RBLAYRBLAYOTC
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Rommel Rodrigo: Ladies and gentlemen, good afternoon and welcome to Robinsons Land Corporation's First 9 Months 2025 Analyst Briefing. Joining us today are our President and CEO; Ms. Mybelle Socorro V. Aragon-GoBio; Mr. Faraday D. Go, Executive Vice President and General Manager of the Malls Division; Mr. Kerwin Tan, our Chief Finance Officer; and the rest of the Investor Relations team. I'll be your host, Mr. Ron Rodrigo. We will walk you through the company's financial and operational performance for the period. Presenting with us are Mr. Kerwin Tan and Mr. Ramon Rivero, Chief Strategies and Sustainability Officer. After the presentation, we will open the floor for the Q&A session. Thank you. Before we proceed, I'd like to draw your attention to this disclaimer. The information in this presentation is for informational purposes only. Certain statements may be forward-looking and actual results could differ materially due to various risks and uncertainties. We encourage you to review our disclosure and refer to our official filings for more detailed information. Now let's begin the presentation. Mr. Kerwin, you may start.
Kerwin S. Tan: Good afternoon. Thank you for joining Robinsons Land Corporation's earnings call. Kindly allow us to take you through our unaudited financial results for the first 9 months of the calendar year 2025. As previously highlighted, we remain committed to our Vision 5:25:50, our road map to sustain growth. This vision is anchored on 5 strategic levers designed to deliver PHP 25 billion in net income attributable to parent by RLC's 50th year. These 5 levers, as shown on the slide, form the foundation of our Vision 5:25:50 driving RLC towards sustained profitability and long-term value creation. For the first 9 months, RLC's asset portfolio continues to grow in scale and diversity that now includes 56 operational lifestyle centers serving as hubs of commerce and community, 134 residential developments are currently active covering both vertical and horizontal projects. 32 office developments anchored by our strong presence in Metro Manila and key provincial cities, 33 destination estates and mixed-use developments driving land value creation, 27 hotels and resorts across 9 brands, 13 work.able centers and 13 industrial facilities supporting the rise of e-commerce and supply chain growth. For the 9-month period ending September 30, 2025, RLC sustained its growth momentum posting solid results. Consolidated revenues reached PHP 35.61 billion, up 13% year-on-year propelled by the robust performance of both investment and development portfolios. EBITDA rose 7% to PHP 19.03 billion while net income attributable to parent climbed 10% to PHP 10.17 billion excluding a onetime gain recognized in the prior year. On the balance sheet side, total assets expanded 4% versus end 2024 to PHP 273.2 billion. Total liabilities contracted by 8% to PHP 1.96 billion largely reflecting the full settlement of maturing obligations, which in turn lowered total debt by 21% to PHP 41.91 billion. Total equity strengthened 12% to PHP 411.24 billion with parent equity likewise up 12% to PHP 173.86 billion. From a cash flow perspective, RLC generated PHP 19.94 billion in operating cash flow, raised PHP 13.96 billion from 2 successful block placements and invested PHP 15.19 billion in capital expenditures to support ongoing developments and future growth. Earnings per share for the 9-month period stood at PHP 2.11 per share. RLC delivered another strong quarter in the third quarter 2025 building on its year-to-date momentum. Revenues reached PHP 12.58 billion, a 5% increase quarter-on-quarter and 25% higher year-on-year driven by sustained growth across both investment and development portfolios. EBITDA came in at PHP 6.5 billion, up 4% from the previous quarter and 17% from the same quarter last year. Consequently, net income attributable to parent rose by a remarkable 19% year-on-year growth to PHP 3.3 billion demonstrating enhanced profitability from core operations. From a financing and investment standpoint, operating cash flow for the third quarter was PHP 6.65 billion. RLC generated PHP 7.75 billion in proceeds from another successful block placement during the quarter, second for the year, and deployed PHP 6.01 billion in capital expenditures, consistent with its long-term growth plans. Earnings per share for the quarter registered at PHP 0.69 per share. For the first 9 months of 2025, RLC reported consolidated revenues of PHP 35.61 billion, reflecting a 13% increase year-on-year and a notable 25% growth compared to the same quarter last year. This robust top line performance was driven by the continued momentum across our investment portfolio, particularly malls and offices alongside the continued recovery of the residential segment. EBIT grew 7% year-on-year to PHP 14.53 billion and was 21% higher versus the same quarter last year. The EBIT growth lagged revenue expansion due to higher utility expenses and additional depreciation from newly opened properties. Despite the slower EBIT growth relative to revenues, net income attributable to parent rose 10% to PHP 10.17 billion for the first 9 months period excluding the PHP 730 million gain for the investment reclassification in 2024. Net income for the current quarter ended at PHP 3.3 billion, up 19% versus the same quarter last year. The improvement was supported by lower