Cebu Landmasters, Inc. ($CLI)

Good morning, and thank you for joining us today for the full year 2025 Earnings Call of CLI. Joining us in this call is our COO, Mr. Franco Soberano; and our CFO, Ms. Kits Rafols. Also joining them is our Deputy CFO, Mr. Renz Canete. Our presentation will cover the results of our operations for the full year 2025 as well as recent business updates and corporate milestones. [Operator Instructions] Kindly note to this presentation and Q&A may contain forward-looking statements from our executives. These are subject to risks and uncertainties that may cause the actual results to differ materially from the management's estimates and forecasts. Also, please be reminded that this call is being recorded. I now turn you over to Franco.

Hi. Good morning, everyone. Good morning, CLI shareholders. Good morning to our analysts and a good day to everyone. We'd like to welcome you all to our full year 2025 briefing. We're here today to report strong results from Cebu Landmasters. We've always believed that we're an outlier in the industry. We've been growing a 20% CAGR since our IPO and 2025 validated that strength. Of course, there are headwinds externally, but we want to report how CLI is strongly navigating and taking full advantage of the opportunities available in the VisMin region. And now we are spreading our wings to Metro Manila and Luzon. So with me, I am very pleased to be accompanied by 2 new faces. On my right is Ms. Paquita Rafols, our CFO. She was previously our financial controller. And to my left is Mr. Renz Canete, our Deputy CFO, who recently joined us as well. Once again, we'd like to thank our Director and outgoing CFO, Mr. Grant Cheng. So it will be our first briefing with this new team. And we're excited to present to you our results. So for the financial performance, I'll first like to call Ms. Paquita Rafols to present the financial performance.

Good morning, everyone. We appreciate you joining us today. It is my pleasure to present to you CLI's 2025 results of operations. CLI closed 2025 with PHP 18.5 billion in consolidated revenues, 132 projects across 18 key areas in the Visayas and Mindanao and a revenue CAGR of 21.3% since listing in 2017. We continue to hold a leading position in VisMin with an 18% market share. Our team stands at 1,460 people. Before I walk through the numbers, I want to offer one framing point. 2025 was a year where our sales performance significantly outpaced what the income statement reflects. Reservation sales reached PHP 24.6 billion, the highest in our history. What was recognized as revenue is lower because recognition follows construction progress and collection. Now let me walk through 5 highlights for the year before we go into the details. On earnings, consolidated NIAT came in at PHP 4 billion for the full year, up 1% from prior year. Parent NIAT was PHP 3 billion, also up 1%. Margins came in largely at the same levels as 2024, which we are satisfied with, given the cost environment the industry was navigating. On sales, residential reservation sales reached PHP 24.6 billion, a 45% increase from PHP 16.9 billion in 2024. This is the strongest sales year in the company's history, and it gives us a very good visibility on revenues over the next 2 to 3 years. On portfolio takeup, 91% of our residential units across all projects are sold. Newly launched projects accounted for 77% of reservation sales which tells us the market is responding well to fresh inventory. This is not just carry forward from prior years. On the balance sheet, net D/E stands at 1.66x and our cash position improved from PHP 1.6 billion to PHP 3 billion. We are comfortable with where leverage sits given the growth we are funding. On a recurring income, revenues from our hotels, leasing portfolio and management fees grew 58% year-on-year. These assets are beginning to contribute at a meaningful scale, and that trend will continue as more of them reach all operations. Next. Consolidated revenues for the full year were PHP 18.5 billion against 18.6 billion in 2024. Under PFR Standards, approximately PHP 1.8 billion of our lot sale proceeds this year was specified below the revenue line under other operating income rather than in the top line. This is a presentation requirement that a difference in the actual transaction. On a comparable basis, revenues would have been approximately PHP 20.3 billion, representing around 9% growth over 2024. We want to be transparent about this, so you have the right basis for comparison. Within the reported top line, our core residential business performed well, with the exclusion of lot sales, ,CLI real estate sales and related finance income remains the main revenue driver, reaching PHP 17.3 billion, up 10% from PHP 15.8 billion comparable revenue in the year prior. And our recurring income we saw strong momentum. Hotel revenue grew 79% to PHP 431 million, a result of higher occupancy and room inventory that expanded to 797 from 640. Leasing revenues grew 39% to PHP 227 million, with gross leasable area now at 71,000 square meters, up from 41,000. Management fees grew 21% to PHP 77 million as our recurring income are starting to gain traction. Likewise, our operating and net income margins remained stable as we report a consolidated NIAT of PHP 4 billion, up 1% from prior year. Noncontrolling interest was PHP 993 million, higher than last year due to increased revenue recognition in our JV projects. Parent NIAT was PHP 3 billion. Now I'll turn you over to Renz to discuss more on our operating highlights, financial conditions and cash flows.

