The Prospectus is being displayed in the website to make the Prospectus accessible to more investors.

The Philippine Stock Exchange, Inc. (PSE) assumes no responsibility for the correctness of any
statements made or opinions or reports expressed in the Prospectus. Furthermore, the PSE makes no
representation as to the completeness of the Prospectus and disclaims any liability whatsoever for any
loss arising from or in reliance in whole or in part on the contents of the Prospectus.
Subject to Completion

PRELIMINARY PROSPECTUS

CEBU LANDMASTERS, INC.

(A corporation organized and existing under Philippine laws)

Prospectus relating to the

Primary and Secondary Offer of up to [505,000,000] Common Shares
with an Over-allotment Option of up to [75,000,000] Common Shares
at the Offer Price of [up to P6.56] per Offer Share
to be listed and traded on the Main Board of
The Philippine Stock Exchange, Inc.

ISSUE MANAGER

JOINT LEAD UNDERWRITERS AND BOOKRUNNERS

This Preliminary Prospectus is dated as of [March 29, 2017]

THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED THESE

SECURITIES OR DETERMINED IF THIS PROSPECTUS IS ACCURATE OR
COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE
AND SHOULD BE REPORTED IMMEDIATELY TO THE SECURITIES AND EXCHANGE
COMMISSION.
CEBU LANDMASTERS, INC.
10th Floor, Park Centrale Tower
Cebu I.T. Park, J.M. Del Mar Street
Lahug, Cebu City
Tel: +63 32 401-1120
Fax: +63 32 2616199
www.cebulandmasters.com

This Prospectus relates to the offer and sale to the public of [up to 505,000,000] new and existing common
shares (the Firm Offer, and such shares, the Firm Shares), with a par value of P1.00 per share (the
Common Shares), of Cebu Landmasters, Inc., a corporation organized under Philippine law (CLI, or the
Company or the Issuer).

The Firm Shares will comprise of (i) up to [430,000,000] new Common Shares to be issued and offered by the
Company by way of a primary offer (the Primary Offer, and such Common Shares subject thereof, the
Primary Offer Shares), and (ii) up to [75,000,000] existing Common Shares to be offered by Jose R.
Soberano III and Ma. Rosario B. Soberano (the Selling Shareholders) (the Secondary Offer, and the
Common Shares subject thereof, the Secondary Offer Shares).

The Firm Shares shall be offered at a price of [up to 6.56] per Common Share (the Offer Price). The
determination of the Offer Price is described on page [50] of this Prospectus and is based on a book-building
process and discussions between the Company, the Selling Shareholders, BDO Capital & Investments
Corporation (the Issue Manager, Joint Bookrunner and Joint Lead Underwriter or BDO Capital), and
BPI Capital Corporation (the Joint Bookrunner and Joint Lead Underwriter or BPI, and together with
BDO Capital, the Joint Lead Underwriters) After the Offer (as defined below), a total of up to
[1,714,000,000] Common Shares will be outstanding. The Firm Shares will represent [29.46%] of the
outstanding Common Shares after the Offer.

The Offer Shares (as defined below) will be listed and traded on the Main Board of The Philippine Stock
Exchange, Inc. (PSE) under the trading symbol [CLI].

The Company has appointed BDO Capital to act as the stabilizing agent (the Stabilizing Agent), with an
option exercisable in whole or in part for a period beginning on the date of the initial listing of the Common
Shares on the PSE (the Listing Date) and ending on a date no later than 30 calendar days from and including
the Listing Date, to purchase up to an additional [75,000,000] Common Shares at the Offer Price (the
Optional Shares, and together with the Firm Shares, the Offer Shares), on the same terms and conditions
as the Firm Shares as set forth in this Prospectus, solely to cover over-allotments, if any (the Over-allotment
Option). The offer of the Offer Shares, including the Optional Shares, is referred to as the Offer. The
Stabilizing Agent or any person acting on its behalf may over-allot Offer Shares or effect transactions with a
view to supporting the market price of the Offer Shares at a level higher than that which might otherwise
prevail for a limited period after the Listing Date. However, there is no assurance that the Stabilizing Agent (or
any person acting on behalf of the Stabilizing Agent) will undertake stabilization activities.

Pursuant to its amended articles of incorporation, as approved by the Board of Directors on July 1, 2016 and
approved by the Securities and Exchange Commission (the SEC) on October 24, 2016, the Company has an
authorized capital stock of 2,500,000,000 divided into 2,400,000,000 Common Shares with a par value of
P1.00 per Common Share and 1,000,000,000 Preferred Shares with a par value of P0.10 per Preferred Share, of
which 1,284,000,000 Common Shares are outstanding as of the date of this Prospectus.

The total proceeds from the sale of Primary Shares will be [2,820,800,000]. The estimated net proceeds from
the sale of Primary Offer Shares (after deducting fees and expenses payable by the Company) will be
approximately [2,660,000,000]. The Selling Shareholders total proceeds and estimated net proceeds (after
deducting fees and expenses payable by the Selling Shareholders) to be raised from the sale of the Secondary
Offer Shares and Optional Shares will be approximately [984,000,000] and [908,414,476.74], respectively,
assuming full exercise of the Over-allotment Option. The Company will not receive any proceeds from the sale
of the Secondary Offer Shares and Optional Shares by the Selling Shareholders.

i
The Company intends to use the net proceeds from the Primary Offer to fund key land acquisitions,
development costs for new projects, investment in joint ventures and associates, debt repayment and general
corporate purposes. For a more detailed discussion on the Companys proposed use of proceeds, see Use of
Proceeds on page [39] of this Prospectus.

The Joint Lead Underwriters will receive a transaction fee based on the gross proceeds from the sale of the
Offer Shares. This is inclusive of the amounts to be paid to the Selling Agents and other underwriters, where
applicable. For a more detailed discussion on the fees to be received by the Joint Lead Underwriters, see Use
of Proceeds on page [39] of this Prospectus.

All of the Offer Shares issued and to be issued pursuant to this Offer have identical rights and privileges. Each
holder of the Offer Shares will be entitled to such dividends as may be declared by the Companys Board of
Directors. Dividends payable by the Company on its shares of stocks are payable in cash or additional shares of
stock, provided that any stock dividend declaration requires the approval of shareholders holding at least two-
thirds of the Companys total outstanding capital stock. The payment of dividends in the future will depend
upon the earnings, cash flow and financial condition of the Company and other factors. Special cash dividends
are declared depending on the availability of cash, taking into account the Companys capital expenditures and
project requirements.

Moreover, despite the existence of unrestricted retained earnings, dividend declaration may be withheld by the
Board of Directors when: (i) justified by definite corporate expansion; or (ii) when the Company is prohibited
under any loan agreement with any financial institution or creditor, whether local or foreign, from declaring
dividends without its consent, and such consent has not been secured; or (iii) when it can be clearly shown that
the retention of earnings is necessary under special circumstances obtaining in the Company, such as when
there is a need for special reserves for probable contingencies. There can be no guarantee that the Company
will pay any dividends in the future. See Dividends and Dividend Policy on page [48] of this Prospectus.

Up to [101,000,000] or approximately 20% of the total Firm Shares are being offered to all the trading
participants of the PSE (the PSE Trading Participants), with approximately [765,100] Firm Shares being
allocated to each of the 132 PSE Trading Participants. Up to [50,500,000] Firm Shares or approximately 10%
of the total Firm Shares are being offered to local small investors (LSIs) under the Local Small Investors
Program. The remaining up to [353,500,000] Firm Shares or approximately 70% of the total Firm Shares and
any Firm Shares not taken up by the PSE Trading Participants and the LSIs shall be distributed by the Joint
Lead Underwriters to its clients or to the general public. Firm Shares not taken up by the PSE Trading
Participants, LSIs, the Joint Lead Underwriters clients, or the general public shall be purchased by the Joint
Lead Underwriters pursuant to the terms and conditions of the Underwriting Agreement. See Plan of
Distribution on page [55] of this Prospectus.

The Offer Shares may be owned by any person or entity regardless of citizenship or nationality, provided that
no more than 40% of the capital stock outstanding and entitled to vote of the Company may be owned by
foreigners. The Company owns land and is engaged in real estate development in the Philippines. Under the
Philippine Constitution and related statutes, such activities are reserved for Filipino citizens or corporations or
associations at least 60% of capital stock is owned by Filipino citizens. See Restriction on Foreign
Ownership on page [18] of this Prospectus. As of the date of this Prospectus, the Company is 100% owned by
Filipino citizens.

On February 20, 2016, the Company filed a Registration Statement covering the Offer Shares with the SEC, in
accordance with the provisions of the Securities Regulation Code, and its application for the listing and trading
of the Offer Shares with the PSE. The Offer is conditioned on the listing of the Offer Shares on the PSE.

The Board of Directors of the PSE approved the listing of the common shares on [] subject to compliance
with certain conditions. The approval for listing is merely permissive and does not constitute a recommendation
or endorsement of the Offer by the PSE. The PSE assumes no responsibility for the correctness of any of the
statements made or opinions expressed in this Prospectus. Furthermore, the PSE makes no representation as to

ii
the completeness and expressly disclaims any liability whatsoever for any loss arising from or in reliance upon
the whole or any part of the contents of this Prospectus.

The Company and the Selling Shareholders reserve the right to withdraw the offer and sale of the Offer Shares
at any time, and the Joint Lead Underwriters reserve the right to reject any commitment to subscribe for the
Offer Shares in whole or in part and to allot to any prospective purchaser less than the full amount of the Offer
Shares sought by such purchaser. If the Offer is withdrawn or discontinued, the Company shall subsequently
notify the SEC and the PSE.

The information contained in this Prospectus relating to the Company and its operations has been supplied by
the Company, unless otherwise stated herein. To the best of its knowledge and belief, the Company, which has
taken reasonable care to ensure that such is the case, confirms that, as of the date of this Prospectus, the
information contained in this Prospectus relating to it and its operations is correct, and that there is no material
misstatement or omission of fact which would make any statement in this Prospectus misleading in any
material respect and that the Company hereby accepts full and sole responsibility for the accuracy of the
information contained in this Prospectus with respect to the same.

The Joint Lead Underwriters confirm that it has exercised the required due diligence in verifying that all
material information in this Prospectus, including its amendments and supplements, if any, is true and that no
material information was omitted, which was necessary in order to make the statements contained herein not
misleading. The Joint Lead Underwriters assume no liability for any information supplied by the Company in
relation to this Prospectus.

Unless otherwise indicated, all information in this Prospectus is as of the date of this Prospectus. Neither the
delivery of this Prospectus nor any sale made pursuant to this Prospectus shall, under any circumstances, create
any implication that the information contained herein is correct as of any date subsequent to the date hereof or
that there has been no change in the affairs of the Company since such date.

In making an investment decision, applicants are advised to carefully consider all the information contained in
this Prospectus, including risks associated with an investment in the Offer Shares. These risks include:

risks relating to the Companys existing business and industry,

risks relating to the Philippines, and
risks relating to the Offer and the Offer Shares.

For a more detailed discussion on the risks in investing, see section on Risk Factors on page [24] of this
Prospectus, which, while not intended to be an exhaustive enumeration of all risks, must be considered in
connection with a purchase of the Offer Shares.

The Offer Shares are offered solely on the basis of the information contained and the representations made in
the Prospectus. No dealer, salesman or other person has been authorized by the Company or the Joint Lead
Underwriters to issue any advertisement or to give any information or make any representation in connection
with the Offer other than those contained in this Prospectus and, if issued, given or made, such advertisement,
information or representation must not be relied upon as having been authorized by the Company or the Joint
Lead Underwriters.

The distribution of this Prospectus and the offer and sale of the Offer Shares may, in certain jurisdictions, be
restricted by law. This Prospectus does not constitute an offer of any securities, or any offer to sell, or a
solicitation of any offer to buy any securities of the Company in any jurisdiction, to or from any person to
whom it is unlawful to make such offer in such jurisdiction. The Company and the Joint Lead Underwriters
require persons into whose possession this Prospectus comes, to inform themselves of and observe all such
restrictions. Each investor in the Offer Shares must comply with all laws applicable to it and must obtain the
necessary consent, approvals or permission for its purchase or subsequent offer and sale of the Offer Shares
under the laws and regulations in force in any jurisdiction to which it is subject. Neither the Company nor the
Joint Lead Underwriters will have any responsibility therefore.

iii
A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION, BUT HAS NOT YET BECOME EFFECTIVE.
THESE SECURITIES MAY NOT BE SOLD NOR OFFERS TO BUY THEM BE ACCEPTED PRIOR
TO THE TIME THE REGISTRATION STATEMENT IS RENDERED EFFECTIVE. THIS
COMMUNICATION SHALL NOT CONSTITUTE AN OFFER TO SELL OR BE CONSIDERED A
SOLICITATION TO BUY.

CEBU LANDMASTERS, INC.

By:

JOSE R. SOBERANO III

Chairman, President and CEO

REPUBLIC OF THE PHILIPPINES )

[] CITY ) SS.

SUBSCRIBED AND SWORN to before me this _____________________ in the City of [],

Philippines, affiant exhibiting to me the following as competent evidence of identity:

NAME GOVERNMENT ISSUED I.D. DATE AND PLACE OF ISSUE

Jose R. Soberano III Phil. Passport EB4093113

Doc. No. ____;

Page No. ____;
Book No. ____;
Series of 2017.

iv
___________________________________________________________

No representation or warranty, express or implied, is made by the Company, the Selling Shareholders, the Joint
Lead Underwriters, regarding the legality of an investment in the Offer Shares under any legal, investment or
similar laws or regulations. The contents of this Prospectus are not investment, legal or tax advice. Prospective
investors should consult their own counsel, accountant and other advisors as to legal, tax, business, financial
and related aspects of a purchase of the Offer Shares. In making any investment decision regarding the Offer
Shares, prospective investors must rely on their own examination of the Company and the terms of the Offer,
including the merits and risks involved. Any reproduction or distribution of this Prospectus, in whole or in part,
and any disclosure of its contents or use of any information herein for any purpose other than considering an
investment in the Offer Shares is prohibited.

Conventions which apply to this Prospectus

In this Prospectus, unless otherwise specified or the context otherwise requires, all references to the Company
are to the Issuer and its subsidiaries and affiliates (or the Issuer and any one or more of its subsidiaries or
affiliates, as the context may require). All references to the Philippines are references to the Republic of the
Philippines. All references to the Government are to the national government of the Philippines.

The items expressed in the Glossary of Terms may be defined otherwise by appropriate government agencies or
regulations from time to time, or by conventional or industry usage.

BASIS FOR CERTAIN INDUSTRY DATA

Market data and certain industry information used throughout this Prospectus were obtained from internal
surveys, market research, publicly available information and industry publications. Industry publications
generally state that the information contained therein has been obtained from sources believed to be reliable,
but that the accuracy and completeness of such information is not guaranteed. This Prospectus also contains
industry information that was prepared from independent market research conducted by Santos Knight Frank1
to provide an overview of the real estate market in Cebu. However, there is no assurance that such information
is accurate or complete. Similarly, internal surveys, industry forecasts and market research, while believed to
be reliable, have not been independently verified and neither the Company, any of the Selling Shareholders nor
the Joint Lead Underwriters make any representation as to the accuracy and completeness of such information.

PRESENTATION OF FINANCIAL INFORMATION

The Companys consolidated financial statements are reported in Philippine Pesos and are prepared based on
its accounting policies, which are in accordance with the PFRS issued by the Financial Reporting Standard
Council of the Philippines. PFRS include statements named PFRS and Philippine Accounting Standards, and
Philippines Interpretations from International Financial Reporting Interpretations Committee.

Figures in this Prospectus have been subject to rounding adjustments. Accordingly, figures shown in the same
item of information may vary, and figures which are totals may not be an arithmetic aggregate of their
components.

The Companys fiscal year begins on January 1 and ends on December 31 of the year. Punongbayan & Araullo,
the Companys independent auditor, has audited and rendered unqualified audit reports on the Companys
consolidated financial statements as at December 30, 2016 and December 31, 2015 and for the years ended
December 31, 2014 and 2013.

1
Formerly known as CB Richard Ellis Philippines, Inc. or CBRE Philippines

v
FORWARD-LOOKING STATEMENTS

This Prospectus includes forward-looking statements that are, by their nature, subject to significant risks and
uncertainties. These forward-looking statements include, without limitation, statements relating to:

known and unknown risks;

uncertainties and other factors that may cause the Companys actual results, performance or
achievements to be materially different from any future results; and
performance or achievements expressed or implied by forward-looking statements.

Important factors that could cause some or all of the assumptions not to occur or result in performance or
achievements materially different from those in the forward-looking statements include, among other things:

the Companys ability to successfully implement its strategies;

the Companys ability to anticipate and respond to economic and market trends, including changes in
the Philippine, Asian or global economies;
changes in interest rates, inflation rates and foreign exchange rates of the Peso against other
currencies; and
changes in the laws, rules and regulations, including tax laws and licensing requirements, in the
Philippines.

The Company has based these forward-looking statements largely on its current expectation and projections
about future events and financial trends affecting its business and operations. Words including, but not limited
to believe, may, will, estimates, continues, anticipates, intends, expects, and similar words are
intended to identify forward-looking statements. In addition, all statements other than statements of historical
facts included in this Prospectus are forward-looking statements. Statements in the Prospectus as to the
opinions, beliefs and intentions of the Company accurately reflect in all material respects the opinions, beliefs
and intentions of its management as to such matters as of the date of this Prospectus, although the Company
gives no assurance that such opinions or beliefs will prove to be correct or that such intentions will not change.
This Prospectus discloses, under the section Risk Factors and elsewhere, important factors that could cause
actual results to differ materially from the Companys expectations. All subsequent written and oral forward-
looking statements attributable to the Company or persons acting on behalf of the Company are expressly
qualified in their entirety by the above cautionary statements.