effective tax rate following the infusion of additional assets into the REIT company during the quarter. Overall, these results underscore RLC's resilience and ability to sustain profitable growth backed by its diversified portfolio and effective execution of strategic initiatives. RLC's portfolio remains strategically weighted towards its investment portfolio, which continues to serve as the company's core revenue and earnings driver. For the first 9 months of 2025, the investment portfolio contributed 74% of total consolidated revenues and accounted for 83% and 78% of consolidated EBITDA and EBIT, respectively. This strong performance reflects the steady and recurring income generated by our mall and hotel properties, which comprise the bulk of the investment portfolio. Additionally, the offices and logistics segments provide meaningful contributions further reinforcing the stability and resilience of this portfolio. Meanwhile, the residential segment sustained its recovery trajectory. Realized revenues for the first 9 months were largely driven by the recognition of sales from prior years as more contracts reached the equity threshold. This carried forward the positive momentum for the development portfolio. Focusing on the third quarter. Consolidated revenues reached PHP 12.6 billion marking a significant 25% year-on-year increase and net income attributable to the parent stood at PHP 3.3 billion, a 19% increase from the same quarter last year. The residential segment emerged as the quarter's key growth driver with revenue surging by 247% year-on-year. This sharp increase was fueled by the recognition of previously booked sales as more contracts reached the equity threshold thus leading to larger conversion of standby revenues. Meanwhile, our malls and hotels maintained their upward trajectory delivering sustained year-on-year growth and office revenues recorded consistently. Overall, the investment portfolio remained the dominant contributor accounting for 72% of consolidated revenues in the third quarter. This reaffirms the portfolio's role as a resilient and recurring income source complemented by the strengthening recovery of the residential business. In September 2025, Robinsons Land successfully completed its fourth block placement of sales in its REIT company, RCR, marking it the largest fundraising transaction for a sponsor of a REIT company in the Philippines Stock Exchange. As of the third quarter this year, we sold a total of 1 billion common shares at a transaction price of PHP 7.75 per share raising proceeds of about PHP 7.75 billion exclusive of taxes and fees. This transaction lowered RLC's ownership in RCR from 65.6% to 60.5%, creating additional headroom for additional asset injections in the interim. The placement received strong investor demand being 3.7x oversubscribed against the base deal size of PHP 4 billion or roughly $70 million, a clear indication of continued market confidence in the RCR's portfolio quality and long-term prospects. The offer attracted a diversified mix of qualified buyers composed of 80% domestic and 20% foreign investors. Overall, this successful placement not only reinforces investor confidence in RCR as a REIT platform, but also strengthens RLC's balance sheet providing additional financial flexibility to fund ongoing and future developments. RCR continues to strengthen its contribution to the group's consolidated financial performance and in view of its growing relevance, we would like to share key highlights covering its financial results, portfolio composition and total gross leasable area. In September 2025, RCR issued 3.83 billion shares to RLC at PHP 8 per share in exchange for 9 malls with a total transaction value of PHP 30.67 billion. This infusion expanded RCR's portfolio to 38 premium assets comprising of 17 offices and 21 malls with combined gross leasable area of 1.15 million square meters. For the first 9 months of 2025, RCR contributed PHP 7.62 billion in revenues representing 21% of RLC's consolidated top line. EBITDA rose by 28% year-on-year reflecting the platform's strong operating efficiency and sustained rental performance. Net income likewise grew 28% to PHP 5.84 billion accounting for 39% of RLC's consolidated net income attributable to parent. Dividends per share also improved by 6% compared to the same period last year demonstrating enhanced shareholder returns. These gains were largely driven by the successful infusion of the 9 malls this year along with the full period contributions from properties infused in the third quarter of 2024, further boosting RCR's income-generating capacity. As of September 30, 2025, RCR's portfolio comprises of 38 premium assets with 17 office properties and 21 malls strategically located across 18 unique key locations nationwide. Occupancy across the portfolio remains very high at 96%. Moreover, RCR maintains a healthy weighted average lease expiry of 4.07 years. This provides strong income visibility and long-term stability. In terms of tenant mix; 46% of lease space is occupied by BPO companies, another 46% by retail banners and 4% each for traditional office users and office CPC underscoring a well-diversified and demand resilient portfolio. RCR continues to be a vital contributor to RLC's recurring income and serves as a strategic platform for future asset monetization and capital recycling. I'll now turn you over to Mr. Ramon Rivero for the operational highlights per business unit.
