in trust by Revere for the Chuas.

Later, UPCB foreclosed the mortgages with the Chuas and Revere and the properties were sold for P227.7 million.

In 2003, the Chuas informed UCPB that Go’s debts were mistakenly secured by a mortgage of properties they owned. They said the proceeds of the foreclosure sale should only be applied to the Chuas’ loan and that the rest should be returned to them.

UCPB did not heed the Chua’s request so they filed a complaint in 2004 with the Lucena RTC which ruled that the Chua properties were only held in trust by Revere and Go, nullified the REM between UCPB and Revere/Go, and ordered Revere/Go and UCPB to return to the Chuas the properties covered by the deed of trust.

The Court of Appeals in 2014 set aside the RTC ruling, but the Supreme Court Third Division in 2017 reversed the CA and reinstated that of the RTC. The decision was penned by then SC Associate Justice Lucas Bersamin and concurred in by Justices Alfredo Caguioa, Samuel Martires, Noel Tijam, and Alexander Gesmundo.

Chief Justice Bersamin now has the opportunity to correct a possible miscarriage of justice.

Stockholder and former UCPB board member Jesus L. Arranza, in a letter to the SC last Jan. 10, sought a review of the 2017 decision.

Arranza said it seemed impossible for Tijam, Martires, and Gesmundo to have properly studied and deliberated upon the case since they became members of the Third Division only on Aug. 13 and 14, 2017, and the decision was dated Aug. 16, 2017. Caguioa was on leave.

 Arranza said the constitutional requirement that there be deliberations on a case means there must be active discussion of the issues of the case, the arguments raised by the parties, the facts and the applicable laws, and the conclusions that were arrived at by the Justices in a session called for the purpose.

 He emphasized that SC’s own rules require that a written report on the case must be prepared by the designated writer and sent to all the justices concerned at least seven days before the case is discussed and deliberated upon.  

Bersamin and the other SC justices could still correct whatever wrong may have been done if and when the Office of the Government Corporate Counsel brings the matter to the SC en banc for review.

Bersamin and the other Third Division magistrates can hold their heads up high once the SC en banc validates and affirms their decision beyond a shadow of doubt.

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