In light of the risks and uncertainties associated with forward-looking statements, prospective investors should
be aware that the forward-looking events and circumstances in this Prospectus may or may not occur. The
Companys actual results could differ significantly from those anticipated in the Companys forward-looking
statements.

vi
 TABLE OF CONTENTS

GLOSSARY OF TERMS ........................................................................................................... 1

EXECUTIVE SUMMARY............................................................................................. 6
SUMMARY OF THE OFFER ...................................................................................... 15
SUMMARY FINANCIAL AND OPERATING INFORMATION ............................. 21
RISK FACTORS........................................................................................................... 24
USE OF PROCEEDS.................................................................................................... 40
DESCRIPTION OF THE SHARES.............................................................................. 44
DIVIDENDS AND DIVIDENDS POLICY ................................................................. 50
DETERMINATION OF OFFER PRICE ...................................................................... 52
DILUTION .................................................................................................................... 53
PRINCIPAL AND SELLING SHAREHOLDERS ...................................................... 54
PLAN OF DISTRIBUTION ......................................................................................... 57
CAPITALIZATION AND INDEBTEDNESS ............................................................. 61
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
POSITION AND FINANCIAL PERFORMANCE ...................................................... 62
BUSINESS OVERVIEW.............................................................................................. 65
LEGAL PROCEEDINGS ........................................................................................... 105
INDUSTRY OVERVIEW .......................................................................................... 106
BOARD OF DIRECTORS AND SENIOR MANAGEMENT .................................. 133
RELATED PARTY TRANSACTIONS ..................................................................... 144
THE PHILIPPINE STOCK MARKET....................................................................... 146
REGULATORY FRAMEWORK............................................................................... 151
TAXATION ................................................................................................................ 162
Sale, Exchange or Disposition of Shares through an Initial Public Offering (IPO) ............... 165
Sale, Exchange or Disposition of Shares after the IPO ........................................................... 166
LEGAL MATTERS .................................................................................................... 168
INDEPENDENT AUDITORS .................................................................................... 169

vii
 GLOSSARY OF TERMS

In this Prospectus, unless the context otherwise requires, the following terms shall have the meanings set out
below.

AB Soberano AB Soberano Holdings Corp. (formerly known as A B Soberano International

Corporation)

Applicant A person, whether natural or juridical, who seeks to subscribe to the Firm
Shares by submitting an Application under the terms and conditions
prescribed in this Prospectus.

Application A subscription for the Firm Shares.

Ascott As used in this Prospectus, Scott Philippines, Inc., a wholly owned subsidiary
of The Ascott Limited.

Banking Day A day (except Saturdays, Sundays and holidays) on which banks in Makati
and Cebu City, Philippines are open for business.

Base Line Center A mixed-use development which includes Base Line Premier, Base Line HQ
and Citadines Cebu City.

BDO BDO Unibank, Inc.

BDO Capital BDO Capital & Investment Corporation; also referred to as Issue Manager
and/or Joint Lead Underwriter and/or Underwriter.

BDO Trust BDO Unibank, Inc. Trust and Investments Group Securities Services and
Corporate Agencies Department.

BERDE Building for Ecologically Responsible Design Excellence.

BIR Bureau of Internal Revenue.

Board or Board of The Board of Directors of the Company.

Directors

BOI Board of Investments.

BP 220 Batas Pambansa Blg. 220.

BPI Capital BPI Capital Corporation; also referred to as a Joint Lead Underwriter and/or
Underwriter.

BPO Business process outsourcing.

BSP Bangko Sentral ng Pilipinas, the central bank of the Philippines.

Building Code Presidential Decree No. 1096, or the National Building Code of the
Philippines.

Capex Capital expenditure.

Cebu Cebu Province which includes Metro Cebu.

CDO Cagayan de Oro City.

CLI Cebu Landmasters, Inc. and, where the context requires, together with its
subsidiary.

1
CMT The Companys Crisis Management Team composed of senior managers
appointed by the Chief Executive Officer.

CNC Certificate of Non-Coverage.

Common Shares The Companys shares of common stock, each with a par value of P1.00.

Company Cebu Landmasters, Inc. and, where the context requires, together with its
subsidiary.

Corporation Code Batas Pambansa Blg. 68, otherwise known as The Corporation Code of the
Philippines.

DAR Department of Agrarian Reform.

Davao Davao region including Davao City and Davao provinces.

DENR Department of Environment and Natural Resources.

DOLE Department of Labor and Employment.

EBITDA or Earnings Measures as net income excluding interest expense, interest income, provision
Before Interest, Taxes, for (benefit from) income tax and depreciation and depletion of property,
Depreciation and plant and equipment taken to profit or loss.
Amortization

ECC Environmental Compliance Certificate.

Economic housing Housing units sold at a price ranging from P450,000 to P3 million.

EGF Environmental Guarantee Fund.

EIS Environmental Impact Statement.

El Camino El Camino Developers Cebu, Inc.

Eligible Investors Applicants who are qualified to subscribe to the Firm Shares.

EMB Environmental Management Bureau of the DENR.

EMF Environmental Monitoring Fund.

IEE Initial Environmental Examination.

Firm Offer The offer and sale of [up to 505,000,000] Common Shares. The Firm Offer
will comprise (i) [up to 430,000,000] new Common Shares to be issued and
offered by the Company and (ii) [up to 75,000,000] existing Common Shares
offered by the Selling Shareholders.

Firm Shares [Up to 430,000,000] new Common Shares to be issued and offered by the
Company and (ii) [up to 75,000,000] existing Common Shares offered by the
Selling Shareholders.

GDP Gross Domestic Product.

GFA Gross Floor Area.

Government The Government of the Republic of the Philippines.

2
Habitat for Humanity Habitat for Humanity Philippines Foundation Inc.

High-end housing Residential units sold at a price of P4 million per unit or higher.

HLURB Housing and Land Use Regulatory Board.

IPO Initial Public Offering.

Issue Manager BDO Capital & Investment Corporation.

Issuer Cebu Landmasters, Inc.

Joint Lead Underwriters BDO Capital and BPI Capital

JV Joint venture

Listing Date [].

Local Small Investor A share subscriber or purchaser who is willing to subscribe or purchase a
(LSI) minimum board lot or whose subscription or purchase does not exceed
P25,000, or any amount as determined by the PSE.

Magspeak Magspeak Nature Park, Inc.

Manual The Manual on Corporate Governance of the Company.

Metro Cebu This comprises seven cities namely Cebu, Mandaue, Lapu-Lapu, Danao,
Talisay, Naga and Carcar, and six municipalities namely Compostela, Lilo-an,
Consolacion, Cordova, Minglanilla, and San Fernando.

Mid-market or mid-cost Housing units sold at a price ranging from P3 million to P4 million per unit.
housing

Ming-Mori Reclamation The 100-hectare reclamation project proposed by the Municipality of

Project Minglanilla, Cebu in partnership with Ming-Mori Development Corporation,
an affiliate of CLI, which has undertaken to finance, design, reclaim and
develop the property into the proposed Minglanilla TechnoBusiness Hub.

Offer The offer and sale of the Offer Shares.

Offer Period Period commencing at 9:00 a.m., Manila time on [] and ending at 12:00
noon, Manila time on [] for the sale of the Firm Shares.

Offer Price Up to P[6.56] per Offer Share.

Offer Shares The Firm Shares and the Optional Shares.

OFWs Overseas Filipino Workers.

Optional Shares Up to [75,000,000] Common Shares to be sold by the Selling Shareholders

and purchased by the Stabilizing Agent upon exercise of the Over-allotment
Option.

Over-allotment Option An option granted by the Selling Shareholders to the Stabilizing Agent,
exercisable within 30 days from and including the Listing Date, to purchase
Optional Shares.

P, PhP or Pesos Philippine Pesos, the lawful currency of the Republic of the Philippines.

Parent Company CLI only, excluding its subsidiary.

3
PCAB Philippine Contractors Accreditation Board.

PCD Philippine Central Depository.

PD 957 Presidential Decree No. 957, or the Subdivision and Condominium Buyers
Protective Decree, as amended.

P/E Price-to-Earnings, the ratio obtained by dividing a companys share price by

its earnings per share.

PDTC The Philippine Depository and Trust Corporation, the central securities
depositary of, among others, securities listed and traded on the PSE.

PEZA Philippine Economic Zone Authority.

PFRS Philippine Financial Reporting Standards.

Philippine Nationals Pursuant to the Foreign Investments Act of 1991 (Republic Act No. 7042, as
amended), the term shall mean any of the following:

(1) a citizen of the Philippines; or

(2) a domestic partnership or association wholly owned by citizens of the
Philippines; or
(3) a corporation organized under the laws of the Philippines of which at
least 60% of the capital stock outstanding and entitled to vote is
owned and held by citizens of the Philippines; or
(4) a corporation organized abroad and registered as doing business in
the Philippines under the Corporation Code of which 100% of the
capital stock outstanding and entitled to vote is wholly owned by
Filipinos; or
(5) a trustee of funds for pension or other employee retirement or
separation benefits, where the trustee is a Philippine national and at
least 60% of the fund will accrue to the benefit of the Philippine
nationals.

Where a corporation and its non-Filipino stockholders own stocks in an SEC-

registered enterprise, at least 60% of the capital stock outstanding and entitled
to vote of both corporations must be owned and held by citizens of the
Philippines and at least 60% of the members of the Board of Directors of both
corporations must be citizens of the Philippines, in order that the corporations
shall be considered a Philippine national.

Under SEC Memorandum Circular No. 08 dated May 20, 2013, for purposes
of determining compliance with the nationality requirement, the required
percentage of Filipino ownership shall be applied to both (a) the total number
of outstanding shares of stock entitled to vote in the election of directors, and
(b) the total number of outstanding shares of stock, whether or not entitled to
vote in the election of directors.

Philippine Tax Code Republic Act No. 8424, as amended, or the National Internal Revenue Code.

PRA Philippine Reclamation Authority.

Preferred Shares The Companys preferred shares, each with a par value of P[0.10].

Primary Offer The offer and sale of [up to 430,000,000] new Common Shares to be issued
and offered by the Company.

Primary Offer Shares [Up to 430,000,000] Firm Shares offered by the Company.

4
Prospectus This Prospectus together with all its annexes, appendices, supplements and
amendments, if any.

PSE The Philippine Stock Exchange, Inc.

PSE EDGE PSE Electronic Disclosure Generation Technology.

PSE Trading Entities authorized by the PSE to own and operate a trading right, pursuant to
Participants applicable PSE rules.

Q1, Q2, Q3, Q4 First quarter, second quarter, third quarter and fourth quarter, respectively.

Receiving Agent BDO Trust.

SCCP Securities Clearing Corporation of the Philippines.

SEC Securities and Exchange Commission of the Philippines.

Selling Agents Trading Participants of The Philippine Stock Exchange.

Selling Shareholders Jose R. Soberano III and Ma. Rosario B. Soberano.

Secondary Offer The offer and sale of [up to 75,000,000] existing Common Shares offered by
the Selling Shareholders.

Secondary Offer Shares [Up to 75,000,000] Firm Shares offered by the Selling Shareholders.

Securities Regulation Republic Act No. 8799, otherwise known as The Securities Regulation
Code Code and, as applicable, its implementing regulations.

SJMV San Jose Maria Villages.

Socialized housing Housing units sold at a price not exceeding P450,000 per unit.

sq. m. Square meters.

SRC Rules 2015 Implementing Rules and Regulations of the Securities Regulation Code
(Republic Act No. 8799)

Stabilizing Agent BDO Capital acting in such capacity.

Stock Transfer Agent BDO Trust.

Stock Transfer The Stock Transfer Agreement executed between the Company and the Stock
Agreement Transfer Agent.

Trading Day Any day on which trading is allowed in the PSE.

Underwriting The agreement entered into by and between the Company and the Joint Lead
Agreement Underwriters, indicating the terms and conditions of the Offer and providing
that the Offer shall be fully underwritten by the Joint Lead Underwriters.

VAT Value Added Tax.

VisMin Visayas and Mindanao

Yuson Yuson Comm. Investments, Inc.

5
 EXECUTIVE SUMMARY

The following summary is qualified in its entirety by the more detailed information presented in this
Prospectus, including the Companys audited consolidated financial statements and notes relating thereto.
For a discussion of certain matters that should be considered in evaluating an investment in the Firm
Shares, see the section of this Prospectus titled Risk Factors on page [24]. Investors are recommended
to read this entire Prospectus carefully.

OVERVIEW

CLI is the leading homegrown developer in Cebu. In just 12 years since it started operations, it has become
one of the top real estate players in the region with its growing mix of residential, commercial, hospitality,
industrial and mixed-use product offerings. CLI is the number one local condominium developer in Cebu
and among the top three players in the local housing market 2. CLI takes pride in its top-quality, award-
winning and innovative developments, strong market demand and absorption, fast-selling projects, timely
construction and delivery, and its hands-on and personalized approach which allows itself to respond
effectively to its clients and industry partners.

Compared with other homegrown developers in Visayas and Mindanao, CLIs proven track record covers a
more diverse range of real estate product offerings. It caters to the high-end, mid-market, economic and
socialized housing segments of the market. This ability to tailor-fit its projects to the best use of each site
has enabled it to maximize the favorable supply and demand indicators in Cebu, CDO, Davao, Dumaguete
and soon in Bacolod and Iloilo.

CLIs real estate offerings have consistently enjoyed strong market demand and absorption. CLI commands
an 11% market share in terms of the total supply of condominium units in Metro Cebu, second to Ayala
Land, Inc. (17%) and followed by Filinvest Land Inc. (8%) 3. In terms of the number of condominium units
sold, the Company has a 9% market share, second to Ayala Land, Inc. (17%) and tied with Filinvest Land
Inc. (9%)4. This makes CLI the number one local condominium developer in Cebu. For the current housing
market, CLI ranks among the top three Cebu players with a 10% market share. 5 CLI believes that its
market share is bound to grow even higher with its newly launched 3,000-unit Casa Mira project in the
south of Cebu. Even as CLI has diversified into high-rise residential, commercial and mixed-use
developments, it remains committed to its roots as a home developer, where its expertise has been
sharpened.

CLIs projects are usually sold-out at a higher selling velocity than competitors 6. Among its completed
projects, 96% of the inventory has been sold out. CLIs notable projects include its mid-rise residential
condominium format, Mivesa Garden Residences, and its economic housing brand, Casa Mira, both of
which have sold out in less than three months on average. The strong market demand for the Companys
projects, as evidenced by the fast absorption rate of its projects, translates into faster cash flows and
demonstrates CLIs ability to deplete its inventory at a faster rate.

Moreover, CLI takes utmost pride in its timely construction and delivery of projects, and it has even
outperformed national players in Cebu in that aspect. On average, the Company can convert raw land into a
completed project in less than two to three years depending on the project size. CLIs condominium
developments Base Line Residences, Park Centrale Tower, Mivesa Garden Residences (Phase 1), and
Midori Residences were delivered to the buyers in two years, as committed by the Company in its
marketing materials.

Across its 28 completed, ongoing and newly launched developments as of the date of the Prospectus, CLI
has over 11,000 units in various stages of construction. These units have an equivalent sales value of P30

2
Santos Knight Frank Market Study, September 16, 2016, p. 64.
3
Id., p. 56.
4
Id., p. 64.
5
Id, p. 65.
6
Id., p. 66.

6
billion. These are spread out among its growing number of commercial and high-end residential, mid-
market, economic and socialized housing projects.

For the three years ended December 31, 2014, 2015 and 2016, CLIs revenues amounted to 1.283 billion
1.545 billion and 2.178 billion, respectively. CLI has grown steadily in recent years, with net income
increasing from 433.54 million in 2014 to 702 .32 million in 2016, representing a compounded annual
growth rate (CAGR) of 27.28% during that period.

The Company aspires to be the leading and most preferred local developer in the Visayas and Mindanao by
2020.

Real estate development overview

The Companys project mix, which includes projects in various stages of development, is composed of
80% residential projects, 18% commercial/office developments and 3% hotel projects, measured in terms
of total sales value. To date, CLI has 13 completed developments, 15 projects in various stages of
development, and eight possible future projects where final definitive agreements are yet to be finalized
and signed.

Completed projects

The Companys 13 completed developments are a mix of vertical and horizontal residential projects and its
first commercial office development. Majority of the projects are fully sold out, showing that CLI is a
trusted brand in the local housing market in Cebu. Below is a list of the Companys completed projects to
date.

No. of Sold
Project Type Use
Units Units
1 San Jose Maria Village - Balamban Horizontal Mid-Market Housing 231 191
2 San Jose Maria Village - Minglanilla Horizontal Mid-Market Housing 145 145
3 San Jose Maria Village - Talisay Horizontal Mid-Market Housing 96 96
4 San Jose Maria Village - Toledo Horizontal Mid-Market Housing 144 84
5 Villa Casita Horizontal Socialized Housing 101 101
6 Midori Plains Horizontal Mid-Market Housing 370 369
7 Asia Premier Residences Vertical Residential Condo 88 88
8 Base Line Residences Vertical Residential Condo 201 201
9 Midori Residences Vertical Residential Condo 396 393
10 Park Centrale Tower Vertical Office Condo/BPO 50 50
11 Mivesa Garden Residences (Phase 1) Vertical Residential Condo 479 479
12 Velmiro Heights (Phase 1) Horizontal Mid-Market Housing 347 342
13 Casa Mira Linao Horizontal Economic Housing 725 725

Ongoing projects (under construction)

CLI has the following ongoing projects in various stages of construction. The projects are all located in
Metro Cebu, except for MesaVerte Residences which forms part of the Companys expansion in CDO.

Percentage
No. of Sold
Project Type Use of
Units Units
Completion
1. Base Line Center* Vertical Mixed-Use -
a. Base Line Premier Vertical Residential Condo 379 318 31%
b. Base Line HQ Vertical Office Condo/BPO 52 26 80%
c. Citadines Cebu City Vertical Hotel 92 76 30%

7
2. Casa Mira Towers Labangon Vertical Residential Condo 686 683
Tower 1 38%
Tower 2 12%
3. MesaVerte Residences (Phase 1) CDO Vertical Residential Condo 504 482
Tower 1 33%
Tower 2 27%
4. Mivesa Garden Residences (Phase 2)** Vertical Residential Condo 459 433 98%

*Base Line Center is a mixed-use development which includes Base Line Premier, Base Line HQ and Citadines
Cebu City.
**Mivesa Garden Residences (Phase 2) is expected to be completed and turned over to buyers by Q2 2017.

Other ongoing projects

In addition to its projects under construction, CLI has in its portfolio a mix of horizontal and vertical
housing projects in various stages of development. CLI has completed land development for MesaVerte
Residences (Phase 2) in CDO and is currently pre-selling the project. The Company is set to commence
land development and marketing efforts for the other Cebu-based projects in the table below.

Percentage
No. of Sold
Project Type Use of
Units Units
Completion
1. MesaVerte Residences (Phase Vertical Residential Condo 294 73 0%
2) Tower 3 CDO
2. Casa Mira South (Phase 1) Horizontal Economic Housing 1,007 623 5%
3. Casa Mira South (Phase 2) Horizontal Economic Housing 962 - 0%
4. Casa Mira South (Phase 3) Horizontal Economic Housing 1,273 - 0%
5. Mivesa Garden Residences Vertical Residential Condo 502 - 0%
(6-7) (Phase 3)
6. Velmiro Heights (Phase 2) Horizontal Mid-Market Housing 81 - 92%

Newly-launched projects

The Company has launched a roster of vertical mixed-use and residential developments in the last quarter
of 2016 to the first quarter of 2017 in Metro Cebu and Davao. Shortly after launching these latest projects,
CLI has started site preparations for Latitude Corporate Center and 38 Park Avenue at the Cebu IT Park,
respectively, and is now pre-selling both projects. Once the necessary permits are secured, CLI will
commence the development of its flagship project in Davao, MesaTierra Garden Residences.