Ramon Rivero: Thank you, Mr. Kerwin Tan. In the first 9 months of 2025, I am pleased to share that we continued to build on our growth trajectory posting total revenues of PHP 14.55 billion, an 11% increase from the previous year. This momentum was anchored by strong rental performance with rental revenues reaching PHP 10.27 billion, up 10% driven by a steady 7% same mall rental growth and sustained recovery in foot traffic across our portfolio. Our profitability also strengthened with EBITDA rising to PHP 8.78 billion and EBIT reaching PHP 6.10 billion reflecting year-on-year increases of 11% and 14%, respectively. Operational performance remains solid as we maintained 94% occupancy, higher than the industry average of 92.3%. Today, Robinsons Malls spans 1.7 million square meters of leasable space, underscoring the continued confidence of our tenants and the resilience of our consumer activity. For RLC Offices, we sustained a stable performance in the first 9 months of 2025 generating PHP 6.24 billion in revenues, up 5% year-on-year. This growth was supported by consistent rental escalations across our expanding portfolio of premium office developments. Our EBITDA climbed to PHP 4.93 billion while EBIT reached PHP 4.06 billion, both up 3% underscoring our strong operational efficiency. This reinforces our view that our offices have already bottomed out and are on a positive trajectory towards further growth. Occupancy improved by 100 basis points to 88% driven by the entry of new tenants. BPO firms remain our key anchors accounting for 81% of total occupancy while our WALE stands at 4.11 years reinforcing the long-term stability of our recurring income. In the third quarter, we proudly opened new work.able centers in Robinsons Summit Center 3, Robinsons Summit Center 4 and GBF Tower 1, adding 770 new seats and bringing our total to over 3,200 seats. This expansion reflects our commitment to flexible workspace solutions and supporting the evolving needs of businesses. For Robinsons Hotels and Resorts, we delivered a 10% increase in revenues reaching PHP 4.74 billion driven by strong performance across all brands, particularly our international hotel partnerships and flagship 5-star properties, Fili and NUSTAR. Our system-wide occupancy stood at 66% reflecting sustained travel demand and strong guest volumes. EBITDA grew 12% to PHP 1.43 billion while EBIT rose 11% to PHP 764 million supported by enhanced operating leverage. Notably, around 70% of total revenues came from our international brands and luxury hotels highlighting our strategic shift towards higher yield assets. With the opening of NUSTAR last May, RHR's portfolio now includes 27 hotels with over 4,000 room keys, further solidifying our presence in the hospitality sector. In the first 9 months of 2025, our logistics and industrial facilities generated PHP 661 million in revenues, up 2% year-on-year. Our EBITDA reached PHP 600 million while EBIT stood at PHP 438 million reflecting the continued strength of our operations. We now operate 13 industrial facilities across strategic logistics hubs in Luzon, maintaining a stable occupancy of 88% and healthy tenant demand across the portfolio. Now for our residential division, we delivered strong results in the first 9 months of 2025 posting PHP 4.06 billion in net sales from organic projects, up 30% year-on-year and an additional PHP 2.29 billion from joint ventures. Our realized residential revenue surged in the third quarter rising 247% year-on-year to PHP 3.11 billion driven by the recognition of prior year sales that reached the equity threshold. This momentum brought our realized sales to PHP 7.84 billion representing a 76% increase year-on-year. Profitability also accelerated significantly with EBITDA up 185% to PHP 1.98 billion and EBIT soaring 207% to PHP 1.87 billion. In addition, equity earnings from joint ventures contributed PHP 912 million during the first 9 months. In the first 9 months of 2025 for our Destination Estates segment, we generated PHP 674 million in property development revenues from deferred land sales to our joint ventures. Our EBITDA reached PHP 399 million while EBIT stood at PHP 395 million reflecting steady performance from our estate development activities. Last July 17, we at Robinsons Sports Entertainment and Recreation together with Cosma Athletic Ventures Corporation hold a groundbreaking ceremony for the Helios Pickleball Center in Bridgetowne. The 8-storey facility will span over 17,500 square meters of gross floor area and will feature 25 professional grade courts, including a stadium court designed for major events and tournaments. It will also house 6 floors of sports and recreation facilities such as gyms, sports clinics and food and beverage outlets while 2 basement levels will be dedicated to parking. With estimated 1,000 daily foot traffic, we are positioning the Helios Pickleball Center as a potential venue for the Professional Pickleball Association tour paving the way for the Philippines to host international tournaments in the future. In the first 3 quarters of 2025, we spent PHP 15.20 billion in capital expenditures, in line with our strategic pipeline of developments across malls, hotels, offices, logistics facilities, land banking and residential projects. This disciplined investment approach reflects our commitment to long-term growth and continued portfolio diversification. For the first 9 months of 2025, we successfully paid PHP 13.80 billion in matured debt, a key step in strengthening our balance sheet and ensuring financial flexibility. Through efficient cash management, we deem it proper to pay our maturing debt to save on interest expense and improve our cash flow. We will borrow only when the need arises. As of September 30, 2025 our total debt stood at PHP 42.10 billion composed of PHP 24 billion in bonds and PHP 18.10 billion in bank loans, of which PHP 2.40 billion is short term and PHP 15.70 billion is long term. Our weighted average loan maturity remains comfortable at 2.1 years and our effective interest rate stands at 5.8% reflecting prudent debt management. With 73% of our borrowings under fixed interest rates, we continue to mitigate exposure to interest rate volatility while maintaining a manageable debt maturity profile in the coming years. For Robinsons Malls, we are on track to expand our total gross leasable area from 1.67 million square meters in 2024 to 2.49 million square meters by 2030 representing a 50% cumulative increase over the period. This year we opened Robinsons Pagadian and will complete Bagong Silang. By 2027, our GLA is expected to grow to 1.97 million square meters driven by the openings of Tanay and Antipolo Expansion 2. 