Thank you, Kits. So looking at where our revenues are coming from, so both by product and by geography. So let me share with you this slide. By market segment, Casa Mira, our economic housing line accounts roughly 41% of recognized revenues. Our mid-market, which is Garden Series is at 40%. Premier Masters contributes 12%. The affordable and mid-market segments together represent about 80% of our revenue base. This reflects where genuine demand is strongest in the VisMin market, families looking for quality homes at accessible price points. Now for -- by geography. So you see the right-hand chart. Mindanao now accounts for 38% of our revenues, our largest single contributor. Cebu is at 30% and Visayas, excluding Cebu, is at 29%. This geographic spread has been building steadily. Our expansion into CDO, Davao, General Santos and Butuan has been absorbed well by those markets, and that gives us confidence as we continue to grow outside Cebu. Next slide. On reservation sales. So our reservation sales represent signed contracts. So these are real buyer commitments on units, we will construct and turn over in the coming years. They are not yet in the income statement, but they sit in contract assets and receivables. But they are the clearest indicator of where our revenues are headed. So for the full year 2025, our residential reservation sales reached a record PHP 24.6 billion, up 45% from PHP 16.9 billion in 2024. We are generally proud of this result, which reflects both the strength of demand in our markets and the quality of the launches we brought to market during the year. If we include lot sales for this year of PHP 2.2 billion, our total reservation and estate sales were up 30% to $26.9 billion. Casa Mira and Garden Series together account for 70% of residential reservation sales. Premium Masters contributed 10%. The rest came from the lot sales and other products. So for the year, we launched over 4,500 residential units with a combined sales value of approximately $30.3 billion across Cebu, CDO, Palawan and General Santos, 77% of which -- of those reservation sales came from newly launched projects and 23% of reservation sales moved our existing inventory. Next slide. Moving on to our balance sheet. So for the year, contract receivable for the year, we see that our operating -- sorry, our total assets as of December 31, 2025, we're at PHP 134.2 billion, which is up 23% from PHP 109 billion a year ago. Most of that growth is driven by construction in progress. So real estate inventories, these are units we actually sold and are actively building grew 62% to PHP 21.2 billion. Noncurrent contract assets rose from 35% to PHP 38.5 billion. These are not idle assets, they actually present projects under development for buyers who have already committed. For the year, cash improved meaningfully. So last year, it was at PHP 1.6 billion. Now it's a PHP 3 billion, up 92%. This reflects stronger collections from maturing projects and the proceeds from our financing activities last year. Total liabilities were around PHP 99.4 billion. The increase was funded by net growth in our debt portfolio tied to land acquisitions and project executions. Total equity stands at PHP 34.7 billion, parent equity at PHP22.4 billion. As mentioned by Kits, so net D/E is at 1.66x compared to 1.97x in 2023 and 1.58x in 2024. This ratio has been relatively stable as we fund growth. But the longer trend is really to gradually improve as earnings accumulate. Next slide. So moving on our contract receivables. We see that as of the year, December 31, 2025, it stands at PHP 96.4 billion. This is the uncollected balance across all our signed sales contracts, units at various stages of construction turnover and completion. So bringing that down on the left-hand chart, you see that, that PHP 66 billion is from units we have currently and under active construction, PHP 18.2 billion from projects in the handover