CLIs newly-launched projects are the result of the Companys strategic collaboration with joint venture
partners, which enabled the Company to position itself in strategic locations and obtain the necessary
funding for prime property acquisitions, without straining its finances and limiting its capability to continue
existing projects.

Latitude Corporate Center is a project of BL CBP Ventures, Inc., a joint venture between CLI and
Borromeo Bros. Estate Inc. Meanwhile, 38 Park Avenue at the Cebu IT Park is a project of El Camino
Developers Cebu, Inc. (El Camino), a joint venture between the Company and several individual
partners. Lastly, MesaTierra Garden Residences Davao is a project of Yuson Excellence Soberano, Inc., a
joint venture between CLI and Yuson Comm. Investments, Inc. (Yuson). In all these JV projects, CLI
has been appointed as the project developer and manager and is entitled to receive management fees.

No. Of Sold
Project Type Use
Units Units
1. Latitude Corporate Center, Cebu Vertical Office Condo/BPO 83 63
Business Park
2. 38 Park Avenue at the Cebu IT Vertical Residential/Retail 744 --
Park
3. MesaTierra Garden Residences Vertical Residential Condo 650 --

8
 Davao

Pipeline projects

In 2017, CLI is set to launch several projects in Metro Cebu such as the AS Fortuna Center Mandaue, a
mixed-use project along A.S. Fortuna Avenue, a bustling business and residential corridor located in
Mandaue City, Cebu. The Company intends to develop this 9,989-sq.m. property with its joint venture
partners as a boutique mall with a residential, office and commercial component. The Company will also
launch Base Line Center (Phase 2) and Casa Mira Towers Guadalupe this year.

It has also positioned itself in the next two years with key pipeline projects in VisMin such as Casa Mira
Coast in Dumaguete, Velmiro Heights in CDO and Casa Mira Bacolod.

Project Type Use Location

1. AS Fortuna Center Mandaue Vertical Mixed-use Mandaue, Cebu
2. Casa Mira Coast Horizontal Residential Sibulan, Dumaguete
3. Base Line Center (Phase 2) Vertical Residential Cebu City
4. Velmiro Heights CDO Horizontal Residential CDO
5. Casa Mira Towers - Guadalupe Vertical Residential Cebu City
6. Casa Mira Bacolod Vertical Residential Bacolod City

Prospects

The Company is also looking into possible future projects with its existing JV partners and associates.
While the definitive agreements for these projects have yet to be finalized and signed, the Company is
either firming up negotiations with landowners, or is intending to sign an agreement with its JV partner or
associate for CLI to be the project developer and manager.

Among the projects that CLI is looking into is its public-private partnership with the Municipality of
Minglanilla through its affiliate Ming-Mori Development Corporation. CLI has subscribed to shares
equivalent to 19.87% of Ming-Mori, the issuance of which is subject to the approval by the SEC of Ming-
Moris increase in authorized capital stock. The Company intends to diversify into industrial development
through Ming-Moris proposal to finance, design and undertake the Ming-Mori Reclamation Project which
was accepted and endorsed by the municipal council of the Municipality of Minglanilla in May 2013. The
Municipality of Minglanilla has submitted to the PRA a letter of intent to undertake the reclamation and
land development of the proposed project, and in December 2016, the Municipality entered into a
Memorandum of Understanding with the PRA setting out requirements and timeline for the review and
evaluation of the project.

Should the Minglanilla Reclamation Project materialize and be awarded to Ming-Mori after completing
public bidding and Swiss challenge requirements, as applicable, Ming-Mori plans to enter into an
agreement where CLI will be appointed as the project developer and manager, and for which CLI will be
paid a management fee as may be agreed by the parties.

Once the reclamation is complete, CLI will develop and manage the proposed Minglanilla TechnoBusiness
Hub, a 100-hectare techno-business park in the progressive town of Minglanilla, a mere 30 minutes away
from Cebu City. With Cebus scarce supply of industrial properties that are in close proximity to highly
urbanized areas, this project is expected to generate over 75,000 jobs.

On the other hand, the Companys associate, Magspeak Nature Park, Inc.7 (Magspeak) plans to develop
a 30-hectare outdoor leisure park and conference center to be launched in 2017 in Mt. Manunggal, the
highest mountain in Cebu.

7
As of the date of the Prospectus, Mr. Jose R. Soberano, III has executed a Deed of Assignment in favor of CLI for his
shares in Magspeak, but the BIR Certificate of Registration of the shares is still being processed.

9
The Company is also completing the acquisition of the land where Casa Mira Towers Guadalupe will be
constructed. The Company plans to construct a Grade A office building on its 1.17-hectare property inside
the Cebu IT Park to be named the Park Avenue Corporate Center. Lastly, the Company is in talks with
several landowners for its planned Mactan Hotel Project.

Meanwhile, the two Davao mixed-use developments are intended as future projects of the Company and
Yuson, subject to the final agreement between the parties.

In Iloilo, the Company is finalizing the acquisition of a property as it is targeting to launch Casa Mira Iloilo
by Q3 2017.

CLI will also position itself in the booming tourism hub of Bohol, eyeing to bring its economic housing
brand, Casa Mira, which will suit locals benefiting from the growing economic activity and Bohol OFWs.

Project Type Use Location

1. Minglanilla TechnoBusiness Hub Horizontal Mixed-use Cebu
2. Magspeak Leisure Park Horizontal Recreational Cebu
3. Casa Mira Towers - Guadalupe Vertical Residential Cebu
4. Park Avenue Corporate Center Vertical Office Condo/BPO Cebu
5. Mactan Hotel Project Vertical Hotel Cebu
6. Davao Mixed Use - Riverside Vertical Mixed-use Davao
7. Davao Mixed Use - Times Beach Vertical Mixed-use Davao
8. Casa Mira Iloilo Horizontal Residential Iloilo
9. Casa Mira Bohol Horizontal Residential Bohol

Residential development

CLIs initial forte is in residential development. It created a niche when it started developing low to middle
cost subdivisions in the south of Cebu, with house and lot packages ranging from P2 million to P5 million.
Today, CLI is one of the leading horizontal and vertical residential players in Cebu. More importantly, CLI
has diversified its residential offerings to cater to the four major market segments socialized, economic,
mid-market and high-end.

High-end residential developments have a price of more than P4 million per unit, while mid-market
housing projects are priced at P3 million to P4 million per unit. Economic housing should be priced at
within the range of P450,000 to P3 million. Meanwhile, to qualify as socialized housing, the price of the
housing units must not exceed P450,000.

The list below categorizes the projects according to market segments:

Horizontal (Subdivision) Projects:

Socialized: Villa Casita, Guadalupe Pinamalayan Socialized Housing Project

Economic: Casa Mira Linao, Casa Mira South
Mid-Market: San Jose Maria Villages, Midori Plains, Velmiro Heights

Vertical (Condominium) Projects:

Economic: Casa Mira Towers Labangon, Casa Mira Towers Guadalupe (2017)
Mid-Market: Midori Residences, Mivesa Garden Residences, MesaVerte Residences CDO
High-End: Asia Premier Residences, Base Line Residences, Base Line Premier

Commercial development

CLI capitalized on the growth of the BPO sector in Cebu when it launched its first commercial office
project, Park Centrale Tower, in 2013 at the Cebu IT Park. This is also part of CLIs strategy of
significantly growing its recurring income properties. It has also launched two more office developments in

10
prime Cebu City locations, namely Base Line HQ and Latitude Corporate Center. Base Line HQ will be
part of the Base Line Center mixed-use development and will be completed in Q1 2019. In November
2016, CLI launched Latitude Corporate Center, a Grade A office tower at the Cebu Business Park with a
GFA of 35,000 sq.m.

Office Buildings: Park Centrale Tower, Base Line HQ, Latitude Corporate Center, Park Avenue
Corporate Tower

Mixed-use development

With its growing brand, experience and portfolio, CLI pursued larger scale developments in prime urban
locations. CLIs first major mixed-use development is the Base Line Center, a 1.6-hectare modern
redevelopment in the heart of midtown Cebu. The Company removed the existing structures in the old Base
Line, a well-known favorite gathering place of Cebuano families, and built a mixed-use development.
Phase 1 of Base Line Center will be completed in Q1 2019. It will house a retail center, residential
condominium units, offices and the first Ascott-managed property outside Manila, the Citadines Cebu City.

This 2017, CLI is set to launch another major mixed-used development, the AS Fortuna Center, in the
booming AS Fortuna Mandaue area, a growing commercial district and the major thoroughfare that
connects Cebu and Mandaue. This medium-density project will house a hotel, residential, office and
boutique mall.

CLI, through its joint venture, El Camino, also recently acquired a 1.17-hectare property inside the Cebu IT
Park, the largest remaining private property inside the prestigious address. This property called 38 Park
Avenue at the Cebu IT Park, will be transformed into a mixed-use urban park with a 38-storey residential
tower, BPO office and retail boulevard.

Mixed-Use Developments: Base Line Center, AS Fortuna Center Mandaue, 38 Park Avenue at the
Cebu IT Park

Hotel and recreational development

Aside from residential and commercial developments, CLI has recently entered the hospitality business
after sealing a partnership with Scotts Philippines, Inc., a wholly-owned subsidiary of The Ascott Limited
(Ascott), the worlds largest serviced residence operator. CLI will develop Citadines Cebu City, with
Ascott as the hotel operator. Citadines Cebu City will house over 180 rooms, of which 92 condotel units
were offered for sale and 88 units will be retained by the Company.

As part of the upcoming AS Fortuna Center, CLI will add a second hotel property to its portfolio. As of Q1
2017, the Company is still evaluating potential global management brands that will run the hotel.

A third hotel, the Mactan Hotel Project, is part of the Companys future prospects as the Company is
currently negotiating with property owners of key sites in Cebus resort haven, Mactan Island.

Meanwhile, the Companys associate, Magspeak plans to develop the Magspeak Leisure Park, a 30-hectare
outdoor leisure park and conference center in Mt. Manunggal to be launched in 2017.

Hotel and Recreational Development: Citadines Cebu City, AS Fortuna Center Hotel Project,
Mactan Hotel Project, Magspeak Leisure Park

Industrial development

CLI intends to diversify into industrial development through its associate, Ming Mori, which has proposed
to finance, design and undertake the Ming-Mori Reclamation Project through private-public partnership
with the Municipality of Minglanilla. The proposal of Ming-Mori was accepted and endorsed by the
municipal council of the Municipality of Minglanilla in May 2013 and since then, the Municipality of
Minglanilla has submitted to the PRA a letter of intent to undertake the reclamation and land development
of the proposed project.

11
In December 2016, the Municipality entered into a Memorandum of Understanding with the PRA setting
out requirements and timeline for the review and evaluation of the project, and as of the date of this
Prospectus, CLI has subscribed to shares equivalent to 19.87% of Ming-Mori, the issuance of which is
subject to the approval by the SEC of Ming-Moris increase in authorized capital stock.

This project is intended to be the Companys initial foray into the industrial property segment. See
Business Overview Prospects on page [66] of this Prospectus.

Industrial: Minglanilla TechnoBusiness Hub

Regional expansion

CDO

After 20 developments in Cebu, CLI debuted its first regional expansion when it launched its MesaVerte
Residences in CDO. MesaVerte Residences is a three-tower condominium complex in the heart of
downtown CDO and is expected to be completed by Q4 2018. A second project in CDO is in the pipeline
this 2017 as CLI will be launching Velmiro Heights CDO, a mid-market housing project in the Pueblo De
Oro area.

Davao

CLI has recently positioned itself in Davao where it introduced its highly successful mid-market
condominium format. The Company launched in Q1 2017 MesaTierra Garden Residences, a 21-storey
residential condominium with over 694 units, located on E. Jacinto St., Davao, which is targeted for
completion by Q3 2020.

The Company is also firming up its plans to develop two mixed-use projects in Davao, (1) a 1.9-hectare
riverside mixed-use project along McArthur Highway, and (2) another major mixed-use lifestyle project in
a four-hectare property in Times Beach, Matina.

Dumaguete

The Company has recently completed the acquisition of a six-hectare property in Sibulan, Dumaguete. This
will be the site of another Casa Mira economic housing development. Situated near the coastline, the
project will be called Casa Mira Coast.

Bacolod

Going further into other areas in the Visayas to roll out its economic housing brand Casa Mira, CLI has
completed the acquisition of a one-hectare property in Bacolod. The Company intends to launch Casa Mira
Bacolod by Q3 2017.

Iloilo

The Company is finalizing the acquisition of a property in Iloilo as the Company is set to launch Casa Mira
Iloilo in Q3 2017.

With its diverse portfolio, CLI is able to tailor-fit its various product offerings to address the right supply
and demand indicators and maximize the full potential of a property.

Regional Developments:

CDO: MesaVerte Residences, Velmiro Heights CDO (2017)

Davao City: MesaTierra Garden Residences (2017), Mixed-Use (McArthur /
Matina)
Dumaguete: Casa Mira Coast (2017)
Iloilo: Casa Mira Iloilo (2017)
Bacolod: Casa Mira Bacolod (2017)
Bohol: Casa Mira Bohol (2017)

12
COMPETITIVE STRENGTHS

The Company considers the following as its competitive strengths:

Leading property developer in Cebu with a distinguished brand and reliable track record of project
execution
Strategic location selection to provide value for money proposition to customers
Diversified portfolio of projects and socio-economic markets
Experienced management team and organizational culture
Socially responsible development
Strategic joint venture partnerships
Financial strength
Operational excellence

KEY STRATEGIES

The Companys business strategies include the following:

Expansion to key in cities in the Visayas and Mindanao

Building recurring income developments
Vertical integration property management and construction companies
Growth of economic housing brand (Casa Mira)
Capitalizing on pipeline projects
Establish and leverage strategic partnerships, alliances, joint ventures and cooperation

Risks of Investing

Before making an investment decision, prospective investors should carefully consider the risks associated
with an investment in the Offer Shares. Some of these risks are discussed in the section entitled Risk
Factors and include risks relating to business, risks relating to the Philippines, and risks relating to the
Offer and the Offer Shares and in this Prospectus.

Corporate Information

The registered office of the Company is at the 10th Floor, Park Centrale Tower, Cebu I.T. Park, J. M. del
Mar Street, Apas, Cebu City, Philippines. The Companys telephone number at this location is +63 (032)
231-4914 and 231-4870.

The Companys website is www.cebulandmasters.com.

Investor Relations Office

The Company has developed an Investor Relations Program which will reflect standards of disclosure,
dialogue and transparency, to foster quality communication flows between the Company and its
stockholders.

Stephen A. Tan will serve as the Companys designated Investor Relations Officer (IRO). The IRO will
prepare and handle all corporate communications intended for dissemination to the public and handle
feedback and comments from stakeholders.

Through its Investor Relations Program, the Company will make regular use of various communication
channels such as press releases, emails, investor presentations, regulatory disclosures and face-to-face
meetings, to disseminate correct and up-to-date information on the Company, promote investors
awareness of developments in the Company and effectively address concerns or issues of stakeholders.

The IRO may be contacted through the following contact details:

STEPHEN A. TAN

13
 10th Floor, Park Centrale Tower, Cebu I.T. Park, J. M. del Mar Street
Apas, Cebu City, Philippines
Telephone number: (032) 231-4914
Email address: stephen@cebulandmasters.com

Atty. Larri-Nil G. Veloso serves as the Companys Compliance Officer with respect to disclosures and
continuing requirements of the SEC and the PSE.

Information Relating to the Common Shares

Authorized capital stock P2,500,000,000

Common Shares outstanding before the Offer 1,284,000,000

Total Issued and Outstanding Common Shares 1,284,000,000

before the Offer

Common Shares issued and outstanding after the 1,714,000,000

Offer

Market Capitalization at the Offer Price of up to P[11,243,840,000]

P[6.56] per Offer Share*
___________
*Computed at the Offer Price of up to P[6.56] multiplied by the equivalent number of Common Shares
issued and outstanding after the Offer. The PSE computes market capitalization based on the number of
listed shares multiplied by the market price. Article III, Part A, Section 9 of the Revised Listing Rules of the
PSE provides that [a]ll issued and outstanding securities of the type and class applied for, including
treasury shares shall be applied for listing in the Exchange.

14
 SUMMARY OF THE OFFER

The following does not purport to be a complete listing of all the rights, obligations, and privileges
attaching to or arising from the Offer Shares. Some rights, obligations, or privileges may be further limited
or restricted by other documents and subject to final documentation. Prospective investors are enjoined to
perform their own independent investigation and analysis of the Company and the Offer Shares. Each
prospective investor must rely on its own appraisal of the Company and the Offer Shares and its own
independent verification of the information contained herein and any other investigation it may deem
appropriate for the purpose of determining whether to invest in the Shares and must not rely solely on any
statement or the significance, adequacy, or accuracy of any information contained herein. The information
and data contained herein are not a substitute for the prospective investors independent evaluation and
analysis.

Issuer....... Cebu Landmasters, Inc.

Selling Shareholders.......... Jose R. Soberano III

Ma. Rosario B. Soberano

Issue Manager ... BDO Capital & Investment Corporation

Joint Lead Underwriters .. BDO Capital and BPI Capital

Underwriters . BDO Capital, BPI Capital and []

Selling Agents PSE Trading Participants

The Offer Offer of up to [505,000,000] Firm Shares, consisting of up to [430,000,000]

new Common Shares representing the Primary Offer Shares to be offered by
the Company through the Primary Offer and up to [75,000,000] existing
Common Shares representing the Secondary Offer Shares to be offered by the
Selling Shareholders through the Secondary Offer, together with an offer of up
to [75,000,000] existing Common Shares representing the Optional Shares to
be offered pursuant to the Over-allotment Option (as described below).

Offer Shares .. The Firm Shares and the Optional Shares

Offer Price.. The Offer Shares are being offered at the price of up to P[6.56] per Offer
Share, which was established through a book-building process and discussions
among the Company, the Selling Shareholders and the Joint Lead
Underwriters.

Over-allotment Option .
The Selling Shareholders have granted the Stabilizing Agent, BDO Capital,
acting for and on behalf of the Joint Lead Underwriters an overallotment
option, exercisable in whole or in part, to purchase up to 75,000,000 Optional
Shares at up to the Offer Price, on the same terms and conditions as the Firm
Shares as set out in this Prospectus, solely to cover over-allotments, if any,
and effect price stabilization transactions. The Over-allotment Option is
exercisable from time to time for a period which shall not exceed [30]
calendar days from and including the Listing Date. See Plan of
DistributionThe Over-allotment Option on page [57] of this Prospectus.

Offer Period The Offer Period shall commence at 9:00 a.m., Manila time on [] and end at
12:00 noon, Manila time on []. The Company and the Joint Lead
Underwriters reserve the right to extend or shorten the Offer Period, subject
to the approval of the PSE.