2029 will mark a major growth milestone with a 15% growth in GLA through 5 new malls and 2 expansions with locations in Paranaque, Sierra Valley Estate, Visayas and Mindanao and North and South Luzon. And by 2030, we aim to reach 2.49 million square meters with the addition of 3 new malls and 3 expansions. Again, these developments underscore our long-term commitment to sustainable growth and a stronger regional presence across the country. For Robinsons Offices, we are set to significantly expand our net leasable area from 793,000 square meters in 2024 to 1.28 million square meters by 2030, a 61% increase over 6 years. In 2025, the completion of GBF Center 2 and Cybergate Iloilo 3 will boost our footprint by 13%. We will sustain this momentum through 2026 with Cybergate Dumaguete and by 2027, the addition of Asscher Tower and Davao 1 will bring our NLA to 969,000 square meters. Further growth in 2028 and 2029 will be driven by Trilliant, Bridgetowne 1, Marquis and Davao 2, taking us past the 1.1 million square meter mark. And by 2030, we aim to reach 1.28 million square meters with the completion of Peruzzi Tower and Davao 3. This expansion underscores our strategy to strengthen our presence in key business districts and emerging regional centers across the country. On the logistics front, RLX is on track to more than double our gross leasable area from 295,000 square meters in 2024 to 619,000 square meters by 2030 representing a 110% increase over 6 years. In 2025, we will grow our footprint by 11% with new facilities in Taytay and Calamba 2E. By 2026, we expect a 15% expansion through new developments in Montclair 1, Calamba 3A and Sierra 3. Our capacity will further expand to 436,000 square meters in 2027 with new sites in Misamis Oriental, Cebu 1, Santa Rosa 1 and [ Panglao 1 ]. Over the next 3 years, we will continue building across Visayas and Mindanao culminating in 619,000 square meters of total GLA by 2030 through projects in Southern and Central Luzon. This aggressive pipeline underscores our strong commitment to supporting logistics and industrial growth in strategic locations nationwide. And lastly, for our Robinsons Hotels and Resorts, we are pursuing an equally strong growth trajectory expanding our portfolio from 4,243 rooms in 2024 to 5,681 rooms by 2030, a 34% increase over the period. In 2025, we will open NUSTAR Hotel followed by Summit Villas Siargao in 2026. These openings will be complemented in 2027 and 2028 by key additions such as Grand Summit Cebu, Fili Hotel Bridgetowne and Grand Summit Pangasinan, which will bring our room inventory past 5,200. By 2029, the opening of Grand Summit Bohol will mark a major milestone for Grand Summit brand, an additional 220 room jump in room capacity. And finally, the completion of Grand Summit Davao in 2030 will take us to 5,681 rooms, expanding our total footprint in both established and emerging travel destinations. Through all these developments, we are reinforcing our position as a leading Filipino hospitality brand creating properties that elevate guest experiences, support local tourism and deliver long-term value to our stakeholders. This ends our presentation and we are now open for your questions.
Rommel Rodrigo: Some housekeeping rules for the Q&A. To ask a question, please use the raise hand or the Q&A box. When your name is called upon to ask the question, please state your name before proceeding to the queries. The first question goes to Jelline.
Jelline Gaza: This is Jelline Gaza again from JPMorgan. My first question relates to the JV earnings. We noticed that it's a little bit soft for the last few quarters. Can you give or shed more light about the trends that are going on here? How much is unbooked profit so far, unsold inventory? And what are you seeing in terms of cancellation trend as well as sentiment given the recent corruption scandal? That's my first question.
Maria Socorro Isabelle Aragon-Gobio: Jelline, this is Mybelle. The sales of our JV projects have been soft in the past quarter. Cancellations have not been alarming. They're still the usual rate. So given the corruption scandals, we do see some form of softening in that particular segment. However, we actually are going to be starting to turn over the first tower of our joint venture with Hongkong Land by the first half of next year. We believe that sales should pick up again.
Jelline Gaza: Would you be able to share the unbooked profits to date and the value of unsold inventory from the JV earnings?
Kerwin S. Tan: The standby revenue is PHP 49.4 billion revenues. Standby revenues for RLC's share is PHP 9.9 billion.
Jelline Gaza: And in terms of profit?
Kerwin S. Tan: In terms of profit, it's about PHP 1.7 billion.
Jelline Gaza: Okay. Understood. My second question relates to the mall revenue growth. We noticed that it's pretty strong at almost midteens. What do you think you are doing differently than peers and are there any updates on the renovation, extent of expected works and any disruptions expected from these initiatives?
Faraday Go: Well, our revenue growth for the existing malls, it's coming from 3 main sources. One is the increase in the fixed rent, the second one is the increase in occupancy and the third is the increase in tenant sales. Okay? So those 3 are all contributing to the increases in our revenues for the same malls. And then aside from that, we also have our new malls, which are also contributing to all those 3 factors for our new malls. Your second question was on the expansion, the renovations. So we have ongoing renovations for several malls like Dumagete, Abaco, Manila; and these are all strategically done so that to minimize the effect on our existing operations and rental for those malls.
Jelline Gaza: And lastly, would you be able to share the lease-out rate or preleasing commitments for GBF Center 1, Center 2 and Ilolo 3, please?
Ramon Rivero: So for GBF 1 actually year-to-date, we're almost near 80% leased. For GBF 2, we're looking around 60% preleased while Ilolo 3 is around 25% preleased.