base, PHP 6.7 billion from completed units and PHP 5.6 billion from newly launched projects. So you see on the right hand, there's a picture there of projects for turnover. Franco will talk about that in a little bit. The receivable base is growing because the base of new sales is outrunning the pace of collection of prior period contracts. So that is the expected profile of CLI, which is actually very expanding. It is not a collection concern, but it's a reflection of our volume. On credit quality, as mentioned by Kits already, our current delinquency rate is 2.62%, which is well above or better than industry. Our gross cancellation is at 3.85%. And then after accounting for units successfully resold to replacement buyers, our net sales recovery for the period is 97%, which actually shows that our actual net exposure is very low. As we know, our buyers are predominantly end users. Family is purchasing homes, not investors, trading units. That buyer profile gives us confidence in the stability of these receivables. We have continued to perform well, and these metrics have been broadly stable across periods. Next slide. So moving on to our operating cash flow. As we mentioned here, it's a goal focus strategy, which generates resilient operating cash for us. So for the year, our full year operating cash flow is at negative PHP 5.5 billion compared to last year's PHP 4.3 billion. We note that the movement for this working capital specifically due to accelerated land acquisitions during the year. We acquired land back ahead of our 2026 project pipeline. So these payments flow through operating cash, they totaled PHP 12.5 billion in working capital outflows. Our operating income before working capital changes was PHP 8 billion, an improvement over the prior year. Moving to investing cash flows. Our investment cash flows was negative PHP 3.2 billion, primarily for capital expenditure on investment properties and PPE. To note, this is actually lower than PHP 5.6 billion in 2024, as several investment property builds reached completion phase already. Moving down to our financing activities. We generated PHP 10.1 billion last year. This came from our PHP 8.9 billion sustainability-linked fund issuance, PHP 1.6 billion in preferred share issuance and PHP 2.2 billion in additional shares equity. Against this, we paid PHP 3.9 billion in interest and PHP 1.5 billion in dividends both to common and preferred shares. For the year, we end our cash at PHP 3.0 billion. It is an improvement of PHP 1.4 billion from prior year. We are in a better liquidity position now than we are 12 years ago. And then lastly, I'd like to show you our debt maturity profile, so for context, I'll give you context how our receivables will be used for debt repayment. So on the left-hand chart, you see in the slide, we have approximately PHP 96 billion in receivables. Against this, our PHP 61 billion in outstanding debt. So these receivables, as I mentioned a while ago, our contracted sales. This will be collected over time as you see in the charts from this year until 2031 as projects are completed and turned over. So as our buyers, our end users and primary homeowners, we are confident about the collectability of these amounts. So when we map this against our debt maturity profile, the dark color green, collections are expected to be more than cover our obligations across the periods. It allows us to fund our developments in a way that is supported by actual sales, rather than purely on external financing. On our interest exposure, you see in the right-hand chart, our borrowings remain balanced in a mix of fixed and floating rates allowing us to manage rate movements while maintaining flexibility. Overall, the structure of the balance sheet reflects a match and disciplined approach where our future cash inflows are aligned with our funding requirements. So I'll now turn you over to our COO for the business updates.