Applications must be received by the Receiving Agent not later than 12:00
noon, Manila Time on []. Applications received thereafter or without the
required documents will be rejected.

15
 Applications shall be considered irrevocable upon submission to a Selling
Agent or an Underwriter, and shall be subject to the terms and conditions of
the Offer as stated in this Prospectus and in the application. The actual
purchase of the Offer Shares shall become effective only upon the actual
listing of the Offer Shares on the PSE and upon the obligations of the Joint
Lead Underwriters under the Underwriting Agreement becoming
unconditional and not being suspended, terminated or cancelled on or before
the Listing Date in accordance with the provisions of such agreement.

Use of Proceeds . The Company intends to use the net proceeds from the Primary Offer to fund
(i) key land acquisitions, (ii) development costs of the Companys new
projects; (iii) investment in joint ventures and associates, (iv) debt repayment
and (v) general corporate purposes. See Use of Proceeds on page [39] of this
Prospectus.

Minimum Subscription. Each Application must be for a minimum of [1,000] Offer Shares, and
thereafter, in multiples of [1,000] Offer Shares. Applications for multiples of
any other number of shares may be rejected or adjusted to conform to the
required multiple, at the discretion of the Company.

Eligible Investors and The Offer Shares may be subscribed for or held by any person of legal age or
Restrictions on duly organized and existing corporations, partnerships or other corporate
Ownership... entities regardless of nationality, subject to the Companys right to reject an
application or reduce the number of Offer Shares applied for subscription or
purchase if the same will cause the Company to be in breach of the Philippine
capital ownership requirements under relevant Philippine laws. See Foreign
Ownership Restriction on page [18] of this Prospectus.

Procedure for The Application forms to purchase the Offer Shares may be obtained from the
Application. Joint Lead Underwriters or any Selling Agent. All Applications shall be
evidenced by the Application to Purchase form duly executed in each case by
the Applicant himself or by any authorized signatory of the Applicant,
accompanied (i) by two completed signature cards which, for corporate and
institutional Applicants, should be authenticated by the corporate secretary,
and for individual applicants, should be authenticated by the Joint Lead
Underwriters and broker which forwarded the application, and the
corresponding payment for the Offer Shares covered by the Application and
(ii) all other required documents. The duly executed Application form and
required documents should be submitted during the Offer Period to the same
office of the Joint Lead Underwriters or the Selling Agent where it was
obtained.

If the Applicant is a corporation, partnership or trust account, the Application

must be accompanied by the following documents:

A certified true copy of the Applicants latest articles of incorporation

and by-laws (or articles of partnership in the case of a partnership) and
other constitutive documents (each as amended to date) duly certified by
its corporate secretary;

A certified true copy of the Applicants SEC certificate of registration

duly certified by its corporate secretary (or managing partner in the case
of a partnership); and

A duly notarized corporate secretarys certificate (or certificate of the

managing partner in the case of a partnership) setting forth the resolution
of the Applicants board of directors or equivalent body authorizing the
purchase of the Offer Shares indicated in the Application to Purchase,
identifying the designated signatories authorized for the purpose,

16
 including his or her specimen signature, and certifying to the percentage
of the Applicants capital or capital stock held by Philippine citizens
and/or corporations, if any.

Foreign corporate and institutional Applicants which qualify as Eligible

Investors, in addition to the documents listed above, are required to submit in
quadruplicate a document signed by an authorized signatory setting out their
representation and warranty that their purchase of the Offer Shares to which
their Application relates will not violate the laws of their jurisdiction of
incorporation or organization, and that they are allowed under such laws, to
acquire, purchase and hold the Offer Shares.

Submission of the completed Application to Purchase to the PSE Trading

Participants or the Joint Lead Underwriters shall constitute an instruction and
authority by the Applicant to the Company and/or the Joint Lead
Underwriters to execute any application form or other documents and
generally to do all such other things as the Company and/or the Joint Lead
Underwriters may consider necessary or desirable to effect the registration in
the name of the Applicant of the Offer Shares applied for, or any lesser
number in respect of which an Application may be accepted in the stock and
transfer book of the Company. The Applicant shall undertake to sign all
documents and to do all other acts necessary to enable the Applicant to be
registered as the owner of the Offer Shares applied for or any lesser number
in respect of which an Application may be accepted, subject to the Articles of
Incorporation and the Bylaws of the Company, and the laws of the Republic
of the Philippines.

Payment Terms The Offer Shares must be paid in full upon submission of the Application.
Payment must be made by personal check, corporate check, managers check
or cashiers check drawn against a bank account with a BSP- authorized agent
bank or any branch thereof located in Metro Manila to the order of [Cebu
Landmasters IPO] and crossed Payees Account Only. The check must be
dated as of the date of submission of the Application. Checks subject to
clearing periods of over three banking days shall not be accepted.

Acceptance/Rejection of The actual number of Offer Shares that an Applicant will be allowed to
Applications subscribe for in the Offer is subject to the confirmation of the Joint Lead
Underwriters in consultation with the Company. Application shall be subject
to the final approval of the Company. The Company reserves the right to
accept or reject, in whole or in part, any Application due to any grounds
specified in the Underwriting Agreement entered into by the Company and
the Joint Lead Underwriters. Applications where checks are dishonored upon
first presentation and Applications which do not comply with the terms of the
Offer shall be rejected. Moreover, any payment received pursuant to the
Application does not mean approval or acceptance by the Company of the
Application.

An Application, when accepted, shall constitute an agreement between the

Applicant and the Company for the subscription to the Offer Shares at the
time, in the manner and subject to terms and conditions set forth in the
Application and those described in this Prospectus. All Applications accepted
by the Company may not be unilaterally revoked or cancelled by the
Applicant, in full or in part, and the rights and privileges pertaining thereto
are non-transferable.

Notwithstanding the acceptance of any Application, the actual subscription

and purchase by the Applicant of the Offer Shares will become effective only
upon listing of the Offer Shares on the PSE and upon the obligations of the
Joint Lead Underwriters under the Underwriting Agreement becoming
unconditional and not being suspended, terminated, cancelled, on or before

17
 the Listing Date, in accordance with the provisions of such agreement. If such
conditions have not been fulfilled on or before the period provided above, all
the application payments will be returned to the Applicants without interest
and, in the meantime, said application payments will be held in a separate
bank account with the Receiving Agent.

Refunds In the event that the number of Offer Shares to be received by an Applicant,
as confirmed by the Joint Lead Underwriters, is less than the number covered
by its Application, or if an Application is rejected by the Company, then the
applicant is entitled to refund, without interest, within five Banking Days
from the end of the Offer Period, of all or a portion of the payment
corresponding to the number of Offer Shares wholly or partially rejected. All
refunds shall be made through the Joint Lead Underwriters or the Selling
Agent with whom the Applicant has filed the Application, at the Applicants
risk.

Registration and Lodgment of The Offer Shares are required to be lodged with PDTC. The Applicants must
Shares with provide the required information in the space provided in the Application to
PDTC effect the lodgment. The Offer Shares will be lodged with the PDTC at least
two Trading Days prior to the Listing Date.

The Applicant may request for the uplifting of their shares and to receive
stock certificates evidencing their investment in the Offer Shares through
his/her broker after the Listing Date. Any expense to be incurred by such
issuance of certificates shall be borne by the Applicant.

Registration of Foreign The BSP requires that investments in shares of stock funded by inward
Investments remittance of foreign currency be registered with the BSP if the foreign
exchange needed to service capital repatriation or dividend remittance will be
sourced from the banking system. The registration with the BSP of all foreign
investments in the Offer Shares will be the responsibility of the foreign
investors.

Restrictions on Foreign The Offer Shares may be subscribed by any individual of legal age, or by any
Ownership corporation, association, partnership or trust, regardless of citizenship or
nationality. However, as the Company owns land and may engage in or enter
into certain types of infrastructure contracts, Philippine laws limit the foreign
shareholdings in the Company to a certain percentage.

As of the date of this Prospectus, the Company owns land and is therefore
required by the Philippine Constitution and related statutes to be a Philippine
national by limiting foreign ownership in the Company to a maximum of 40%
of its outstanding capital stock.

In the event that foreign ownership of the Companys outstanding capital

stock will exceed such allowable maximum percentage, the Company has the
right to reject a transfer request by a stockholder to persons other than
Philippine nationals and has the right not to record such purchases in the
Companys books.

Moreover, if any share is inadvertently issued and/or transferred in violation

of the said restriction, the shares issued and/or transferred in excess of the
allowable maximum percentage shall be null and void and the Company may
immediately proceed to cancel, and demand the surrender of the certificate of
stock covering such shares. Should any stockholder acquire shares in excess
of the foregoing restriction, such stockholder shall not be considered a
stockholder and shall have no right with respect to such shares except to
demand payment therefore from the Company or transferor, as the case may
be, or to dispose of the same to qualified shareholders within 30 days of
receipt of notice from the Company.

18
 For more information relating to restrictions on the ownership of the Offer
Shares, see the discussion under Risk Factors on foreign ownership
limitations on page [38] of this Prospectus.

Restriction on Issuance and Existing shareholders who own an equivalent of at least 10% of the issued
Disposal of and outstanding Common Shares of the Company are required under the
Shares....... revised listing rules of the PSE applicable to companies applying for listing
on the PSE Main Board, not to sell, assign or otherwise dispose of their
Common Shares for a minimum period of 180 days after the Listing Date.

The Revised Listing Rules of the PSE also require that if there is any issuance
or transfer of shares or securities (i.e., private placements, asset for shares
swap or a similar transaction) or instruments which lead to issuance of shares
or securities (i.e., convertible bonds, warrants or a similar instrument) done
and fully paid for within 180 days prior to the start of the offering period, and
the transaction price is lower than that of the Offer Price in the initial public
offering, all shares or securities availed of shall be subject to a lock-up period
of at least one year from listing of the shares or securities.

The shares held by the following shareholders will be subject to the lock-up
period specified below:

Shareholder No. of % Total % Total of % Total of Period

Common of Shareholdi Shareholding of
Shares Shareho ng after the Assuming Lock-
Held before lding Firm Offer Full Exercise up
the Offer before of the Over-
the allotment
Offer Option
AB Soberano Holdings 985,823,197 76.78% 76.78% 57.52% 180
Corp. days
Jose R. Soberano III 134,125,000 10.45% [5.64%] 3.45% 180
days
Ma. Rosario B. 134,125,000 10.45% [5.64%] 3.45% 180
Soberano days
Jesus N. Alcordo 1 nil nil nil 1 year
Rufino Luis Manotok 1 nil nil nil 1 year
Ma. Aurora D Geotina- 1 nil nil nil 1 year
Garcia

To implement this lock-up requirement, the PSE requires, among others, to

lodge the shares with the PDTC through a participant of the PDTC system for
the electronic lock-up of the shares or to enter into an escrow agreement with
the trust department or custodian unit of an independent and reputable
financial institution.

The Company and the Selling Shareholders listed above, being subject to the
lock-up requirement, will enter into an escrow agreement with BDO Trust as
the escrow agent thereunder. See Plan of Distribution on page [55] of this
Prospectus for further details.

Listing and Trading.. The Companys application for the listing of the Common Shares was
approved by the PSE on []. All of the Common Shares in issue or to be
issued including the Offer Shares are expected to be listed on the Main Board
of the PSE on []. Trading is expected to commence on the same date.

Expected Timetable. The expected timetable of the Offer is tentatively scheduled as follows:

Pricing Date []

Notification of Final Offer Price to PSE

[]

Start of the Offer Period []

19
Deadline for Trading Participants
Submission of Undertaking to Purchase
[]

Deadline for LSI and General Publics

Submission of Application []

End of Offer Period []

Listing Date and Commencement of

Trading on the PSE []

20
 SUMMARY FINANCIAL AND OPERATING INFORMATION

The following tables present summary financial information for the Company and should be read in
conjunction with the Companys Audited Consolidated Financial Statements as of and for the years ended
December 31, 2016, 2015 and 2014, and notes relating thereto, all included elsewhere in this Prospectus,
as well as the section of this Prospectus entitled Managements Discussion and Analysis of Financial
Position and Financial Performance. They are not indicative of results of future operations.

Statements of Financial Position

(All amounts in Philippine Pesos)

As at December 31
2014 2015 2016
(Restated) (Restated)

ASSETS
Current Assets
Cash and cash equivalents 114,482,457 123,644,624 90,617,743
Receivables net 794,796,047 1,206,274,995 2,069,449,137
Real Estate Inventory 1,473,711,694 1,439,841,508 1,831,424,419
Deposits on land for future
development 45,000,000 77,559,615 259,897,127
Advances to related parties
net 188,388,936 171,583,998 26,739,222
Prepayments and other
current assets 67,832,682 98,262,868 102,631,805
Total Current Assets 2,684,211,816 3,117,167,608 4,380,759,453
Noncurrent Assets
Receivables - net 646,299 56,183,701 184,374,872
Available-for-Sale financial
assets 40,611,133 49,768,275 54,133,275
Investment in associates
and joint ventures - 12,680,055 242,935,316
Property and equipment
net 24,573,652 75,260,214 164,166,429
Investment properties net 66,545,864 327,660,513 297,664,109
Other noncurrent assets 8,657,782 12,183,334 22,878,048
Total Noncurrent
Assets 141,034,730 533,736,092 966,152,049
TOTAL ASSETS 2,825,246,546 3,650,903,700 5,346,911,502

LIABILITIES AND
EQUITY
Interest-bearing loans 568,880,691 532,768,097 787,980,146
Trade and other payables 381,779,926 357,055,481 487,447,566
Customers deposits 306,110,150 423,651,373 456,968,051
Reserve for property
development 157,292,283 205,620,988 327,236,408
Total Current
Liabilities 1,414,063,050 1,519,095,939 2,059,632,171
Noncurrent Liabilities
Interest-bearing loans 431,047,895 801,653,906 1,604,059,047
Trade and other payables 43,486,403 21,810,990 16,956,129
Post-employment defined
benefit obligation 2,737,398 5,023,696 2,105,858
Deferred tax liability - net 22,839,807 59,714,086 125,919,779
Total Noncurrent
Liabilities 500,111,503 888,202,678 1,749,040,813
Total Liabilities 1,914,174,553 2,407,298,617 3,808,672,984
Equity

21
Capital stock 537,690,000 837,690,000 1,284,000,000
Revaluation reserves (80,998) (2,718,140) (6 25,202)
Retained earnings (Deficit) 373,462,991 408,633,223 254,863,720
Total Equity 911,071,993 1,243,605,083 1,538,238,518
TOTAL LIABILITIES
AND EQUITY 2,825,246,546 3,650,903,700 5,346,911,502

Statements of Profit or Loss

(All amounts in Philippine Pesos)

For the years ended December 31

2014 2015 2016

Revenues
Sale of real estate 1,279,415,168 1,532,930,791 2,139,479,877
Rental 4,216,300 12,555,220 38,870,444
1,283,631,468 1,545,486,011 2,178,350,321
Cost of sales and rental 578,300,212 671,832,331 1,010,348,131
Gross profit 705,331,256 873,653,680 1,168,002,190
Operating expenses (235,351,833) (268,561,092) (335,832,043)

Other Operating income 16,673,709 13,012,072 17,525,070

Operating profit 486,653,132 618,104,660 849,695,217
Finance costs (10,388,266) (10,258,035) (16,572,078)
Other losses - (11,897,711)
Finance income 882,843 366,416 477,973
Other gains 1,239,822 - 6,353,291
Profit before tax 478,387,531 608,213,041 828,056,692
Tax expense 44,838,119 71,042,809 125,732,738
NET INCOME / (LOSS) 433,549,412 537,170,232 702,323,954

Statements of Cash Flows

(All amounts in Philippine Pesos)

2014 2015 2016

Cash flows from operating
activities (242,133,069) (96,478,606) (487,622,429)
Cash flows from investing
activities (200,293,644) (15,541,660) (176,346,571)
Cash flows from financing
activities 447,373,042 121,182,433 630,942,119

Key Performance Indicators

The Company uses a range of financial and operational key performance indicators (KPIs) to
help measure and manage its performance. These KPIs reflect the Companys continuous focus
on efficiency, cost control and profitability across all its operations. The management considers
the following as KPIs:

2014 2015 2016

Gross Profit Margin1 55% 57% 54%
Net Income Margin2 34% 35% 32%
EBITDA3 500,324,950 631,017,838 875,935,842

22
EBITDA Margin4 39% 41% 40%
Return on Assets5 15% 15% 13%
Return on Average Equity6 50% 50%
Current Ratio7 1.90 2.05 2.13
Debt to Equity Ratio8 1.10 1.07 1.56
Interest Coverage Ratio9 48.16 61.51 52.86

1
Gross Profit Margin is gross profit as a percentage of revenues
2
Net Income Margin is net income as a percentage of revenues
3
EBITDA is defined as earnings before interest, tax, depreciation and amortization from continuing operations and
before exceptional items.
4
EBITDA margin is EBITDA as a percentage of revenues
5
Return on Assets is net income as a percentage of assets
6
Return on Average Equity is net income as a percentage of the average of the equity as at year-end and equity as
at end of the immediately preceding year.
7
Current Ratio is current assets divided by current liabilities
8
Debt to Equity Ratio is interest bearing debt over total equity
9
Interest Coverage ratio is EBITDA divided by interest expense

23
 RISK FACTORS

GENERAL RISK WARNING

An investment in the Offer Shares involves a number of risks. Prospective investors should carefully consider
the risks described below, in addition to other information contained in this Prospectus, including the
Companys financial statements and notes relating thereto, before making any investment decision relating to
the Offer Shares. These factors, which have been arranged according to their level of importance, may be
summarized into those that pertain to the business and operations of the Company, those that pertain to the
overall political, economic, and business environment in the Philippines, and those that pertain to the Offer
Shares.

This section does not purport to disclose all of the risks and other significant aspects of investing in the Offer
Shares. Investors deal in a range of investments each of which may carry a different level of risk. Investors
should seek professional advice regarding any aspect of the securities such as the nature of the risks involved
in the trading of the securities. Investors should undertake independent research regarding the Company and
the trading of securities before commencing any trading activity and may request all publicly available
information regarding the Company and the Offer Shares from the SEC.

The Companys past performance is not an indication of its future performance. There is an extra risk of losing
money when securities are bought from smaller companies. There may be a big difference between the buying
price and the selling price of these securities. The occurrence of any of the events discussed below and any
additional risks and uncertainties not presently known to the Company or are currently considered immaterial
could have a material adverse effect on the Companys business, result of operations, financial condition and
prospects, and could cause the market price of the Offer Shares to fall significantly and investors may lose all
or part of their investment.

1. RISKS RELATED TO THE COMPANY

There is heightened competition among local and national players where the Company is operating and
expanding. Competition for the acquisition of land for new projects could adversely affect the
Companys business.