Rommel Rodrigo: The next question goes to Renz from CLSA.
John Renz Alvarado: So this is Renz from CLSA Philippines. So I just want to ask about the capital recycling program. So I think the company made roughly PHP 14 billion worth of block placements in 2025. Would you be able to share some broad guidance on the amount of private placement proceeds for 2026 onwards? That is to say is the PHP 14 billion of proceeds something that is sustainable moving forward? And considering that guidance, how will this shape up your capital allocation decisions considering the excess cash flows? So will the company prioritize expanding CapEx, increasing payout or buybacks? So that's my first question.
Kerwin S. Tan: Renz, this is Kerwin. Just to answer your question, guidance on how much can we raise this year. Unfortunately, we usually do not provide guidance because it will depend on the timing and [ quotes ] that will subscribe to if ever we do a block placement. So in terms of usage of capital, the capital that we get from the placements, of course we will be flexible on it. It will depend on the need. If there is no need, we will pay down debt. If there's need for CapEx, we will allocate CapEx according to the revenue or plus EBITDA contribution of that particular business unit. And also of course that will provide ample room for us to provide more buybacks and dividends.
John Renz Alvarado: Okay. Understood. On the uninfused leasing assets, this is still related on capital recycling. May I ask what the yield on cost is for the malls, offices, hotels and industrial warehouses?
Kerwin S. Tan: Renz, we usually do not provide that figure for public consumption.
Rommel Rodrigo: Next on the raise hand is Mr. Carl Sy from Regis.
Carl Stanley Sy: Let me just check if you can hear me.
Rommel Rodrigo: Yes, we can hear you loud and clear.
Carl Stanley Sy: So I have some questions, some of which are related to the items asked by Jelline. So I'll start off with the mall business. So it was mentioned that some of the reasons for an increase in the mall revenue was, let's say, increase in occupancy and expansion of the portfolio. Now for the third quarter in particular, it looks like mall revenue was up 7% quarter-on-quarter and the portfolio size is the same as was occupancy. So is it fair to say that actually tenant sales improved substantially quarter-on-quarter in the third quarter? And if so, I'd be interested in what you would -- if you can give color on which types of tenants happen to be strong or were there particular areas of malls that were particularly strong?
Faraday Go: Carl, if I can add to that to the answer earlier. So aside from what we mentioned earlier, another thing we're doing also is we're trying to maximize the revenue of our current assets. So we do see if we have a tenant that's not performing that well, we try to replace it with a more high performing tenant. One other thing that we're doing also is we're increasing the F&B mix, which delivers a higher rent per square meter as against, say, another mix that would be of lower rent. Another one is we are converting some of our cinemas into retail spaces that allow us to generate also a higher return for the space.
Carl Stanley Sy: This is very helpful. And let's say I guess over the past year or let's say 9 months this year versus 9 months last year and even 3Q this year, it looks like mall margins have expanded quite substantially. It was mentioned in some previous briefings, you attribute at least part of that, maybe most of that to reining in utility costs. Is that still the case? Is it mostly because of utility costs?
Faraday Go: Yes. You're saying the margins increase. Yes. Basically the utility cost is one of our major expenses that affect the margins, yes. It's still a major cost of when we sign up to a new contract with a higher or lower deficit.
Carl Stanley Sy: Understand. And is there anything else notable that would help drive up the margins?
Maria Socorro Isabelle Aragon-Gobio: It would be efficiencies that we adopt across the different malls helping in improving our margins. As to the point of Faraday about the utility cost, power in particular; whenever the power cost increases, we also try to defer or to mitigate the impact by also correspondingly increasing our CUSA that we charge to our tenants so that we're able to maintain our margin spread.
Carl Stanley Sy: Sorry, it was a little choppy. Could you repeat that something about CUSA?
Maria Socorro Isabelle Aragon-Gobio: Yes. So when the power rate increases, we experienced that in some months in the past 2 quarters. We had to increase our CUSA that we charge to our tenants so that we're able to maintain our margin spread.
Carl Stanley Sy: Got it. Okay. That's very helpful. That's it for the mall business. I'll ask about the residential segment this time. So Jelline asked a couple of things and I might have missed it. Did you provide the unsold inventory of JV projects?
Kerwin S. Tan: Sold inventory of the JVs is PHP 16 billion.
Carl Stanley Sy: PHP 16 billion. Great. And so for the JV projects, one of the things mentioned in previous briefings was that it was easier to sell large units and you have a lot of small units left. Is there anything you can do about that or what have you been trying to sell those more quickly?
Maria Socorro Isabelle Aragon-Gobio: We are trying to sell the remaining smaller units via payment schemes. So we offer more attractive discounting for those particular units and then typically, those unsold units tend to go faster as we approach the turnover of the building. So like I was also mentioning when Jelline asked about it. One of our joint venture projects, one with Hongkong Land, Velaris; the first tower is scheduled for turnover by the first half of next year. So we believe that that should help in moving the remaining inventory.