Yes. Thank you, Kits. Thank you, Renz. So that was very well said. So it reinforces the strategy we have. Basically in 2025, we registered our highest sales performance in our company's history, close to PHP 25 billion of new sales generated from the projects we launched and we had to reload with new exciting acquisitions, including a large 80-hectare site in Cebu. So I'll take you through the business updates and how these numbers reflect the operations on the ground. So next slide. So this is our portfolio that we've been working very hard for while our leadership in residential continues to grow, the fruits of our investment in the offices, hotels, mixed use are -- they are bearing fruit right now with the growth in the recurring income, more than 50% growth that we have reported. Also, we have also capitalized on the high appreciation of our estates. You can see the lot sales that we've generated, which have contributed to the positive financing cash flows that you saw in the earlier slides. Next slide. So for real estate sales in a market that we have to overcome climate challenges. There are also some regulatory changes that we have to navigate through. And in spite of that, with the leadership we have, we were still able to grow sales in our region. So we grew 8% to PHP 17.3 billion of real estate sales. The most important figure here is the 91% sold out status across all stages. So this includes completed, under construction and launch projects. And we are already approaching PHP 200 billion of helping our country, creating jobs and opportunities and homes for our Filipinos. Next slide. So this is the -- this is basically the batting average we have, of the 107 residential project launch, we're already at 46,000 units launched. And these are 91% sold. And you saw that the cancellation rate at 3%, delinquency rate is below -- just below 3% and the high resale rate of 97%. So for, meaning for every cancellation we have, we're able to resell 97%. It really reflects the lack of supply in our markets. It reflects our being quick to bring inventory to the market, where our peers here in Cebu, Davao, might be launching 1 project every 3 years. We're launching almost 1 project or 2 in every major city in VisMin every year. So we're able to bring that to market for the completed projects at 93%, ongoing construction at 94%. And of course, newly launched projects are in the last 12 months already at 68% sold. So basically, when we look at it from the executive committee, at the management committee, we look at this and we are -- this, for us, is the best basis to acquire new properties because we are running out of inventory. Of course, you saw our margins when -- even in an elevated -- when there is inflation, we are still able to manage our gross profit above 51%. So I'll talk more about how the recent crisis may affect us and how we are mitigating as we speak. Next slide. So you can see our portfolio across competed projects. We are managing each and every project as a property management arm of all these completed projects. So they're still 7% of inventory, but we already able to command the appreciated price levels, which is good for CLI. Next slide. So this is what's keeping my team very busy, turning over many projects, Bohol, Iloilo, Mivela, a very beautiful project in Cebu. Casa Mira Guadalupe, actually, this Tower 3 here, we're about to give our -- the keys to the residents in the coming 1 to 2 weeks. Of course, the commercial properties like the very much awaited Master Tower Cebu is nearing the full enclosure of its curtain wall, and designed by Skidmore, Owings & Merrill, one of my favorite architects in the world. Next slide. So this one for construction in progress. What's very critical here is I'll explain that we have many projects at 80% and up completion. What that means is those projects are less -- least vulnerable to the impact of the oil crisis because the impact of the oil prices are more for those that projects that are in the structural or what we call civil work phase that are heavily utilizing steel and cement. So you look at our projects in 3 quadrants now, newly constructed, meaning foundation, earthworks, structural, middle would be more on the electrical, mechanical and the last quadrant finishing. So the middle and the last quadrant are more protected from the price shocks. So we're looking at 1/3 of our construction. We're really managing well with our suppliers. Since we command one of the highest volumes in the market, the suppliers are giving us, of course, the preferential pricing and priority for supply. And I want to mention maybe that it's not the first time we've seen external shocks. CLI has been in the business for 23 years. I've been the COO over the last 16. And then for us, in 2022, '23, there was hyperinflation, as all of you know, that affected both material and labor and yet, you saw how the growth was continued at a 21% CAGR. So I'll explain more in the coming slides as well. Next please. So these are what make me happy. These are all structurally done. So we are not, in a way, too vulnerable to the oil impact, to the steel and cement prices, ready-mix concrete. So these are nearing turnover, Casa Mira, CDO, Terranza in Iloilo, Mandtra in Cebu, Casa Mira Guadalupe, East