The Companys future growth and development are dependent, in part, on its ability to acquire or enter into
agreements to develop additional tracts of land suitable for the Companys planned real estate projects. When
the Company and its competitors attempt to locate sites for development, the Company may experience
difficulty in locating parcels of land of suitable size in locations and at prices acceptable to the Company. In the
event the Company is unable to acquire suitable land at acceptable prices, with reasonable returns, or at all, its
growth prospects could be limited and its business and results of operations could be adversely affected.

The Company faces tough competition from a number of local and national players that take advantage of the
growing real estate market in Cebu. For residential projects, CLI competes with Ayala Land, Inc., Filinvest
Land, Federal Land, Taft Properties, Primary Homes, Aboitiz Land and a host of other local and national
players. For commercial developments and office space leasing, CLI faces Ayala Land, Inc., Primary
Structures Corporation, Skyrise Realty and Development Corporation, Megaworld, Inc. and other players as its
competitors in addressing the demand for office buildings of the fast growing BPO industry and retail spaces.

Nevertheless, CLI has been able to establish itself as Cebus leading local housing developer due to its strong
track record in the four main market segments namely high-end, mid-market, economic and socialized housing.
Thus, the Company can tailor-fit its residential developments not only to achieve the best use of a property but
also to ensure its optimal market acceptance. This has enabled CLI to sell its projects at a higher velocity, turn
over quickly on its developments, and move swiftly from pre-selling to construction and delivery. CLIs
consistently high sales performance is enabled by innovative sales and marketing strategies, which allows itself
to bring products to the market faster than the competition with the commanding support of its 5,000-strong
real estate broker and agent network.

24
In order to gain further versatility, the Company has also diversified into commercial, hospitality and industrial
developments. With CLIs growing local leadership and expertise in various real estate product offerings, the
company believes it will be able to sustain its growth amidst heightened competition.

The Companys limited land bank inventory compared to other developers is deliberate. CLIs thrust is to
immediately develop a property once acquired and after completion, to quickly turn over the same to the buyers
to achieve faster financial gains and to ensure efficient use of capital.

The Company emphasizes creating shareholder value by being opportunistic with investments and being
judicious in its deployment of capital. Decisions on capital expenditures, whether financed by equity or debt,
are made with a priority on generating a strong return on investment in a measurable and realistic timeframe.
Having too large a land bank would necessarily mean that much capital is devoted to holding non-revenue
generating assets while incurring cost of debt or equity. Much in the same way that capital-efficient firms
employ a just-in-time to efficiently utilize capital, CLI chooses only to raise capital when it can confidently
forecast and execute a project with a reasonable rate of return.

Nevertheless, despite the heightened competition for land in Cebu and VisMin, the Company does not find any
substantial difficulty in acquiring target properties. The Companys local connections in VisMin and familiarity
with the people and the territories where it is operating enable CLI to attract reverse inquiries for possible JVs
with landowners or offers for sale of properties. The Company will continue to open its doors to JV
partnerships and to work on the success of its current JVs and projects in order to retain its good reputation in
the territories where it is operating.

The Companys business is affected by various regulations in the Philippines.

CLI operates a material part of its businesses in a highly regulated environment. CLIs business is subject to
numerous environmental laws and regulations relating to the protection of the environment and human health
and safety. These include laws and regulations governing air emissions, water and waste water discharges, odor
emissions, and the management and disposal of, and exposure to, hazardous materials. The Company cannot
predict what environmental or health and safety legislation or regulations will be amended or enacted in the
future; how existing or future laws or regulations will be enforced, administered or interpreted; or the amount
of future expenditures that may be required to comply with these environmental or health and safety laws or
regulations or to respond to environmental claims.

In addition, CLI is required to obtain licenses to sell before making sales or other dispositions of housing and
condominium units. For more information on the environmental laws and other regulations affecting the
Companys operations, please see discussion on Regulatory Framework on page [145].

Project permits and any license to sell may be suspended, cancelled or revoked by the HLURB or by the courts
upon its findings or upon complaint from an interested party, and there can be no assurance that the Company
will receive the requisite approvals or licenses, or that such permits, approvals or licenses will not be cancelled
or suspended. Any of the foregoing circumstances or events could affect the Companys ability to complete
projects on time, within budget or at all, and could have a material adverse effect on its financial condition and
results of operations.

CLI, through its construction and property management arms, keeps itself abreast of the latest technologies that
enable it to implement existing sanitation, environment and safety laws and regulations at cost-efficient means.
It also continuously exerts earnest efforts to secure and maintain all relevant and material permits and licenses
required under such laws and regulations for its subdivision and condominium projects. The Company also
practices and adheres to a strong compliance culture and maintains positive relationships with regulatory and
local government agencies.

The Companys current portfolio is composed of approximately 90% for-sale properties and 10%
recurring income properties.

25
For 12 years, the Company has been successful in selling its various residential and commercial for-sale
projects. Only two out of its 13 completed projects have not reached at least 90% sales performance so far.
Nevertheless, it may be affected during market downturns when end-user financing becomes less accessible.
Though the Company has been building up its recurring income assets, this still composes only roughly 10% of
its portfolio.

The Company, in anticipation of these market downturns, has positioned itself to grow its current mix of
recurring income properties in the next five years. In three to five years, the Companys target mix is composed
of 80% residential developments and 20% recurring income projects.

CLI is currently developing the 180-room Citadines Hotel and Latitude Corporate Center, a 24-storey Grade A
office building at the Cebu Business Park. By 2017, two significant mixed-use developments will be launched:
(1) 38 Park Avenue at the Cebu IT Park, a 1.17-hectare site which will feature a mixed-use urban park with a
38-storey residential tower, BPO office and retail boulevard; and (2) AS Fortuna Center, a 1-hectare site in AS
Fortuna, Mandaue City, which will house a hotel, residential, office and boutique mall. Both sites will generate
up to 60,000 sq.m. of gross leasable area.

The Company also considers as a mitigant its current diverse residential portfolio, encompassing the high, mid-
market, economic and socialized housing segments. Though the Company is expanding in all four segments, it
can easily maneuver to where the demand and market conditions provide more support.

The Company is new to regional markets including Cagayan de Oro, Davao, Dumaguete, Bacolod and
Iloilo.

Despite the Companys strong track record and successful projects in Cebu, CLI is susceptible to failures in the
implementation of its business expansion plans and strategies, especially with respect to new projects and
undertakings in other regional markets. There is no guarantee that CLIs future projects will, similar to its real
estate offerings in Cebu, be successfully completed and sold as planned. There is likewise no guarantee that the
take up for its new developments will remain robust.

That being said, the Company is confident it can successfully penetrate new markets using the project
templates that has made it the leading developer in Cebu. Particularly, CLI is rolling out its successful mid-
market condominium brand (Mivesa Garden Residences) and highly-touted economic housing brand (Casa
Mira) which have outperformed even national players in Cebu.

In November 2015, CLI embarked on its first regional expansion by launching in CDO a 3-tower residential
condominium project with 798 units called MesaVerte Residences, located in the heart of downtown CDO. As
of end-December 2016, the first two towers are already 95% sold while the third tower was launched one year
ahead of schedule due to the brisk sales accomplishment. Construction for Towers 1 and 2 are well underway.

In 2016, CLI also expanded its footprint in Davao and Dumaguete. In the first quarter of 2017, acquisitions in
Bacolod and Iloilo will be cemented. In order to successfully carry out the expansion, CLI will be setting-up
both sales and engineering teams per location. Similar to its progressive CDO set-up, having these two business
units in the Companys regional branches will enable it to both address sales performance and ensure optimal
project delivery. Support from the main headquarters in Cebu will remain seamless through CLIs project
management team approach.

The Philippine property market is cyclical.

The Company expects to derive a substantial portion of its revenue in the future from current and future
portfolio of residential and mixed-use development projects. Accordingly, the Company is dependent on the
state of the Philippine property market. The Philippine property market has in the past been cyclical and
property values have been affected by the supply of and demand for comparable properties, the rate of
economic growth in the Philippines, and political and social developments.

26
While the Company has no control over the property market, this risk is mitigated by the fact that construction
for the Companys projects are completed in a fraction of the time taken for comparable-sized projects by other
developers. Construction normally begins immediately once properties are acquired in the normal course of
business. There remains a significant backlog of housing units in the economic and socialized housing
segments in which the Company competes. There is also a growing demand for office spaces to cater to the
booming BPO business in Cebu, which is now considered one of the top outsourcing destinations in the world.
Financing facilities for buyers in the housing segment has become widely available from financial institutions.
Lastly, the Company believes that its reputation as a quality home builder and real estate developer, coupled
with value for money project developments, will help it withstand the cut-throat competition in the Philippine
property market.

Given the current geographic concentration of the Companys real estate sales, the Companys results of
operations would suffer if the residential housing and land development industry in the Companys
current markets decline.

A significant portion of the Companys residential housing and land development business is located within
Metro Cebu. As a consequence of this, any prolonged economic downturn in this market could have a material
adverse effect on the Companys business, results of operations and financial condition.

To further cushion the impact of stiff competition in Metro Cebu, the Company is expanding project
developments to other highly urbanized centers in CDO, Davao, Dumaguete, Iloilo and Bacolod. The Company
remains steadfast in its 2020 vision of becoming the leading local developer in the Visayas and Mindanao
regions.

The Company might risk being exposed to housing price bubbles brought by historically low interest
rates, expansion in overall liquidity, and extensive construction of housing units.

With the aggressiveness in the real estate sector developments in the country, a steep rise in property prices was
observed. A housing price bubble occurs when demand for property suddenly decreases when the supply on
real estate property increases. The rapid upsurge in asset prices might result into an eventual decline in prices
as markets recalibrate. In addition, housing price bubble may also happen when speculative investing, which is
ubiquitous in China, Hong Kong and Singapore, is apparent. To counter that, the demand registered in the local
sector is backed by demands from end-users rather than speculative buyers. This, in turn, diminishes the
probability of having the asset price bubbles since real estate properties are not bought as investments but for
the purpose of living.

Central banks worldwide have kept overall interest rates at historically low levels for an extended period of
time. Along with the sustained levels of domestic liquidity owing to strong and growing remittances from
OFWs, the expansion of consumer credit provided by banks, the expiry of the BSPs requirement for banks to
maintain special deposit accounts, and strong inflows of foreign investments, among other factors, the real
estate industry is expected to take advantage of the stronger purchasing power in the current economic
environment.

The Company is confident in the efforts of the BSP to control inflation and prevent the formation of asset
bubbles in real estate. In addition, the Company operates and competes in a market segment where there
remains a significant backlog of housing units for end-users comprising of middle-income individuals, couples
and families. By doing so, the Company is catering to a market segment which has a particular and real housing
need. Moreover, the Company is growing its recurring income with its commercial and office developments,
upcoming hospitality business and foray into industrial development, to mitigate the effects of a possible
housing price bubble.

Increased inflation, fluctuations in interest rates, changes in Government borrowing patterns and
Government regulations could have a material adverse effect on the Companys and its customers
ability to obtain financing.

27
Interest rates, the Governments fiscal policy and lending regulations among others, could have a material
adverse effect on the Company and on the demand for its products.

With the bank lending cap imposed by the BSP to the real estate sector, the Companys access to capital and its
cost of financing become limited. Once the single borrower limit with respect to their current or preferred bank
or banks is met, the Company may encounter difficulty in obtaining financing on the same or similar
commercial terms from other banks.

A sustainable increase in inflation in the country might push the cost of raw materials upward, which the
Company may not be able to pass on to its customers, or to its contractors by having them absorb raw material
costs.

In the event the Government substantially increases its borrowing levels in the domestic currency market, the
interest rates charged by banks and other financial institutions are likely to increase and effectively reduce the
amount of bank financing available to both prospective property purchasers and real estate developers,
including the Company. Since the Company believes that a substantial portion of its customers avail
themselves of financing, through either the developers in-house scheme or through the bank, to fund their
property purchases, higher interest is expected to be observed which would make purchases of real estate more
expensive, and consequently affects demand for the Companys residential projects.

The existence of any of the abovementioned events, or any combination thereof, or of any similar events could
have an adverse effect on the Companys business, financial condition, and results of operations.

The Government, specifically the BSP, has introduced measures to monitor the real estate sector. Its
interventions would help the market become resilient and sustainable.

The Company prudently manages its balance sheet and its gearing and leverage ratios are all within or better
than industry standards, giving CLI headway to obtain additional bank financing.

The real estate sector is capital intensive and might cause difficulty for the Company to readily raise the
necessary capital to acquire new land or complete existing projects.

The Philippines real estate sector requires a substantial amount of capital to acquire land for development,
complete existing projects, and commence construction on new developments. The Company has spent
651.35 million, 303.05 million and 575.94 million for the foregoing activities on years 2014, 2015 and
2016, respectively.

The Company has relied on internally-generated funds and external financing for its land banking expenditures
and real estate development programs. Due to the capital intensive nature of the real estate industry, it is
inevitable that developers will need external support to finance their projects. Failure to obtain the requisite
funds could delay or prevent the acquisition of land, completion of ongoing projects or commencement of new
projects, which could materially and adversely affect the Companys reputation, financial condition and results
of operations.

To mitigate this risk, the Company cultivates strong relationships with its partner banks and has always
demonstrated caution in its financial management as it strives to be efficient and effective in utilizing its
capital. The Company also enters into strategic joint venture partnerships which enable it to position its
developments in strategic and prime locations, as its joint venture partners either contribute the land or share in
the acquisition cost and the Company takes charge of the property development and project management.
Moreover, the Company ensures a high sales turnover of its real estate projects through its industry-leading
sales support teams in VisMin. With over 30 sales support personnel, this team collaborates, coordinates and
supports over 5,000-strong accredited broker/agent network. This would involve the Company employing a
value for money philosophy which creates a larger demand for its real estate developments in comparison to
competitors.

28
A portion of demand for the Companys products is from Overseas Filipinos, which exposes the
Company to risks relating to the performance of the economies of the countries where these potential
customers are located.

Sales to overseas Filipinos, including OFWs and Filipino expatriates, who comprise 39% of the Companys
buyers, generate a significant portion of the demand for the Companys housing and land development projects.
A number of factors could lead to reduced remittances from OFWs, reduced number of overseas Filipinos, or
reduced purchasing power of overseas Filipinos. These factors are:

an appreciation of the Philippine peso, which would result in decreased value of the other currencies
transmitted by overseas Filipinos;
any difficulties in the repatriation of funds;
a downturn in the economic performance of the countries and regions where a significant number of
these potential customers and supporters are located such as the United States, the Middle East, Italy,
the United Kingdom, Singapore, Hong Kong and Japan;
a change in Government regulations that currently exempt the income of OFWs from taxation in the
Philippines;
the imposition of restrictions by the Government on the deployment of OFWs to particular countries
or regions such as the Middle East; and
restrictions imposed by other countries on the entry or the continued employment of foreign workers.

Any of these events could adversely affect demand for the Companys projects from overseas Filipinos, which
could have a material adverse effect on the Companys business, financial condition and results of operations.

However, OFW remittances continue to enjoy consistent growth for the past two years. OFW remittances have
grown consistently on a year to year basis since 1989. For the period from January to December 2016, OFW
cumulative remittances reached US$26.9 billion, a growth of 5.1% year-on-year8. Thus, it is expected that the
demand for the Companys housing and land development projects from overseas Filipinos and their families
will continue to enjoy stable financing from OFW remittances.

The Company engages third party brokers and agents to sell its residential housing, residential
condominium, office condominium, and condotel projects.

The Company uses third party brokers to market and sell its various real estate offerings to potential customers.
If these brokers do not meet their requisite sales targets, the Companys business, financial condition and
results of operations could be adversely affected. Moreover, there is competition for the services of third party
brokers in the Philippines and many of the Companys competitors may attempt to recruit brokers away from
the Company. If a large number of these third party brokers were to cease selling for the Company, the
Company would be required to seek other external brokers, and there can be no assurance that the Company
could do so quickly or in sufficient numbers.

Nevertheless, CLI has maintained a very professional and harmonious working relationship with its extensive
brokerage network. All brokers and agents must secure accreditation from CLI as this allows the Company to
properly screen, monitor and onboard these third party brokers and agents. As part of its quality commitment,
CLI schedules weekly product knowledge seminars, which provide a comprehensive orientation per project.
This equips brokers and agents with the latest project data, and gives them greater confidence in the diverse
offerings of the Company. With inventory in almost all residential segments and its growing commercial
portfolio, these third party brokers are able to offer more enticing options to their potential buyers. The
Company has also pioneered various incentive programs for its brokers, which have paved the way for multiple
and repeat selling efforts from individual sellers and brokerages.

8
Bangko Sentral ng Pilipinas data

29
Cancellation of sales involving the Companys projects could adversely affect its business, financial
condition and results of operations.

As a developer and seller of residential real estate, the Companys business, financial condition and results of
operations could be adversely affected in the event a material number of subdivision and condominium unit
sales are cancelled. While the Company has historically less than 1% cancellation rate based on the provisions
for bad debts in its financial statements, there can be no assurance that it will not experience a material number
of cancellations in the future. Should it happen, it will have a material adverse effect on the Companys
business, financial condition and results of operations.

To prevent cancellations, the Company ensures value for its customers money with its competitive pricing,
quality locations, planning and design, generous amenities, timely and quality construction, well-established
customer care, and after-sales and property management support. Furthermore, to minimize the risk of
cancellations, the Company targets a prudent mix of clients, the bulk of which are OFWs and employed
professionals and employees. Additionally, the Company markets its brand across several markets in several
regions of the world and OFWs comprise 39% of its buyers. The Company aims to diversify its market further
in order to avoid excessive dependency on a particular geographic location of buyers.

The Company enjoys certain tax exemptions and incentives, the loss of which may increase the
Companys tax liability and decrease future Company profits.

The Company benefits from Philippine tax law and regulations which exempt sales of residential lot with gross
selling price of 1.9 million or less, and residential houses and lots with a gross selling price of 3.2 million or
less from the VAT of 12%. The threshold amount was adjusted by the BIR in 2012, and may be further
adjusted relative to changes in the Consumer Price Index released by the Philippine Statistics Authority. In the
event such sale will later be subject to the VAT, it is expected that the selling prices for the Companys housing
or condominium units may increase, which could adversely affect the Companys sales and results of
operations.

The Company also has accredited a number of its projects with the BOI, which has allowed such projects to
enjoy certain tax incentives. The Companys sales of low-cost subdivision lots and housing units, with unit
price between 450,000 and 3 million are currently not subject to corporate income tax. The Companys
projects that qualify for the tax holiday are described elsewhere in this Prospectus.

There is no guarantee that the Companys future development projects will be able to benefit from the income
tax holiday benefits under the BOI, or that accreditation to receive such benefit will not be delayed. The delay
or absence of this income tax holiday on any of the Companys future development projects could have an
adverse effect on the Companys results of operations.