Carl Stanley Sy: Got it. And then on your stand-alone projects this time. So the reservation sales for stand-alone projects fell on a quarter-on-quarter basis. Just checking, you still have the same promo, right, a buyer can purchase and pay evenly over 10 years for RFOs. So what would you attribute the decline then quarter-on-quarter for sales of stand-alone projects?
Maria Socorro Isabelle Aragon-Gobio: It's a combination of our having to rebuild our sales force. We've had to both rightsize and also to make it a more efficient organization. We are now on a massive hiring mode trying to rebuild the [indiscernible] on the property specialists, the real sellers. So that's one. And then we're also doing targeted international marketing deployments. We've also strengthened our international marketing team so they're now deployed to UAE, Singapore, North America where we have always been able to generate strong sales. And then domestic sales teams have also been reorganized so that they are focusing on specific projects.
Carl Stanley Sy: And let me clarify. So that's something, let's say, there's a reorganization that happened in 3Q and that's why sales fell and then you expect 4Q and onwards to be better? Do I understand correctly?
Maria Socorro Isabelle Aragon-Gobio: Well, that and also what was driving much of the growth for residential sales in the previous quarter was really the RFO. The one that you mentioned was the lease-to-own. We have substantially sold off some of the inventory for RFO and we've also refocused on reselling, which is a more challenging effort. But as we do all of these combined efforts, we believe that the next quarter we should be able to post higher sales.
Carl Stanley Sy: Understand. And I believe there are a lot of buildings due for completion I guess within the next year? So really, you'll have a lot more RFO coming up essentially?
Maria Socorro Isabelle Aragon-Gobio: Yes.
Carl Stanley Sy: Okay. And then I'll ask about residential revenue this time so for the third quarter picked up quite substantially and it was mentioned that there are more contracts that reached the equity threshold. And so particularly for the third quarter, it was a very large jump and I'm just curious should I think of that as a new normal or it was actually a blip, it should actually come down. I think it was mentioned earlier this year that we are supposed to see better growth of residential revenue starting next year because of timing. And I wanted to check if in fact it was earlier like it already started as early as the third quarter or we should still see a good amount of growth for 2026 residential revenue?
Maria Socorro Isabelle Aragon-Gobio: I think the trend will continue for the fourth quarter and the ensuing quarters. The third quarter recognitions are mainly from the 2021 presales reaching the equity threshold. And that coupled with the projects that we will be turning over in the succeeding quarters should contribute to the sustained growth of our realized revenues from the residential projects.
Rommel Rodrigo: Our next question on the raise hand is Rafi Mendoza from Raymond.
Rafael Mendoza: Again, going back to the residential segment. May I know which locations are most of your 5,333 inventory currently at? Is it mostly in Metro Manila?
Maria Socorro Isabelle Aragon-Gobio: It's mostly in Metro Manila, yes.
Rafael Mendoza: Okay. And I noticed also that EBIT margin for residential was quite -- there's been some compression. Is it more a function of the discounting of the RFO units sold, which led to some margin compression as of 9 months '25?
Maria Socorro Isabelle Aragon-Gobio: The EBIT margins are still consistent first quarter to third quarter, they are at 23% to 25% for the organic projects.
Rafael Mendoza: Okay. So I would think it's from the JVs.
Maria Socorro Isabelle Aragon-Gobio: Yes. So to answer your question, It's not from the discounting that we had launched for the focused marketing of our RFOs.
Rafael Mendoza: Okay. So what may be the reason for some compression? And I would think it's from the JV projects being sold.
Kerwin S. Tan: It's the contribution from the JVs. Yes. If you can see the JV contribution for revenues.
Rafael Mendoza: Okay. So the JV contribution. Okay. I understand. And for offices as well, I mean it's not so substantial the dip in EBIT margin, just 1.9 percentage points on a 9-month basis. May I know the reason also for the compression?
Kerwin S. Tan: It's a function of higher input costs such as contracted services and power and also added the depreciation of the new buildings.
Maria Socorro Isabelle Aragon-Gobio: Commissions because our wonderful team was able to close a lot of it. [indiscernible] pay our commissions.
Rafael Mendoza: Got it. So from commissions as well. So I would assume this level is pretty much going to be the level for next year?
Kerwin S. Tan: It should improve. While we're improving efficiencies, I think it should improve slightly back to what it was before this quarter.
Rommel Rodrigo: The next on the raise hand is Jon Ogden from Eastern Value.
Jonathan Ogden: I've got 2 or 3. The first couple are sort of related. You've got plans to increase your gross floor area in all sectors quite substantially and as 50 years as a company kind of target and so forth. But rival companies also have aggressive plans to raise their gross floor area. So there's a danger there to sort of have this plan which is all laid out and you can look at rivals, they have their plans. So the danger is overbuilding and so that's something you have to be aware of. I just wonder what your thoughts on that. Is there really going to be enough business for everybody in offices, malls and other areas like your hotels and so on? And related to that is do you really think the strategy is correct, which is to emphasize investment properties and just have development properties as a kind of smaller sideline given you can react to the market much faster and recycle your capital faster and go slower or faster depending on what's happening in the market whereas your malls you kind of lock in for these long periods and it's a long payback. As I say, they are these rivals, the [ SMA ] and so on who also have their aggressive plans. So that's one question. The other one is if you look at your REIT, it's now exactly double the market cap of the parent company, which is a kind of odd situation. The yield is just a bit higher on the REIT, but the REIT is trading at book value and Robinson Land is trading at 0.4 book value. So why is that? I mean it seems like the market is prepared to pay up. For the REIT's assets, they're prepared to pay book, but they're not prepared to pay book for Robinson Land. So that suggests that the assets not in Robinson, the REIT are inferior. So maybe you can shed some light on that. And then just the other one is if you could give us a bit of color on what's happening in the office segment in general with we've got AI coming in, if that's affecting anything in either a negative or positive way? And any general thoughts on where we are now with post POGOs and how BPO demand is going and overall in the market with supply and demand.