Village, Phase 1, Casa Mira Dumaguete, Costa Mira Mactan. So our team put together a nice collection of properties because the company's goal is to turn over and collect PHP 20 billion worth from the takeouts of these projects, spanning more than 20 projects. So this is what will generate a lot of strong operating cash for us. And we can mention that, mortgage rates are really holding steady at the 6% to 7.5% range due to the long-term nature of a housing loan investment. Next slide. So for this recent launches now, so even at the onset of the recent, well, these are 2025 updates, but look, 68% from projects launched in the last 1 year. One Manresa Place, which we launched early 2025, 98% sold. Casa Mira GenSan launch in the, I think, towards the second half, 99% sold. Nagomi, at the end of 2025 is 14% sold but as of today, we're at 40-plus percent sold, our first international joint venture. Then Casa Mira Towers Palawan is very recent. And Costa Mira Mactan, we launched very late last year. And the West Village is already inched up to about 50%. So these are very good indicators for us. Of course, I'll reserve the results of the first quarter for the next briefing. Next slide. So you can see we continue to push forward. These important projects after we launched, we broke ground immediately. This is how we feel responsible development should be now, buyers invest because they expect their units as committed. So immediately after ground launching last year, we broke ground on these projects. Next slide. First, I'll talk about our recurring income project and how this is really keeping us very excited. Of course, this will come out as a small figure, but to us, it has a tremendous impact because we invested in these projects in the last 5 years, and they are now bearing fruit. There's 80,000 more GLA coming the next 3 years, 49% growth in leasing revenue. Next slide. So you can see here, we opened almost 3 major retail projects with the DGP City Center, the Astra Mall and the Patria de Cebu. So you can see we've been -- I already the scissors with me around because there's a lot of ribbon cutting going on in our projects. So we're very thankful for that, thankful for the trust of the tenants. Of course, we're trying to make more creating lifestyle, destinations that are very homegrown. So we're featuring a lot of the Cebuano, Davaoeno, and soon in Cagayan when we open our retail center there. Of course, hotels, we're very busy here. And the business is reflecting in the results, 79% revenue growth, 797 rooms already operational and 922 more to go. So I'm talking to our head of hotels, Mathias all the time because to attract tourists, we need the facilities and the quality facilities to attract tourists. Next, so you can see here, we are opening very soon, Radisson Red, we're actually scheduled to open in 1 to 2 weeks' time, a very beautiful, very innovative development owned by Cebu Landmasters and operated by the Radisson Group. Mercure Hotels, a component of our Patria de Cebu is opening towards the end of the year. Next slide. This is a very important slide and so as our inventory was moving very fast, our sales take-up was reaching record levels. We had to reload. And we had our most significant land banking results in 2025, almost doubling our land bank within a year with the addition of select key urban properties and our major township in Cebu in Liloan with 79 hectares. So we acquired 104 here. So we developed and then acquired. So 188 is net. And of course, I just have to mention this, but a few days ago, we disclosed the acquisition of our first township in Luzon with the acquisition of our 70-hectare Dasmarinas, Cavite township. So basically, we more than doubled with our land bank in the last 12 to 15 months. So our IR head here is nodding in approval. So why do we do this, right? We are here for the long term, real estate developers should always look, of course, there are short-term strategies, but we have medium to long-term goals as well. So we have set our sights on growing increasing leadership for the next 5 years. So we are very well positioned. Well positioned because, as you know, when we acquire a property, it takes 6 months to 12 years -- 6 months to 12 months before we can launch. So the good thing with this new land bank, we are now in the planning phase and the timing of launch will coincide with a better external environment too. So next slide. So estates and townships, you can see here that GLA already are generating recurring revenue from our retail areas here, land leases and of course, lot sales in the Davao Global Township. Next. Of course, due to the high appreciation and this township becoming a favorite destination of Davaoenos, not just in the south of Davao but also Center Davao. We already have lot sales investors as well, and we're very thankful to them. And it has really become a very popular destination here. We already launched the West Village, I'll put W here. That has already more than 50% to 60% sold. And we're launching the other phase on the other blocks as well. Next, of course, I'll end with significant milestones, and we're really happy to answer any questions you may have for me and my executives. Next, please. Of course, we're very, very honored and proud to achieve the