The Company regularly obtains tax advisories from expert consultants to keep it updated on the best tax saving
practices. CLI ensures compliance with all the requirements for its tax exemptions or benefits to be able to
continue the enjoyment of such benefits.

Natural catastrophes may affect the Companys business adversely.

The Philippines has experienced a number of major natural catastrophes over the years, including typhoons,
volcanic eruptions and earthquakes. The occurrence of such natural catastrophes may materially disrupt and
adversely affect the business operations, cause damage to the Companys projects or result to work stoppages
or delay construction and project delivery.

Although there can be no assurance that it will be adequately compensated for all damages and economic losses
resulting from natural catastrophes, the Company maintains comprehensive insurance against natural
catastrophes to cover its various developments.

Titles over land owned by the Company may be contested by third parties.

30
While the Philippines has adopted a system of land registration which is intended to conclusively confirm land
ownership, and which is binding on all persons (including the Government), it is not uncommon for third
parties to claim ownership of land which has already been registered and over which a title has been issued to
another person or entity. The Company, from time to time, may be required to defend itself against third parties
who claim to be the rightful owners of land.

The Company conducts extensive title searches to determine the authenticity of titles to land offered to it before
it acquires any parcel of land. It traces back titles of prospective properties up to the last three significant
partitions or ownership transfer and then perform an exhaustive background check of the persons or parties
involved in these transactions, especially their court records. It likewise conducts its own topographical and
technical surveys of these properties to verify the accuracy of technical descriptions and the correctness of all
boundaries. Furthermore, the Company investigates the existence of any prevailing liens or tax obligations
which may adversely affect its ownership rights to properties to be acquired.

The Companys reputation will be adversely affected if its projects are not completed on time or if the
projects do not meet customers requirements.

The Companys reputation will be negatively affected if any of its projects carry construction or infrastructure
failures, design flaws, significant project delays or quality control issues. Any reputational deterioration may
consequently make it more difficult for the Company to attract new buyers to its future projects, to command a
higher selling price or to presell its housing and land development projects.

The Company has inherent strengths in engineering, project planning and execution. CLI has over 50 in-house
engineers enabling it to handle the project and construction management aspect of every project, and to
competently manage the various contractors and sub-contractors hired for each project. Due to the Companys
technical strengths, it is able to properly control the quality and timely completion of its projects. Park Centrale
Tower, the Companys first office development and winner of the Best Commercial Development in Cebu in
the 2014 Philippines Property Awards, is proof of the Companys commitment to quality developments.

On average, CLI can convert raw land to a fully-developed project in less than two to three years. The
Company has historically completed almost all of its projects on time or ahead of schedule, outperforming even
national players in this aspect.

Independent contractors may not always be available, or may not be able to meet the Companys quality
standards, or complete projects on time or within budget, and may encounter difficulties which will
result in a delay of the project.

The Company relies on various general and specialty independent contractors with both local and national
experience to provide various construction services, including land clearing and infrastructure development.
Should its independent contractors become unable to perform the contracted scope of work, or are unable to
sufficiently meet the Companys demands and project requirements, these will result to delays in the project
completion and delivery to customers.

Although the Companys personnel works closely with its independent contractors, there can be no assurance
that the services rendered by any of its independent contractors will always match the Companys quality
standards, or will comply with government requirements and regulations relevant to their contracted scope of
work.

Independent contractors may also experience financial or other difficulties such as insolvency, shortages or
price increase of construction materials, work site accidents or labor issues, any of which could delay the
completion or increase the project costs. Violations by the independent contractor of their government permits
and licenses, may also affect the progress of the projects they are engaged to work on.

Last August 31, 2016, a work site accident occurred at the Companys project in Labangon, Cebu City,
involving a welder employed by the independent contractor. While the incident was being investigated by the
Office of the Building Official, the project construction was temporarily suspended for 24 days. Although the

31
work site accident was the contractors liability, the Company voluntarily extended financial assistance to the
welders family. There is no pending or anticipated legal proceedings against the Company arising from this
incident. More importantly, the accident has not resulted in buyer cancellations and work has resumed at the
project site with completion of this condominium project still on-track as scheduled.

Any of these factors will have a negative effect on the Companys reputation and make it more difficult to
attract new customers to its new and existing development projects, and have a material adverse effect on the
Companys business, financial condition and results of operations.

To mitigate this risk, the Company takes on an active role as project managers in supervising each phase of the
construction of its projects. The Company also plans to put up its own construction arm in the future.

Construction defects and other building-related claims may be asserted against the Company, and the
Company may be subject to liability for such claims.

Philippine law provides that property developers warrant the structural integrity of condominium units,
buildings, resorts and other structures designed or built by them for a period of 15 years from the date of
completion. The Company may also be held responsible for hidden (i.e., latent or non-observable) defects in a
housing unit sold by it when such hidden defects render the unit unfit for the use for which it was intended or
when its fitness for such use is diminished to the extent that the buyer would not have acquired it or would have
paid a lower price had the buyer been aware of the hidden defect. This warranty may be enforced within six
months from the delivery of the unit to the buyer. In addition, Presidential Decree No. 1096, or the National
Building Code of the Philippines (the Building Code), governs, among others, the design and construction of
buildings, as well as certain requirements and standards that must be complied with. The Company or its
officials may be held liable for administrative fines or criminal penalties in case of any violation of the
Building Code.

There can be no assurance that the Company will not be held liable for damages, the cost of repairs, and/or the
expense of litigation surrounding possible claims or that claims will not arise out of uninsurable events, such as
landslides or earthquakes, or circumstances not covered by the Companys insurance and not subject to
effective indemnification agreements with the Companys contractors. Neither can there be any assurance that
the contractors hired by the Company will be able to either correct any such defects or indemnify the Company
for costs incurred by the Company to correct such defects. In the event a substantial number of claims arising
from structural or construction defects arise, this could have a material adverse effect on the Companys
reputation and on its business, financial condition and results of operations.

The Company has inherent strengths in engineering, project planning and execution. While the Company
outsources the construction of its projects to third party contractors, CLI actively takes charge of the technical
planning, engineering and project management of its developments. Part of its land acquisition process
involves the determination of the technical suitability of potential properties to be acquired for its projects. This
includes the determination of any technical hindrances, via technical surveys, and the determination of
applicable local government requirements, which may impair any development plans and such developments
quality. Due to the Companys technical strengths and its strict adherence to its own high development
standards and the requirements of the Building Code, it is able to properly control, and assure itself of, the
quality and timely completion of its projects.

The Company relies on its key executives and officers and the members of the Soberano Family to
manage business operations.

The Companys key executives and management have contributed to its success with their combined
knowledge, experience, business relationship and expertise in the industry. Key executives and members of
management of the Company include members of the Soberano family.

Aside from occupying key executive positions in the business, the members of the Soberano family also
occupy key executive positions in the Companys subsidiary, joint venture companies and affiliates. Jose R.
Soberano III is the president of CLI Premier Hotels Intl., Inc., a wholly owned subsidiary, as well as El Camino

32
Developers Cebu, Inc. and Yuson Excellence Soberano, Inc., which are joint venture affiliates of the Company.
He also serves as Chairman of the Board of BL CBP Ventures, Inc., and Director of Ming-Mori Development
Corporation and Magspeak, which are all joint venture affiliates of the Company. Meanwhile, Jose Franco B.
Soberano is concurrently a Director and Corporate Secretary of CLI Premier Hotels Intl., Inc., while Ma.
Rosario B. Soberano serves as Director of BL CBP Ventures, Inc., El Camino Developers Cebu, Inc., Yuson
Excellence Soberano, Inc., and CLI Premier Hotels Intl., Inc. All three key executives sit on the board of the
parent company AB Soberano Holdings Corp.

There is no assurance that these other roles will not require significant time and commitment from the members
of the Soberano Family which might reduce their time devoted to their current roles in the Companys business.
If the Company loses the services of any such individuals or is unable to fill any other vacant key executive or
management positions with qualified candidates, the business and operations of the Company may be adversely
affected.

To minimize the risk, the Company maintains a competent and dynamic team of professional executives and
managers engaged in the management of the business. Efforts to professionalize the Company over the last 12
years is evident as the Company has grown from two employees to a dynamic team of 166 executives,
managers, officers and staff instilled with the Companys brand of professional work ethics and strong
corporate values. The Company believes it maintains a positive and harmonious working relationship with its
executives, members of senior management and other key officers.

The Company is a party to a number of related party transactions.

As of the date of this Prospectus, the Company has no outstanding related party balances with any of its
shareholders. It does have outstanding related-party balances to its joint ventures, homeowners associations
and condominium corporations (HACCs), and with key management personnel. These transactions are
described under Related Party Transactions and the notes to the Companys consolidated financial statements
appearing elsewhere in this Prospectus. The Company expects that it will continue to enter into transactions
with companies directly or indirectly controlled by or associated with the CLIs majority shareholders.

These transactions may involve potential conflicts of interest between the Company and the CLI majority
shareholders in a number of other areas relating to its businesses, including:

major business combinations involving the Company and/or its affiliates;

plans to develop the respective businesses of the Company and/or its affiliates; and
business opportunities that may be attractive to the CLI majority shareholders and the Company.

The Company can provide no assurance that its related-party transactions will not have a material adverse
effect on its business or results of operations.

To mitigate this risk, the Company enters into related-party transactions at an arms-length basis. Moreover,
certain related party transactions benefit the Company. For instance, certain loans are collateralized by real
estate mortgage on real properties owned by the major stockholders at no cost to the Company. CLI has
dramatically reduced any remaining advances to related parties. Company has in fact zeroed out advances to
shareholders in 2016.

The Company may be involved in legal and other proceedings arising out of its operations from time to
time.

The Company may, in the future, be involved in disputes involving the construction and operation of its
properties such as contractual disputes with contractors, suppliers, and homeowners, or disputes involving
property damage or personal liability claims from time to time. If these disputes occur, it may result in delays
in the Companys project development schedule, incurring substantial costs, and the diversion of Company
resources and managements attention. In the course of its operations, the Company may also have
disagreements with regulatory bodies, or local government units responsible for issuing the necessary permits
or licenses for the Companys business, which may subject it to administrative proceedings and unfavorable

33
decisions or result in fines or penalties and/or delay its projects. Should any of these occur, the Companys
business, financial condition, results of operations and cash flows could be materially and adversely affected.

To mitigate the risk, the Company strives to maintain good relationship with customers, suppliers, contractors,
regulators and other parties it regularly deals with. This is evident in the fact that, at present, the Company is
not involved in any material litigation. The Company also endeavors to amicably settle legal proceedings,
resort to alternative methods of dispute resolution, and exhaust all legal remedies available.

The Company works with various joint venture partners for some of its projects, whose interest may
differ from that of the Companys.

As part of its land acquisition and development strategy, the Company has entered into joint ventures, and may
continue to do so for its future projects and undertakings.

The Company and its joint venture partners share in the project in proportion to their respective contribution,
and the Company is typically appointed as project developer and project manager having direct control and
primary supervision over the conduct, management and operations of the project.

Because the joint venture partners or landowners may have economic or business interests that differ from the
Company, the joint venture acquisitions and project developments involve additional risks. For example, joint
venture partners or landowners may fail to meet their obligations, and dispute the distribution of their joint
venture shares or the management and supervision exercised by the Company over the project. In cases where
joint venture partners contribute the land for the project, titles to the property in the name of joint venture
landowners may still be contested by third parties which will affect the right to possess and develop such land.
Any of the foregoing could have a material adverse effect on the Company's business, financial condition and
the results of its operations.

To reduce this risk, the Company conducts due diligence of its joint ventures partners, and exclusively serves
as the developer and project manager in all its joint venture undertakings.

2. RISKS RELATED TO THE PHILIPPINES

Economic Considerations

In the past, the Philippines has experienced periods of slow or negative growth, high inflation, significant
devaluation of the Philippine currency, imposition of exchange controls, debt restructuring and electricity
shortages and blackouts.

The regional Asian financial crisis in 1997 resulted in, among others, the depreciation of the Philippine peso,
higher interest rates, slower growth, and a reduction in the countrys credit ratings. Since the Asian financial
crisis, the country experienced a ballooning budget deficit, volatile exchange rates and a relatively weak
banking sector.

The Government instituted several reform measures in the fiscal and banking sectors, among others, that
strengthened the countrys economic fundamentals, resulting in improved investor confidence and increased
economic activities. Real gross domestic product (GDP) rose by 6.8% in 2016 higher than the 5.9% growth in
2015, due to manufacturing, trade, real estate, renting and other business activities.

In 2016, the Philippines posted one of the fastest GDP growths in Asia along with China (6.7%) and Vietnam
(6.2%). Among the major economic sectors, industry had the fastest growth at 7.6% percent, higher than
previous years 6.5% growth. The Philippines good economic performance is also attributed to domestic
demand, particularly in terms of investment and consumption. For 2017, the economy is expected to advance
between 6.5% to 7.5%. It was opined that possible risks to economic growth include extreme weather
disturbances such as El Nio and typhoons, possible policy shifts in the U.S., greater volatility in capital
outflows and geopolitical risks.

34
Any future economic, political or social instability in the Philippines could adversely affect the Companys
business, financial condition or results of operations.

To mitigate the abovementioned risks, CLI shall continue to adopt what it considers conservative financial and
operational controls and policies within the context of the prevailing business, economic and political
environments, taking into consideration the interests of its customers, stakeholders and creditors.

Political Considerations

The Philippines has from time to time experienced severe political and social instability, including acts of
political violence. For example, in 2001, allegations of corruption against former President Joseph Estrada
resulted in protracted televised impeachment proceedings against him. These proceedings were followed by
widespread street demonstrations and a public withdrawal of support for Estrada by the military that eventually
forced Estrada to resign. On July 27, 2003, over 270 military officers and soldiers conducted an unsuccessful
coup dtat against Estradas successor, President Gloria Macapagal-Arroyo, due to allegations of corruption.
After the May 2004 elections, President Arroyo was re-elected and persistent accusations of corruption and
electoral fraud were made against Arroyo during her second term. On February 24, 2006, another attempted
coup dtat led President Arroyo to issue Proclamation 1017, which was criticized as a virtual declaration of
martial law and portions of it were later declared unconstitutional by the Supreme Court of the Philippines. On
November 29, 2007, Senator Antonio Trillanes IV, a leader of the 2003 coup dtat who was elected to the
Senate while in jail, led an armed occupation by military officers and soldiers of a luxury hotel in the Makati
financial district and publicly called for President Arroyos ouster. Senator Trillanes and his troops later
surrendered.

On November 23, 2009, in the southern island of Mindanaos Maguindanao province, approximately 100
armed men allegedly affiliated with the Ampatuan political family murdered 58 persons, including members of
the Mangudadatu family (the Ampatuans political rivals in the province), lawyers, journalists and aides
accompanying them, and motorists whose vehicles were behind the Mangudadatus vehicles. This was the
deadliest incident of political violence and of violence directed at journalists in recent history and President
Arroyo sent hundreds of troops to and declared martial law over Maguindanao after the incident, although
martial law has subsequently been lifted. On December 12, 2011, the Philippine House of Representatives
initiated impeachment proceedings against Renato Corona, Chief Justice of the Supreme Court of the
Philippines. The impeachment complaint accused Corona of improperly issuing decisions that favored former
President Arroyo, as well as failure to disclose certain properties, in violation of rules applicable to all public
employees and officials. The trial of Chief Justice Corona began in January 2012. On May 29, 2012, the
impeachment court found Corona guilty of failing to disclose to the public his statement of assets, liabilities
and net worth and removed Corona from his position as Chief Justice of the Supreme Court of the Philippines.

Moreover, since the beginning of the term of President Rodrigo R. Duterte (Pres. Duterte), more than 7,000
people have been killed in his so-called war on drugs. These drug-related killings have been subject to
legislative inquiries. As a result of the legislative inquiries, the Senate Committees on Justice and Human Right
and on Public Order and Dangerous Drugs released a joint Committee Report No. 18 on December 7, 2017,
raising standards of accountability while expressing support for the war against illegal drugs and criminality
within boundaries of the law.

There is no guarantee that future events will not cause political instability in the Philippines. Such instability
may disrupt the country and its economy and could materially and adversely affect the business, prospects,
financial condition and results of operations of the Company.

Terrorist acts, crimes, natural disasters and outbreaks of infectious diseases or fears of such occurrences
in the Philippines

The Philippines has been subject to a number of terrorist attacks in the past several years. The Philippine Army
has been in conflict with the Abu Sayyaf organization which has been responsible for kidnapping and terrorist
activities in the Philippines, and is alleged to have ties to the Al-Qaeda terrorist network. There have also been
sporadic bombings and prominent kidnappings and slayings of foreigners in the Philippines, including the

35
hijacking of a tourist bus carrying Hong Kong tourists that resulted in the deaths of several passengers. On
September 2, 2016 an explosion rocked a night market in Davao City, leading to the death of at least 14 people
and injuries to over 60 people. As a result of the bombing, Pres. Duterte has declared a state of lawlessness in
the country indefinitely. The most recent terrorist activity occurred on December 28, 2016 where two
explosions occurred during a town fiesta in Hilongos, Leyte, leaving at least 34 people injured.

There can be no assurance that the Philippines will not be subject to further acts of terrorism and violence in the
future. Terrorist attacks have, in the past, had a material adverse effect on investment and confidence in, and the
performance of, the Philippine economy and, in turn, the Companys business. The Companys current
insurance policies do not cover terrorist attacks. Any terrorist attack or violent acts arising from, and leading to,
instability and unrest, could cause interruption to parts of the Companys businesses and materially and
adversely affect the Companys financial condition, results of operations and prospects.

The Philippines has experienced natural disasters over the years. A number of climate experts believe that
climate change is affecting the intensity and severity of these natural calamities. The potential future effects of
global climate change may include longer periods of drought in some regions and an increase in the number,
duration and intensity of tropical storms in the country. Authorities may not be prepared or equipped to respond
to such disasters.

On September 26, 2009, Typhoon Ketsana (Ondoy) resulted in 341.3 millimeters of rainfall in six hours,
causing massive flooding that submerged several areas of Metro Manila and adjacent provinces. The typhoon
caused 464 deaths and approximately 86 billion in property damage. On August 6, 2012, a monsoon hit Metro
Manila and other nearby provinces which also caused severe flooding and landslides. Other calamities in recent
years include unusually strong earthquakes and outbreaks of infectious diseases such as H1N1 influenza
(commonly known as swine flu).

In December 2011, Typhoon Washi (Sendong) caused massive flooding in the southern Philippine city of
Cagayan de Oro, claiming thousands of lives and displacing tens of thousands of residents. On December 3,
2012, Typhoon Bopha struck the southern island of Mindanao as a Category 5 typhoon, triggering widespread
flash flooding and landslides throughout the region. Typhoon Bopha killed over 1,000 people and caused an
estimated 42 billion in property damage.