Maria Socorro Isabelle Aragon-Gobio: There were 4 questions. The first 2 I will tackle, the third I'll pass on to Kerwin and the fourth to James. Okay. So for the first, the growth that we are playing out in our pipeline, whether there is enough of a market to absorb this, I believe so. For Robinsons Malls, maybe we can start off with that. As you know, the Philippines is a consumption-driven economy. We are geographically fragmented. There's still a lot of Tier 1, Tier 2 cities in the Philippines that are still unserved or underserved. And so Robinsons Land is typically the first mover in these areas. So we believe that this playbook will still hold and can be a sustainable growth path for Robinsons Malls. For Robinsons offices, we likewise believe that we have reached an inflection point. It has bottomed out and in fact we have been getting a lot of preleasing requirements, expansion requirements as well. We are of course very careful in our expansion plans, striking a balance between doing speculative builds and build-to-suit builds. This for us is a realistic expansion for the Robinsons Offices. For logistics, it has been sustainably strong so that's why we had projected 2x growth for the business. For hotels and resorts, we are confident that the 25% increase in our keys is on the conservative side of the realistic scenario. And so we are also banking on the improvement of our tourist arrivals as government efforts towards simplifying the visa requirements and also rolling out the VAT coupon system will take place. So we're confident that this will be a sustainable pipeline. Now for the second question?
Jonathan Ogden: Was that the one about your 0.4x book versus REIT trading at 1x book?
Maria Socorro Isabelle Aragon-Gobio: Maybe Kerwin can take that one.
Kerwin S. Tan: Okay. So RCR now trades at about PHP 140 billion of market cap. So RLC owns about 60% of PHP 140 billion. So the way I look at it's actually on the REIT alone, it's PHP 84 billion already. So I think the discount to both is a function of 2 things, right? Number one, what we can do at our end is that that's why there's a focus by the group to develop more land to monetize whatever land bank that we have so that we can essentially churn it, convert this into our income statement and provide more dividends to our shareholders. And then I think the second is the discount, I think can be answered by both the buy and sell side in this group how to narrow the discount there. It's an odd situation. But I guess that can be solved by both the buy and the sell side.
Maria Socorro Isabelle Aragon-Gobio: Jon, I remember your second question. It was about if our strategy is correct focusing on the investment side of our business. I believe so because it allows us to have a stable cash flow and it also positions us uniquely to be able to infuse our mature investment assets into the REIT in order to monetize those. The residential market or the developmental business remains to be an opportunistic play for the company. And then for the offices, James, can you answer?
James Arco: Jon, so just quickly on offices. As per third quarter market reports from several brokers, vacancy is at 20%. So we're doing slightly better than market at 12% vacancy. Now in regards to AI, I think AI has always been around, but it's just louder now and we've been hearing from our tenants and our orgs that we talk with that they're really using it as a tool to better their efficiencies such as training and hiring. So what we hear from them is they're improving productivity with it using as a tool. And in regards to the key call centers in the U.S., they've remained quite quiet about it because they're hoping it dies down. The incentives given in the U.S. is much lower than the savings they get here in the Philippines. It's maybe around 20% versus 80% here in the Philippines in regards to labor costs. So we're also giving a lot of confidence because of our leasing team. We've had around almost close to 200,000 of expiries this year in which we've renewed and replaced around 94% of that. Also, we're very proud to say that I think this year is the highest amount of new sign-ups that we had even in the height of POGO where we've reached 100,000 square meters in new sign-ups in which 65% were actually ITDPM industry. So we're quite confident on the office sector.
Jonathan Ogden: Also, I've got 1 more, if I can throw that in there. Just going back to our expansions and what have you. Now in the latest report, we were able to pay down some debt. Now we've got the REIT we can put assets into every now and again. We've got our expansions of our investment properties coming up. And then we've got dividends or buybacks and then the leverage in the balance sheet. So how is that going to play out in this plan to 2030? Is the balance sheet going to get more leveraged up or is it going to go the other way because of sales of the REIT or how do you see the balance sheet evolving over that plan to 2030?
Kerwin S. Tan: It's a function really of how much money do we raise from the REIT on an annual basis. But given that all things are the same or would be the same and the balance sheet will more or less be on the same level as currently shown in terms of gearing. Of course substantially as part of our 5:25:30 plan, if we reach by PHP 25 billion by year 2030 so that would enable -- from now to 2030, that would enable us to provide more -- our earnings per share will increase and subsequently, our dividend payout will also increase.