oversubscribed sustainability-linked bonds offer. We raised PHP 4 billion in the third and final tranche of the bond shelf registration. So we are on target. So as you know, the sustainability-linked feature is us developing affordable homes. And you can see we're very well positioned with the 70-hectare affordable township and another 80-hectare one. So we're very well positioned. Of course, with the ongoing constructions we have as well. So thank you to our bondholders. Next. So of course, this is very meaningful for us because this is where CLI is a good partner. Partner, not just for business also with the church, with the government, we were chosen as the partner to redevelop a church property and we have to honor the historical value here by preserving the frontmost facade, which is a community center built in the 1950s and if we redevelop the rear portion into a mixed-use building with offices, retail and all room and ballroom and hotel with an immaculate of conception statue that has really revitalized this part of downtown Cebu. So we in CLI look forward to continuing acts of generosity that give a good really holistic approach to development. Next. Of course, this is highlighting also more responsible and sustainable development. So our major township in Cagayan de Oro is a collaboration between Xavier University, Ateneo de Cagayan and CLI. We have always been -- we have always acknowledged that Uptown Cebu is progressing very rapidly, and we should be contributing to positive growth. So in our own initiative, we are developing a PHP 120 million road access privately funded by Cebu Landmasters that will create the other alternative link between downtown CDO and Uptown, with a 3-lane road that will open in less than 2 years' time. So this brought a lot of good news in Cagayan. And this is also us investing for the community. And good design is also a good business, it's a very important principle. Next. Of course, we have our Mega Manila expansion ramping up. We just announced very recently our Dasmarinas, Cavite acquisition. So our very key major entry into Luzon. It's a very prime, I would say, property that will be our showcase a residential township with town center features, some institutional uses as well. And of course, we are preparing -- we're now in the tail end of the planning phases for our very first offering in Metro Manila with our Pasig City development, which is a joint venture with an NTT UD Group. We're very excited and proud to bring our generous brand and portfolio brand or development to both Metro Manila and Mega Manila. Of course, I want to share this, we recently declared a PHP 0.18 per share cash dividends with a declaration date last April 7, record date April 22 and payment date already on May 6. So this is very important, if you've been holding our shares since the IPO, you would have really been earning a 30% return. We really feel committed, of course, to our buyers, homeowners, which are always in our minds, in our hearts. But of course, our shareholders, now who have been loyal to us, who have believe in us. And we are very -- basically declaring dividends is also validating that our position is very strong. The results reflect that strength as our CFO mentioned, the revenues are timing based, not based on completion and collection. But forward, the reservation sales, the batting average of our sales show the real strength of CLI. So we're very happy to declare and share this good news with our PHP 0.18 per share cash dividend declaration. And we've distributed PHP 4.38 billion in dividends since 2018. So just a key investment messages. In 2025, we launched PHP 30.3 billion worth of projects. encompassing 4,500 homes in Cebu, Cagayan de Oro, Palawan and GenSan. Two, we are cautiously optimistic of the recent U.S.-Iran situation. Company is closely monitoring developments. As we said, the policy of Cebu Landmasters, all our projects are moving forward as scheduled. So we are managing the material purchasing very well such that there is no delay to our project. And as I said, there are 3 quadrants. There are projects in the structural phase, in the MEP space in the middle and at the finishing stage. So we really have to manage very closely the phases in the structural phase such that there is no delays and we're able to manage very well. the 10% to 15% cost increases in those materials. Number three, projects remain in high demand with 45% increase in residential take-up. So as we speak now, we are about to launch 3 projects in the second quarter, and we are really working very hard to get the needed licenses. So we are pushing hard to get these licenses, there are still many families looking for these homes in VisMin and of course, with Manila that was already on a normalizing situation before the crisis happen. So Mega Manila pipeline secured. So we will launch a multiphase project in passing at the end of 2026 and our 70-hectare township soon to rise in Dasmarinas, Cavite. So with that, we'd like to end our briefing. I'd like to thank again my co-presenters here for adequately presenting and relaying the news of our 2025 operations, and we're very thankful to those who have contributed to the success from our team, from our partners, our contracted suppliers. So thank you very much.