In October 2013, an earthquake occurred in Central Visayas, Philippines. The magnitude of the earthquake was
recorded at Mw 7.2 at the epicenter which was located six kilometers southwest of Sagbayan town, at a depth
of 12 kilometers. The seismic event affected the whole Central Visayas region, particularly Bohol and Cebu.
According to recent official reports by the National Disaster Risk Reduction and Management Council, 198
people were reported dead, 11 were missing, and 651 were injured as a result of the earthquake, making it the
deadliest earthquake in the Philippines in 23 years. In all, more than 53,000 structures were damaged or
destroyed, including commercial buildings, malls, public edifices, hotels and churches. More recently on
February 10, 2017, a magnitude 6.7 earthquake hit Surigao City, Surigao del Norte in Northern Mindanao.
Buildings, road and bridges near the epicenter area were damaged and six people were reported dead, and over
a hundred injured.

In addition, the Central Philippines experienced a severe typhoon, Typhoon Haiyan (Yolanda), in November
2013 which caused extensive damage to infrastructure and properties, claimed 6,268 lives and displaced
thousands of residents.

It is not possible to predict the extent to which the Companys business will be affected by any future
occurrences of natural calamities such as those described above or fears that such occurrences will take place,
and there can be no assurance that any disruption to its business will not be protracted, that property will not be
damaged and that any such damage will be completely covered by insurance or at all. Any such occurrences
may disrupt the operations of the Companys business and could materially and adversely affect their business,
financial condition and results of operations. Further, any such occurrences may also destabilize the Philippine
economy and business environment, which could also materially and adversely affect the Companys financial
position and results of operations.

36
RISKS RELATING TO THE OFFER AND THE OFFER SHARES

The market price of securities can and does fluctuate. The Offer Shares have not been publicly traded
and the relative volatility and illiquidity of the securities market may substantially limit investors ability
to sell the Offer Shares at a suitable price or at a time they desire.

The market prices of securities can and do fluctuate, and it is impossible to predict whether the price of the
Offer Shares will rise or fall. An individual security may experience upward or downward movements, and
may even lose all its value. There is an inherent risk that losses may be incurred rather than profit made as a
result of buying and selling securities. There is an extra risk of losing money when securities are bought from
smaller companies. There may be a substantial difference between the buying price and the selling price of
such securities. Trading prices of the Offer Shares will be influenced by, among other things:

Variations in the Companys operating results;

Success or failure of the Companys management team in implementing business and growth
strategies;
Gain or loss of an important business relationship;
Changes in securities analysts recommendations, perceptions or estimates of the Companys financial
performance;
Changes in conditions affecting the industry, the general economic conditions or stock market
sentiments or other events or factors;
Differences between the Companys actual financial operating results and those expected by investors
and analysts;
Additions or departures of key personnel;
Changes in general market conditions and broad market fluctuations; and
Involvement in litigation.

These fluctuations may be exaggerated if the trading volume of the Companys Common Shares is low.

The securities market is substantially smaller, less liquid, and more volatile than major securities markets in the
United States and other jurisdictions, and is not as highly regulated or supervised as some of these other
markets. The Offer Price has been determined by the Company in consultation with the Joint Lead
Underwriters, and could differ significantly from the price at which the Offer Shares will trade subsequent to
the completion of the Offer. There can be no assurance that after the Offer Shares have been approved for
listing on the PSE, an active trading market for the Offer Shares will develop or be sustained after the Offer, or
that the Offer Price will correspond to the price at which the Offer Shares will trade in the Philippine public
market subsequent to the offer. There is no assurance that investors may sell the Offer Shares at prices or at
times deemed appropriate.

There can be no guarantee that the Offer Shares will be listed on the PSE.

Subscribers of the Offer Shares are required to pay for their purchase upon submission of their Applications
during the Offer Period. Assuming approval by the PSE of the Companys application to list the Offer Shares,
the Listing Date will be scheduled after the Offer Period. The Company has taken steps to ensure that it fully
complies with the registration and listing requirements and regulations in order to ensure that the Offer Shares
will be listed on the PSE. However, there can be no guarantee that listing will occur on the anticipated Listing
Date or at all. Delays in admission and commencement of trading in shares on the PSE have occurred in the
past. If the PSE does not admit the Offer Shares onto the PSE, the market for the Offer Shares will not be liquid
and investors may not be able to trade the Offer Shares. However, they would be able to sell their Shares by
negotiated sale. This may materially and adversely affect the value of the Offer Shares.

There may be no liquidity in the market for the Offer Shares and the price of the Offer Shares may fall.

37
The Offer Shares will be listed in the PSE where trading volumes have been historically and significantly
smaller and highly volatile compared to major securities markets in more developed countries. There can be no
assurance that an active market for the Offer Shares will develop following the Offer or, if developed, that such
market will be sustained.

The Offer Price will be determined after taking into consideration a number of factors including, but not limited
to, the Companys prospects, the market prices for shares of comparable companies and prevailing market
conditions. The price at which the Offer Shares will trade on the PSE at any point after the Offer may vary
significantly from the Offer Price.

Foreign ownership limitations may affect the liquidity of the market for the Offer Shares.

The Constitution and other related statutes restrict the exploration, development, and utilization of natural
resources, as well as, ownership of private lands to Philippine Nationals. The term Philippine National as
defined under the Foreign Investments Act (Republic Act No. 7042, as amended) means a citizen of the
Philippines, or a domestic partnership or association wholly-owned by citizens of the Philippines, or a
corporation organized under the laws of the Philippines of which at least 60% of the capital stock outstanding
and entitled to vote is owned and held by citizens of the Philippines, or a corporation organized abroad and
registered to do business in the Philippines under the Corporation Code, of which 100% of the capital stock
outstanding and entitled to vote is wholly-owned by Filipinos or a trustee of funds for pension or other
employee retirement or separation benefits, where the trustee is a Philippine National and at least 60% of the
fund will accrue to the benefit of Philippine Nationals.

Pursuant to Philippine SEC Memorandum Circular No. 8, Series of 2013, which generally applies to all
corporations engaged in identified areas of activities or enterprises specifically reserved, wholly or partly, to
Philippine nationals by the Philippine Constitution, the Foreign Investments Act of 1991 and other existing
laws, amendments thereto, and implementing rules and regulations of the said laws, for purposes of
determining compliance with the constitutional or statutory ownership requirement, the required percentage of
Filipino ownership shall be applied to both: (i) the total number of outstanding shares of stock entitled to vote
in the election of directors; and (ii) the total number of outstanding shares of stock, whether or not entitled to
vote in the election of directors.

Foreign equity participation in entities such as the Company, which owns and continues to acquire private
lands, is limited to a maximum of 40%. Therefore, to the extent that foreign investors ability to buy the Offer
Shares is limited, these restrictions may affect the liquidity of the Offer Shares.

Future sales of Common Shares in the public market could adversely affect the prevailing market price
of the Common Shares and shareholders may experience dilution in their holdings.

In order to finance the expansion of the Companys business and operations, the Companys board of directors
will consider all funding options available to the Company at the time, which may include the issuance of new
Common Shares. If additional funds are raised through the issuance of new equity or equity-linked securities
other than on a pro rata basis to existing shareholders, the percentage ownership of the shareholders may be
reduced, shareholders may experience subsequent dilution and/or such securities may have rights, preferences
and privileges senior to those of the Common Shares.

Further, the market price of the Common Shares could decline as a result of future sales of substantial amounts
of the Common Shares in the public market or the issuance of new Common Shares, or the perception that such
sales, transfers or issuances may occur. This could also materially and adversely affect the prevailing market
price of the Common Shares or the Companys ability to raise capital in the future at a time and at a price the
Company deems appropriate.

Investors in the Offer Shares will face immediate and substantial dilution in the net asset value per Offer
Share and may experience future dilution.

38
The Offer Price is substantially higher than the net book value per share of P1.198 per share as at December 31,
2016. Thus, there will be an immediate and substantial dilution in the net asset value per share to new investors.
See Dilution on page [51] of this Prospectus.

39
 USE OF PROCEEDS

Assuming a maximum Offer Price of P[6.56] per Primary Offer Share and the stabilization option being
exercised in full, the Company expects to raise from the Primary Offer gross proceeds of approximately
P[2,820,800,000]. After deducting fees, taxes and other expenses related to the Offer and payable by the
Company as set out below, the net proceeds of the Primary Offer will be approximately P[2,660,000,000]. The
Company will not receive any proceeds from the Secondary Offer.

The costs and expenses to be incurred by the Company for the Offer will be approximately
P[160.8] million, consisting of:

Primary Secondary Total

(in P) (in P) (in P)
Gross Proceeds [2,820,800,000] [984,000,000] [3,804,800,000]
Estimated Offer expenses:

PSE listing and processing fees [9,377,781.63] [3,271,319.17] [12,649,100.80]

SEC registration and listing fees [1,347,602.95] [470,094.05] [1,817,697.00]

Underwriting and selling commission fees [75,827,956.99] [26,451,612.90] [102,279,569.89]

Estimated professional and accounting fees [7,413,793.10] [2,586,206.90] [10,000,000.00]

Estimated fee of Stock Transfer Agent and
Receiving Agent [1,482,758.62] [517,241.38] [2,000,000.00]

Estimated costs of printing and marketing [3,706,896.55] [1,293,103.45] [5,000,000.00]

Documentary stamp tax [2,150,000.00] [562,500.00] [2,712,500.00]

IPO Tax [56,416,000.00] [39,360,000.00] [95,776,000.00]

Miscellaneous expenses [3,077,210.16] [1,073,445.40] [4,150,655.56]

Total Offer Expenses [160,800,000.00] [75,585,523.26] [236,385,523.26]

Estimated Net Proceeds [2,660,000,000.00] [908,414,476.74] [3,568,414,476.74]

The net proceeds from the sale of the Primary Offer Shares are intended to be used in the following order of
priority, estimated amounts and estimated disbursement schedule:

Use of Proceeds Estimated Amount Estimated Timing of

(in ) Disbursement
Capital Expenditures Land Acquisitions, Development [2,200,000,000] 2017-2018
Costs and Investment in Joint Ventures and Associates
Debt Repayment [400,000,000] 2017-2018
Working Capital [60,000,000] 2017-2018
Total [2,660,000,000]

40
Use of Proceeds from the Primary Offer

The Company will use the proceeds of the Offer to partially finance key land acquisitions and development
costs for new projects, investments in joint ventures and associates, debt repayment and general corporate
purposes. To fully finance the Companys land acquisitions and development costs for its VisMin expansion
and Cebu projects enumerated below, CLI will use internally generated funds and bank financing. To
completely pay off the debts enumerated below, the Company will use internally generated funds.

Capital expenditures

Land acquisitions and development costs VisMin

The Company aims to further expand its footprint in the VisMin regions. The proceeds will be used to acquire
strategic sites and partially fund development costs in CDO, Davao City, Bacolod, Iloilo and Dumaguete. The
Company will primarily roll out its successful mid-market residential format (the Garden-series) and economic
housing brand (Casa Mira). It will also seek opportunities for mixed-use developments in these key regional
hubs.

CLI intends to use approximately P1.05 billion to acquire various properties and partially fund development
costs of the following VisMin projects:

Land Acquisition Intended Use Estimated Allocation Estimated Status

& Development (in ) Timing of
VisMin Disbursement
Davao City Residential [120,000,000] 2H 2017 Completed negotiation
but no payments made
Davao City Mixed-Use [300,000,000] 1H 2018 Completed negotiation
but no payments made
Bacolod City Mixed-Use [150,000,000] 2H 2017 Completed negotiation
but no payments made
Bacolod City Residential [120,000,000] 2H 2017 Under negotiation
Jaro, Iloilo Residential [60,000,000] 2H 2017 Under negotiation
Dumaguete City Residential [50,000,000] 2H 2017 Completed negotiation
with downpayment
Cagayan de Oro Residential [150,000,000] 2H 2017 Completed negotiation
with downpayment
Bohol Residential [100,000,000] 1H 2018 Ongoing site evaluation
Total [1,050,000,000]

As of the date of this Prospectus, the development of these projects has not yet commenced.

Land acquisition and development costs Cebu

In Cebu, the Company will use the proceeds to further cement its hold as Cebus leading local home developer
while also gaining increased market share in the office, retail and hospitality segments. CLI intends to use
approximately P[910] million to acquire various properties and partially fund development costs of the
following Cebu projects:

Land Acquisition & Intended Use Estimated Estimated Status

Development - Cebu Allocation Timing of
(in ) Disbursement
Guadalupe, Cebu Residential [180,000,000] 2H 2017 Completed negotiation
with downpayment
Mactan, Cebu Hotel/Residential [400,000,000] 2H 2017 Ongoing site evaluation
Bogo City, Cebu Residential [30,000,000] 2H 2017 Under negotiation
Minglanilla/Talisay [300,000,000] 1H 2018 Ongoing site evaluation
Total [910,000,000]

41
As of the date of this Prospectus, the development of these projects has not yet commenced.

Investment in joint ventures and associates

The Company will invest approximately P240 million in additional capital investments in its joint ventures and
associates. The final breakdown of the amount to be invested in each entity will be determined at a future date
depending on the specific needs that may arise for the projects developed under each entity.

Investment in Joint Ventures and Intended Use Estimated Estimated Timing of

Associates Allocation Disbursement
(in )
Capital Investments in JV and Additional Investment 240,000,000 2H 2017 1H 2018
Associates
Total 240,000,000

For a detailed discussion on these joint ventures and associates and their respective objectives, see discussion
under Business Overview Joint Ventures / Associates.

Debt Repayment

The Company intends to use P400 million of the net proceeds to partially repay its short-term loans with
Philippine National Bank (PNB), China Bank Corporation (China Bank) and Metropolitan Bank and
Trust Company (Metrobank), as follows:

Debt Repayment Interest Maturity Estimated Estimated Timing of

Rate Allocation Disbursement
(in )
PNB 3.00% July 2017 200,000,000 2H 2017
China Bank 3.50% July 2017 50,000,000 2H 2017
Metrobank 3.25% July 2017 150,000,000 2H 2017
Total 400,000,000

The P200 million revolving credit line from PNB that CLI incurred in July 2016 was used to augment working
capital and to finance the development of Mivesa Garden Residences (Phase 1 and 2). CLIs loan line of P50
million from China Bank, available by way of short term promissory notes with interest, was incurred in July
2016 to finance additional working capital and operational cash requirements.

General and Working Capital

The balance of the proceeds shall be used by the Company for general corporate purposes, including but not
limited to working capital purposes.

All the foregoing discussion represents a best estimate of the use of proceeds of the Offer based on the
Companys current plans and anticipated expenditures, and the actual amount and timing of disbursement of
the net proceeds from the Primary Offer will depend on various factors which include, among other factors,
changing market conditions or new information regarding the cost or feasibility of the Companys expansion
plans and projects. Actual allocation of net proceeds by the Company may vary from the foregoing discussion
as the Companys management may find it necessary or advisable to reallocate the net proceeds within the
categories described above or to use such net proceeds for other corporate purposes. Likewise, it is possible
that the timeline for the implementation of the projects or otherwise the use of the proceeds as discussed above
may be delayed. In the event that there is any change in the Companys development plan, including force
majeure and circumstances, such as (i) failure to obtain requisite approvals (ii) changes in government policies
that would render any of the above plans not commercially viable, and (iii) changes in economic or market
conditions, the Company will carefully evaluate the situation and may reallocate the proceeds for future
investments and/or hold such funds on short term deposit or other alternatives, whichever is better for the
Companys and its shareholders collective interest. In such event, the Company will issue a public disclosure

42
if there is any change in the above proposed use of proceeds and shall accordingly inform the SEC, the PSE
and its shareholders at least 30 days prior to its implementation.

In the event that the actual expenses are more than the estimates, or the actual net proceeds are less than
projected, the Company will utilize said net proceeds based on their order of priority and will use internally-
generated funds and bank loans to finance the shortfall, or delay or abandon one or more of the components of
its plans. In such an event, the Company shall inform the SEC, the PSE and its shareholders at least 30 days
prior to its implementation.

In the event of any significant deviation, material adjustment or reallocation in the planned use of proceeds, the
Company will secure the approval of its Board of Directors for such deviation, adjustment or reallocation and
promptly make the appropriate disclosures to the SEC and the PSE. The Company shall regularly disclose to
the PSE, through the PSE Electronic Disclosure Generation Technology (PSE EDGE), any disbursements
from the proceeds generated from the Offer. In addition, the Company shall likewise submit via the PSE EDGE
the following disclosure to ensure transparency in the use of proceeds:

1. Any disbursements made in connection with the planned use of proceeds from the Offer;
2. Quarterly Progress Report on the application of the proceeds from the Offer on or before the first
fifteen (15) days of the following quarter. The quarterly progress report should be certified by the
Companys Chief Financial Officer or Treasurer and external auditor;
3. Annual Summary of the application of proceeds on or before January 31 of the year following the
initial public offering. The annual summary report should be certified by the Companys Chief
Financial Officer or Treasurer and external auditor; and
4. Approval by the Companys Board of Directors of any reallocation on the planned use of proceeds, or
of any change in the work program. The actual disbursement or implementation of such reallocation
will be disclosed by the Company at least thirty (30) days prior to the said actual disbursement or
implementation.

The quarterly and annual reports of the Company as required in items 2 and 3 above must include a detailed
explanation for any material variances between the actual disbursements and the planned use of proceeds
section. Such detailed explanation will state the approval of the Board of Directors as required in item 4 above.

Except as otherwise disclosed in this Prospectus, none of the proceeds from the Primary Offer will be used to
reimburse any officer, director, employee or shareholder of the Company for services, assets or money
previously rendered, transferred, advanced or otherwise.

43
 DESCRIPTION OF THE SHARES

SHARE CAPITAL INFORMATION

The Company has an authorized capital stock of P2,500,000,000 consisting of 2,400,000,000 Common Shares
with a par value of P1.00 per Common Share and 1,000,000,000 Preferred Shares with a par value of P0.10 per
Preferred Share.

This is pursuant to the Companys increase in authorized capital stock and change in par value from
P1,000,000,000 divided into 9,000,000 Common Shares and 1,000,000 Preferred Shares with a par value of
P100.00 per share, to P2,500,000,000 consisting of 2,400,000,000 Common Shares with a par value of P1.00
per Common Share and 1,000,000,000 Preferred Shares with a par value of P0.10 per Preferred Share,
approved by the SEC on October 24, 2016. Out of such increase in authorized capital, P400,000,000 has been
subscribed by AB Soberano.

The subscribed and paid-up capital stock of the Company consisting of 1,284,000,000 Common Shares are
fully paid. As of the date of this Prospectus, there are no outstanding Preferred Shares.

The Common and Preferred Shares are not traded in any market nor are they subject to outstanding options or
warrants to purchase, or securities convertible into shares of the Company. Prior to the Offer, there has been no
public trading market for any of the Companys Common or Preferred Shares.