Rommel Rodrigo: Now we'll go on the Q&A. The first one is from [ Emmanuel Limpo ]. That's answered already. Okay. So the second one is from [indiscernible]. Answered already also. From Marco Mario. May I know if you can provide revenue contribution, GLA and occupancy rate for Robinsons Manila and Galleria? When do you plan the [Audio Gap] RCR?
Ramon Rivero: Okay. GLA for both of them combined about 200,000 square meters. And then rental income, about 21% rental income and occupancy is more than 90%.
Kerwin S. Tan: So it will depend on the market conditions in the future.
Rommel Rodrigo: And then a question from Jelline. How much was RCR's DPS in second quarter 2025 and 3Q 2025?
Kerwin S. Tan: So for the second quarter, DPS was PHP 1.049 per share. Third quarter PHP 1.060 per share. For the first 3 quarters, total dividends per share is PHP 3.156 per share.
Rommel Rodrigo: From [ Christina Uhla ] of First Metro. Can you give more context on the high impact strategic partnerships you've cultivated in your 5-year plan?
Maria Socorro Isabelle Aragon-Gobio: Yes. So we're actively pursuing a number of joint ventures, alliances and also co-investments across our different businesses and it's in various formats. Let's say for the malls, it's really working with high potential tenants. For our logistics business, it's acquiring or codeveloping facilities that will allow us to expand our portfolio. Also for our land acquisition, it's joint ventures with other developers as well as government agencies. So together, this should allow the company to scale our executions, expand our pipelines and also to accelerate our market entry into market segments where we're not currently playing.
Rommel Rodrigo: Okay. Question from [ Juan ]. May we know the potential impact of Trump's hip call centers in America on RLC's office development given that the app focuses on voice-related services. Do you have an estimate on the percentage of BPO tenants that mainly offers this kind of service in America clients in Q4?
James Arco: Juan, so we'll have to get back to an exact numbers here. We have to call all our tenants to get a clear number. But just to give you an example, one of our bigger tenants, maybe around 1/4 of its actual space is dedicated to voice while the others are more on the tech and corporate function. And a lot of our tenants service not only the U.S., but several different countries. So it will be quite a task to break down and give you an exact answer.
Rommel Rodrigo: Okay. Last question on Q&A is from Francis Paul from BPI. I would like to ask if you have guidance on resi launches and takeup for both this year and next year?
Maria Socorro Isabelle Aragon-Gobio: Yes. So for resi launches for the remainder of the year, we don't have anything lined up. We want to be able to sell substantially our current inventory. In the first half of 2026, we're planning to launch horizontal projects in the provinces where we believe market demand is strong and also for horizontal projects, revenue recognition is faster, execution is likewise faster. As to takeup for this year, we are estimating -- we're now at PHP 4 billion. We're estimating that we'll finish the year at PHP 5 billion to PHP 5.5 billion. For next year given that we have already cleaned up our cancellation substantially for this year, we're looking at a much higher sales takeup. We'll provide more color in the succeeding quarter.
Rommel Rodrigo: Okay. If there are no further questions. I will now hand you over to Mybelle to give her closing remarks.
Maria Socorro Isabelle Aragon-Gobio: Good afternoon again, everybody. As we approach the end of 2025, Robinsons Land continues to post steady progress and solid results across its diversified portfolio. Net income for the quarter grew by an impressive 19% compared to the same period last year supported by resilient recurring income streams, a strong recovery in our residential business and strategic capital recycling through our REIT platform, a key driver of 5:25:50 objective. The infusion of additional mall assets into RCR and the 3.7x oversubscription of its second block placement this quarter stand as clear testaments to the strong investor confidence in both RCR and RLC's long-term growth prospects. It is also worth noting that RLC now owns 61% of RCR's PHP 140 billion market cap even as RCR holds only about half of RLC's total investment assets. Our investment portfolio remains the key performance driver led by the sustained growth of our malls, which is our biggest revenue contributor, benefiting from resilient consumer spending despite the recent typhoon disruptions. The offices segment also continued its positive upward trajectory posting higher occupancy compared to the previous quarter with our premiumization strategy now clearly paying off and stronger takeup in rents. Our hotels and our logistics and industrial facilities businesses continue to show positive results. Collectively, these businesses form the backbone of our recurring income base, providing stability amid dynamic market conditions. On the development portfolio, our organic residential business remained a standout maintaining its recovery momentum through the third quarter. We should provide detailed updates on the development of our existing destination estates in the coming quarters. Meanwhile, our newly launched Robinson Sports Entertainment and Recreation division introduced just last quarter is already off to a strong start with the groundbreaking of its flagship project in Bridgetowne marking a promising new growth platform for the group. With these positive results, we are confident that our full year performance will highlight RLC's agile execution and strategic expansion, all aimed at achieving our 5-year goal and delivering greater value to our shareholders. And as this is our last earnings call for the year, I would like to sincerely thank each and every one of you for your unwavering support. Merry Christmas and Happy Holidays to everyone.
Rommel Rodrigo: Thank you, everyone, for your participation. You may all disconnect.