Thank you so much, Franco. We now open the floor for questions. I think we have one. Real estate revenues are flattish for the year. Is this a sign of weakening demand?

Actually, it's just purely a POC timing. But in fact, if you add our lot sales, our revenue actually increased 9%. And it is a demand. In 2025, we had the highest reservation sales. So the demand is there based on that metric.

Yes. So you can see in our P&L, we are already disclosing the -- uploading all our group financial statements. So the lost sales are in the operating income. So if you move that up to the top line, it would show a 9% growth in our revenue.

Another question, in relation to your retailing model, are you already seeing some stress in your collections?

Retailing model. So the good thing is the cancellation rates reported are up to date. So the 3.5% cancellation rate is holding steady and the 2.9% delinquency rate is also holding steady. In fact, we just had our men on yesterday and the accounts management team, customer relations team also reporting that it's holding steady. What this means that even with 6 to 7 weeks of the Middle East conflict, we don't see an uptick in cancellations yet, which bodes very well for us and gives us that comfort in the market. We are an end-user market that is holding or investing in real estate for the long term.

Okay. Another question, can you provide occupancy levels for your hotels and leasing assets?

Yes, so I can provide you now is our office assets are in the 90 and up range, meaning offices have performed tremendously in 2025. We have 4 office buildings that are at 90 to 90-plus percent occupancy. So it shows how the BPO market in Cebu has, I would say, recovered strongly. On the hotel side, our Citadines hotels are averaging at the 60-plus percent occupancy, which is mirroring the industry here in Cebu and Bacolod. So our hotels that are operating are currently in Cebu and Bacolod. And for leasing assets, so you asked we're also in the above 90% occupancy. I think one of the positive highlights is seeing very strong retail traffic. And that has not yet been dampened by, I would say, the of course, the oil prices. So we are monitoring it very closely. But you have projects of ours like Patria de Cebu, Astro Mall, the DGT City Center that are already nearing full occupancy level. So I think what the market has to look at is -- what the market has to observe very closely in the next few weeks, if there's a prolonged crisis, we need to mitigate. Now I think what will happen is our tenants asking support. So it reminds us of how in pandemic we have to be very generous and supportive because we are here for the long term, we need to protect our industry partners and our tenants. But so far, I was just in our mall yesterday, I was eating in a restaurant that was full. So it's so -- far in Cebu, it's doing -- holding quite well.

Okay. Another question is regarding the take up of The Wave Towers, there was an uptick from 14% up to 40%. So what drove the demand?

So what drove the demand is really scarcity, I would say, and our superiority in our offering. So we are the only new launch, residential launch in the Cebu Park District. So the Cebu Park District includes both the Business Park and the IT Park. And we're the only new offering in that. So imagine the Cebu Park District is our version of BGC and Makati, and meaning we are the only new project in that. So you can imagine how much of an advantage we have, right? And it's accompanied by the strength of our NTT UD partner that has given us great planning insights, great engineering insights creating a superior product. So it's still inching up. And as you know, this is a 4- to 5-year construction period. So our buyers buy, down payment over 5 years. And the price is going up because of -- there's not a lot of land left in our business district here. So from the 14%, yes, I can report we're now about 40% sold in The Wave Towers and even preparing possible second tower.

Other question is regarding the CapEx. What's the current CapEx plan and allocation?

Right. So let me take that. So primarily for 2026, we are looking at around PHP 12 billion to PHP 14 billion in terms of CapEx. Last year was around 16%. For this year, priority is really project development. So that will account roughly 60% to 70% of our CapEx for the year.

How is the recent conflict in the Middle East affecting the business?

Yes. So actually, I've been asked this recently by some news channels. How has it been affecting? Of course, if there is an impact in pricing of construction materials now, but particularly strong materials, so cement and rebar. And those materials that are logistics dependent. So the transit mixers. But other than that, as you know, the market was still recovering last year, meaning there was a slowdown in Metro Manila, whereas in VisMin, so a lot of our suppliers actually have excess inventory and stocks of tires, ceiling. So those pricing for finishing materials or even some pipes have hold very firm and are advantages for us. So I would say, this is not our first rodeo in this kind of crisis. Of course, it's unique in the sense that it's not really exactly the same as the outbreak of the Ukraine-Russia war or the hyperinflation 2023, but it has similar mitigation efforts, locking in certain pricing at a good level, but not too much. Because what we learned in Ukraine-Russian war after 6 months, prices went up 40% but also prices went down 40% after a year. So we should not also lock in long term. So we are looking at it on a 2-month to 3-month basis, our strategizing. So basically, that but in terms of how we also manage it, we need to support. Basically, our strategy as a company is to not stop, just as how we did not stop during the pandemic between the Ukraine war in 2023. What we need to do is support, support the contractors, support the construction workers, so giving subsidy where needed because it's a team effort. When we have to navigate through these kinds of external shocks. And we've seen how we rose above it during the past few external shocks. In fact, we are launching new projects. Now we are preparing to launch a new project in Ormoc. We're preparing to launch a new project in Davao and another one in Mactan in Cebu. So we are very -- the word is cautiously optimistic because we've navigated this well before. It just takes a very decisive action from management, which we are doing to overcome this well without slowing down any projects.

Another question is some property developers are shifting towards premium, high-end segments to counteract at high inflation and elevated interest rates. So how does the CLI react to that?

Well, my reaction is the market dynamics in Manila might not be exactly the same as in Visayas and Mindanao. So you could see that we are already 91% sold across and 80% of that, as Renz reported, is in the middle market and affordable segment and very low delinquency. So you know what makes that possible, right? The cost of land in -- besides Mindanao is much lower than the cost of land there. So we can still build affordable housing or affordable condo near the city or in the city. The challenge with affordable housing in Manila is land prices are going up. So you'll have to -- to live closer to the city, you have to pay more. But in VisMin, there's really that value for money still available, and that's what we're really able to capitalize on. However, we are about to enter Dasmarinas, Cavite that we saw. But we still saw a lot of good value for money propositions there. I believe we're looking to launch products in the PHP 3 million to PHP 10 million range in Cavite. So those are what we feel markets that are still desirable because the high-end markets, while very exciting, we're also part of that in Cebu, but it's less than 10% of our portfolio because properties that command very high land value will really have a market, but it is really the smaller market in the Philippines based on my experience. So as I said, the high inflation, when you apply that inflation rate to the Visayas and Mindanao, where the land is half the price of Manila, that will not affect the appetite as much. That's why the mid-market and affordable are still very desirable here in our region. And it reflects in the results and our record sales.

Another question is in terms of geographical location, how is your project size distributed?

That was in your...

Yes. Yes, I can recap that. so that -- so for 2026, we are actually around 3% for Cebu. So that's for our Cebu operations. We are at 29% for Visayas, excluding Cebu. And then outside of Cebu and Visayas, Mindanao is at 38%. And I think for -- there's a follow-up question to that. Should Manila developments come in, how will that change the distribution? So what I mentioned was realized revenues. As you know, we've recently acquired the Metro Manila lots. So with our project cycle between 3 to 4 years and going through construction, most likely, that will be reflected in 2 to 3 years' time. In fact, the fastest would be on the second or third year. So the shift would turn towards maybe 5%, 10% contribution in the next 2 to 3 years. Shifting to Metro Manila in terms of distribution.

So what's very interesting is, first, our team during our last strat plan was analyzing how did we grow relative to our peers. So we really have grown at a 21% compounded annual growth rate because we are really capitalizing on the nice supply-demand situation here in our region. Going to Manila is a natural consequence of our growth and our capability with our 1,500 strong team because we still feel that Metro Manila is a market still with a lot of opportunity. So it's about now positioning. It's about strategic thinking. It's about generosity because we need to price well, of course, such that it can be absorbed by the market, such that it's investable for our end users. So that is really the thinking we are bringing to Manila. We'll have our first launch by the end of 2026. There was a question on how the current crisis affect us, we're still on schedule. We don't see any immediate need to shift to a lower gear. However, we are being -- we're mitigating, we're mitigating by getting good supplier contracts, getting good contractor arrangements. And it's more coming from us, we supporting our peers' industry, supporting brokers, supporting contractors, suppliers, construction workers. So we have to do our part to achieve our objectives.

Another question is, what percent of your buyers are OFWs?

Yes. On average, it's 40%. Do you have the exact? In our recent report, it's around 40% on average. But this also includes overseas Filipinos and not just overseas Filipinos workers, but overseas Filipino residents.

And how did the recent U.S.-Iran conflict affecting the OFW market?

It's very good you're asking because, as we said, no uptick or very negligible uptick in cancellations kits. And let's not forget that we are -- we sympathize really with our OFWs in the Middle East, because there is, of course, anxiety and discomfort. However, the Middle East has done a good job of supporting our fellow men there. And of course, our OFWs are also in United States, in Europe, in Australia, in parts of Asia. So there is a dispersion or there is a good mix of OFWs that usually invest with us. But of course, we care deeply about our OFWs in the Middle East, and we really wish for improved situation for all of us.

Okay. I think that is the final question. With no further questions, we now end the session. Thank you so much, and we'll see you in our first quarter earnings call. Have a good day.

Thank you very much. Thank you for the support. Have a good day.