OBJECTIVE AND PURPOSE

The Companys primary purpose is to acquire by purchase, exchange, assignment, gift or otherwise, and to
manage and hold, sell, assign, transfer, exchange, lease, let, develop, mortgage, pledge, traffic, deal in and with
and otherwise operate, enjoy and dispose of, all real properties of every kind and description and wherever
situated, and to the extent permitted by law, real estate whether improved or unimproved and any interest or
rights therein, as well as buildings, tenements, factories, edifices and structures, and other improvements.

RIGHTS RELATING TO THE OFFER SHARES

Voting Rights

Each Common Share entitles the holder to one vote at all shareholders meetings for each Common Share
standing in his name on the books of the Company at the time or closing thereof for the purpose of the meeting.
In determining the shareholders who are entitled to vote at any meeting of the stockholders, the Board may
provide that the stock and transfer book be closed for a stated period not exceeding 20 days.

The directors are elected by the shareholders at the annual shareholders meeting. Cumulative voting is allowed
whereby a shareholder may cumulate his votes by giving one candidate as many votes as the number of
directors to be elected multiplied by the number of his shares. Voting rights cannot be exercised with respect to
shares declared delinquent, treasury shares, or if the shareholder has elected to exercise his appraisal rights.

Fundamental Matters Requiring Stockholder Approval

Corporate power and competence is lodged primarily with the Board of Directors. However, the Corporation
Code considers certain matters as significant corporate acts that may be implemented only with the approval of
shareholders, including those holding shares denominated as non-voting in the Articles of Incorporation. These
acts, which require Board approval and the approval of shareholders representing at least two-thirds (2/3) of the
issued and outstanding capital stock of the company in a meeting duly called for the purpose (except for the
amendment of the By-Laws and the approval of management contracts in general, which require approval of
shareholders representing a majority of the companys outstanding capital stock), include:

Amendment of the Articles of Incorporation;

44
 Extension or shortening of corporate term;

Increase or decrease of capital stock and incurring, creating or increasing bonded indebtedness;

Delegation to the Board the power to amend or repeal or to adopt new By-Laws;

Sale, lease, exchange, mortgage, pledge or other disposition of all or a substantial part of the
Companys assets;

Merger or consolidation of the Company with another corporation or corporations;

Investment of corporate funds in any other corporation or for a purpose other than the primary purpose
for which the Company was organized;

Dissolving the Company;

Declaration or issuance of stock dividends;

Ratification of a contract between the Company and a director or officer where the vote of such
director or officer was necessary for approval;

Entering into a management contract where (a) a majority of directors of the managing corporation
constitutes the majority of the board of the managed company or (b) stockholders of both the
managing and managed corporations represent the same interest and own or control more than one-
third of the outstanding capital stock entitled to vote;

Removal of directors;

Ratification of an act of disloyalty by a director; and

Ratification of contracts with corporations in which a director is also a member of the board, where
the interest of the directors is substantial in one corporation and nominal in the other.

Pre-emptive Rights

The Corporation Code confers pre-emptive rights on shareholders of a Philippine corporation, which give the
shareholders the right to subscribe to all issues or other disposition of shares of any class by the corporation in
proportion to their respective shareholdings, subject to certain exceptions. A Philippine corporation may
provide for the denial of the pre-emptive rights in its Articles of Incorporation. The Articles of Incorporation of
the Company denies shareholders the pre-emptive right to subscribe to all issues or dispositions of shares of the
present capital or on future/subsequent classes of shares and increases in the capital of the Company.

Derivative Suits

Philippine law recognizes the right of a shareholder to institute, under certain circumstances, proceedings on
behalf of the corporation in a derivative action in circumstances where the corporation itself is unable or
unwilling to institute the necessary proceedings to redress wrongs committed against the corporation or to
vindicate corporate rights, as for example, where the directors themselves are the malefactors.

Appraisal Rights

The Corporation Code grants a shareholder a right of appraisal in certain circumstances where such shareholder
has dissented and voted against a proposed corporate action, including:

45
 An amendment of the Articles of Incorporation which has the effect of adversely affecting the rights
attached to such shareholders shares or of authorizing preferences in any respect superior to those of
outstanding shares of any class or of extending or shortening the term of corporate existence of the
corporation;

The sale, lease, exchange, transfer, mortgage, pledge or other disposal of all or substantially all the
assets of the corporation;

The investment of corporate funds in another corporation or business or for any purpose other than the
primary purpose for which the corporation was organized; and

A merger or consolidation.

In these circumstances, the dissenting shareholder may require the corporation to purchase his shares at a fair
value which, in default, is determined by three disinterested persons, one of whom shall be named by the
stockholder, one by the corporation, and the third by the two thus chosen. In the event of a dispute, the SEC
will resolve any question relating to a dissenting shareholders entitlement to exercise the appraisal rights. The
dissenting shareholder will be paid if the corporate action in question is implemented and the corporation has
unrestricted retained earnings sufficient to support the purchase of the shares of the dissenting shareholders.

Right to Dividends

Dividends will be declared only from the unrestricted retained earnings and will be payable at such time, in
such manner and in such amounts as the Board will determine. Dividends will be paid in proportion to the
outstanding stock held by the stockholders, and in accordance with law and applicable rules and regulations.

In determining the shareholders who are entitled to receive payment of any dividend, the Board may provide
that the stock and transfer book be closed for a stated period not exceeding 20 days.

Please see discussion in section on Dividends and Dividends Policy on page [48] of this Prospectus.

Right of Inspection and Disclosure Requirements

Philippine stock corporations are required to file an annual general information sheet, which sets forth data on
their management and capital structure, and copies of their annual financial statements with the SEC.
Corporations must also submit their annual financial statements to the BIR. Corporations whose shares are
listed on the PSE are also required to file current, quarterly and annual reports with the SEC and the PSE.
Shareholders are entitled to require copies of the most recent financial statements of the corporation, which
include a statement of financial position as of the end of the most recent tax year and a statement of income for
that year. Shareholders are also entitled to inspect and examine the books and records which the corporation is
required by law to maintain.

Change in Control

The Companys Articles of Incorporation provides that no transfer of stock or interest, which will reduce the
ownership of Filipino citizens to less than the required percentage of the outstanding capital stock, shall be
allowed or permitted to be recorded in the stock and transfer book.

The Philippine Constitution and related statutes set forth restrictions on foreign ownership of companies
engaged in certain activities. For more information relating to restrictions on the ownership of the Offer Shares,
see the discussion under Risk Factors on foreign ownership limitations on page [38] of this Prospectus and
Restriction on Foreign Ownership on page [18] of this Prospectus.

46
RIGHTS RELATING TO THE PREFERRED SHARES

The Preferred Shares have full voting rights, with each holder entitled to one vote at all shareholders meetings
for each Preferred Share standing in his name on the books of the Company.

The Preferred Shares are also entitled to non-cumulative cash dividend based on the rate of its par value.

The Corporation Code provides that except as otherwise provided in the Articles of Incorporation and stated in
the stock certificate, each share shall be equal in all respects to every other share.

MEETINGS OF THE SHAREHOLDERS

Annual Meeting of Shareholders

The annual meeting of the shareholders of the Company for the election of directors and the transaction of
business is held every first Friday of July each year, unless such day falls on a holiday, in which case the
meeting will be held on the next business day.

Special Meetings of Shareholders

Special meetings of the stockholders may be called by any of the following: (a) by resolution of the Board at its
own instance, or at the written request of stockholders representing a majority of the capital stock, or (b) by
order of the President.

Notice of Meetings

Notice of annual and special meetings of shareholders may be sent by personal delivery, by mail, telegraph,
cable, facsimile, electronic mail or other electronic means to each stockholder of record entitled to vote at such
meeting at the address and/or facsimile, telegraph number or electronic mail address last known to the
Secretary or Assistant Secretary of the Corporation, at least 15 days before the date of the meeting. The notice
shall state the date, time and place of the meeting and the agenda or purpose/s of the meeting. Notice of any
meetings may be waived, expressly or impliedly, by any stockholder.

Place of Meetings

All meetings of the stockholder shall be held at the principal office of the Company, unless written notice of
such meetings should fix another place within the same municipality or city where the said principal office is
located.

Proxy

Stockholders, when entitled, may vote at all their meetings either in person or by proxy duly given in writing
and presented to the Secretary or Assistant Secretary at least five business days before the meeting. A proxy
need not be a stockholder and, unless otherwise provided in the proxy, it shall be valid only for the meeting at
which it has been presented.

Quorum

No stockholders meeting shall be competent to decide any matter or transact any business, unless stockholders
owning at least a majority of the outstanding capital stock is present or represented thereat, except where
otherwise provided by law.

Voting during Shareholders Meeting

Voting upon all questions at all meetings of the stockholders shall be by number of shares held and not per
capita. All elections and questions, except in cases specified by law or the Companys Articles of

47
Incorporation, shall be decided by the majority vote of the stockholders present in person or by proxy, a
quorum being present. Unless required by law or demanded by a stockholder present in person or by proxy at
any meeting, the vote on any question need not be by ballot. On a vote by ballot, each ballot shall be signed by
the stockholder voting, or in his name by his proxy if there be such proxy, and shall state the number of shares
voted by them.

Mandatory Tender Offers

The rules on mandatory tender offers are provided in the Securities Regulation Code and the SRC Rules. Under
the SRC Rules:

Any person or group of persons acting in concert, who intends to acquire 15% of equity securities in a
public company in one or more transactions within a period of 12 months, shall file a declaration to
that effect with the SEC.

Any person or group of persons acting in concert, who intends to acquire 35% of the outstanding
voting shares or such outstanding voting shares that are sufficient to gain control of the board in a
public company in one or more transactions within a period of 12 months, shall disclose such intention
and contemporaneously make a tender offer for the percentage sought to all holders of such securities
within the said period.

Any person or group of persons acting in concert, who intends to acquire 35% of the outstanding
voting shares or such outstanding voting shares that are sufficient to gain control of the board in a
public company through the Exchange trading system shall not be required to make a tender offer
even if such person or group of persons acting in concert acquire the remainder through a block sale if,
after acquisition through the Exchange trading system, they fail to acquire their target of 35% or such
outstanding voting shares that is sufficient to gain control of the board.

Any person or group of persons acting in concert, who intends to acquire 35% of the outstanding
voting shares or such outstanding voting shares that are sufficient to gain control of the board in a
public company directly from one or more stockholders shall be required to make a tender offer for all
the outstanding voting shares. The sale of shares pursuant to the private transaction or block sale shall
not be completed prior to the closing and completion of the tender offer.

If any acquisition that would result in ownership of over 50% of the total outstanding equity securities
of a public company, the acquirer shall be required to make a tender offer under the SRC Rules for all
the outstanding equity securities to all remaining stockholders of said company at a price supported by
a fairness opinion provided by an independent financial advisor or equivalent third party. The acquirer
in such a tender offer shall be required to accept all securities tendered.

RECENT SALE OF UNREGISTERED SECURITIES

On July 1, 2016, the Board of Directors and the stockholders of CLI approved the increase in the authorized
capital stock of the Company from P1,000,000,000.00 to P2,500,000,000.00. Out of such increase in authorized
capital stock, AB Soberano was the sole subscriber, purchasing P400,000,000.00 worth of newly-issued
Common Shares at a price equal to its par value of P1.00 per share. The application for increase in authorized
capital stock was approved by the SEC on October 24, 2016.

In 2014, the Company declared a total of 2,000,000 Common Shares as stock dividends to all stockholders of
record as of November 30, 2014. Subsequently, in 2015, the Company declared a total of 3,000,000 Common
Shares as stock dividends to all stockholders of record as of December 15, 2015.

48
No underwriting discounts or commissions were incurred or paid for the foregoing issuances of shares. No
request for confirmation of exemption was filed by the Company for the sale of securities relying upon
exemptions under Sec. 10.1(d) and (i) of the SRC.

49
 DIVIDENDS AND DIVIDENDS POLICY

LIMITATIONS AND REQUIREMENTS

Under Philippine law, a corporation can only declare dividends to the extent that it has unrestricted retained
earnings. Unrestricted retained earnings represent the amount of accumulated profits and gains realized out of
the normal and continuous operations of the company after deducting therefrom distributions to stockholders
and transfers to capital stock or other accounts, and which is: (i) not appropriated by its Board for corporate
expansion projects or programs: (ii) not covered by a restriction for dividend declaration under a loan
agreement; and (iii) not required to be retained under special circumstances obtaining in the corporation such as
when there is a need for a special reserve for probable contingencies.

A corporation may pay dividends in cash, by the distribution of property, or by the issuance of shares. Board
approval suffices for the declaration of cash and property dividends. However, stock dividends may be paid and
distributed only upon the approval of the shareholders representing not less than 2/3 of the outstanding capital
stock at a regular or special meeting called for that purpose. The payment of stock dividends is subject to the
approval of the SEC and PSE.

Holders of Preferred Shares are entitled to non-cumulative cash dividend based on the rate of its par value.

RECORD DATE AND PAYMENT DATE

Under relevant regulations, cash dividends declared by the Company shall have a record date not less than 10
nor more than 30 days from the date of declaration. For stock dividends, the record date shall not be less than
10 nor more than 30 days from the date of the shareholders approval, provided however, that in the case of a
listed company, the set record date shall not be less than 10 trading days from receipt by the PSE of the notice
of declaration of stock dividend. In the event that a stock dividend is declared in connection with an increase in
authorized capital stock, the corresponding record date is to be fixed by the SEC.

Under the By-Laws of the Company, the Board may provide that the stock and transfer book be closed for a
stated period not exceeding 20 days.

For corporations the shares of which have been lodged with the PCD, all stock dividends and all cash dividends
declared by the company shall be remitted to PCD for immediate distribution to its Participants no later than 18
trading days from record date (the Payment Date) provided, that in case of stock dividends, the credit of the
stock dividend shall be on the Payment Date which in no case shall be later than the stock dividends listing
date.

DIVIDEND POLICY

Dividends payable by the Company on its shares of stocks are payable in cash or additional shares of stock.
The payment of dividends in the future will depend upon the earnings, cash flow and financial condition of the
Company and other factors. Special cash dividends are declared depending on the availability of cash, taking
into account the Companys capital expenditures and project requirements.

DIVIDENDS DECLARED

The Company has declared the following cash and stock dividends.

Cash Dividends

Year of Dividend Rate of Dividend Record Date Amount Paid

Declaration Declared per Share (in (in P)
P)
2014 12.50 November 3, 2014 48,000,000.00
2015 7.19 February 28, 2015 42,000,000.00

50
 2015 10.27 June 15, 2015 60,000,000.00
2015 8.56 October 15, 2015 50,000,000.00
2015 5.66 December 15, 2015 50,000,000.00
2016 2.26 March 31, 2016 20,000,000.00
2016 5.99 August 31, 2016 52,943,457.30
2016 4.32 September 15, 2016 38,150,000.00
2016 1.70 September 30, 2016 15,000,000.00
2016 0.74 November 21, 2016 650,000,000.00
2016 0.05 December 1, 2016 40,000,000.00
2016 0.03 December 1, 2016 40,000,000.00

Stock Dividends

Year Rate of Dividend Record Date No. of Shares

Declared per Share
(in P)
2014 0.5208 November 30, 2014 2,000,000
2015 0.3394 December 15, 2015 3,000,000

No dividends have been declared by the Companys newly incorporated subsidiary, CLI Premier Hotels Intl.,
Inc., to date.

51
 DETERMINATION OF OFFER PRICE

The Offer Price has been set at up to P[6.56] per Offer Share. The Offer Price will be determined and finally set
through a book-building process and discussions between the Company, Selling Shareholders and the Joint
Lead Underwriters. Since the Company and the Offer Shares have not been listed on any stock exchange, there
is no market information for the Offer Shares and there has been no market price for the Offer Shares derived
from day-to-day trading.

The factors considered in determining the Offer Price are, among others, the Companys ability to generate
earnings and cash flow, its short and long-term prospects, the level of demand from institutional investors,
overall market conditions at the time of the launch and the market price of listed comparable companies. The
Offer Price may not have any correlation to the actual book value as of 31 December 2016 of the Offer Shares.

52
 DILUTION

The Offer Shares will be sold at the Offer Price, which will be substantially higher than the net tangible book
value per share of the outstanding Common Shares and will result in an immediate material dilution of the new
investors equity interest in the Company.

As of [December 31, 2016], the net tangible book value of the Company is at P[1.538] billion or P[1.198] per
share. Net tangible book value represents the amount of the Companys total tangible assets less its total
liabilities. The Companys net tangible book value per share represents its net tangible book value divided by
the number of Common Shares outstanding.

After giving effect to the increase in the Companys net tangible book value to reflect its receipt of the net
proceeds of the Primary Offer due to the Company estimated at up to P[2.660] billion and the addition of a total
of up to 430,000,000 million new Common Shares subject of the Offer, the Companys pro-forma net tangible
book value would approximately be up to P[2.449] per share.

This represents an immediate increase of up to P[1.251] per Common Share to existing shareholders and
dilution of up to P[4.111] per share to Offer investors. This dilution in net tangible book value per share
represents the estimated difference between the Offer Price and the approximate pro-forma net tangible book
value per share immediately following the receipt of the net Offer proceeds by the Company.

The following table illustrates dilution on a per Common Share basis, based on the Offer Price per Offer Share:

Offer Price Per Offer Share [P6.56]

Net tangible book value per share as of December 31, 2016 [P1.198]
Increase in book value per share attributable to the Offer [P1.251]
Pro-forma book value per share after the Offer [P 2.449]
Dilution per Common Share to Investors in the Offer [P4.111]

The following table sets forth the shareholdings, and percentage of Common Shares outstanding, of existing
and new shareholders of the Company immediately after completion of the Offer assuming full exercise of the
Over-allotment Option:

Number of Shares %
Existing shareholders [1,134,000,000] [66.16]
New investors [580,000,000] [33.84]
Total [1,714,000,000] [100.00]

The following table sets forth the shareholdings, and percentage of Common Shares outstanding, of existing
and new shareholders of the Company immediately after completion of the Offer assuming the Over-allotment
Option is not exercised:

Number of Shares %
Existing shareholders [1,209,000,000] [70.54]
New investors [505,000,000] [29.46]
Total [1,714,000,000] [100.00]

See also Risk Factors Risks Relating to the Offer and the Offer Shares - Future sales of Common Shares in
the public market could adversely affect the prevailing market price of the Common Shares and shareholders
may experience dilution in their holdings and Investors in the Offer Shares will face immediate and
substantial dilution in the net asset value per Offer Share and may experience future dilution on page [38] of
this Prospectus.

53
 PRINCIPAL AND SELLING SHAREHOLDERS

SHAREHOLDERS

As of the date of this Prospectus, the shareholdings in the Company are as follows:

Immediately Preceding the Offer

Common Preferred Total Voting Shares

Shareholders % %
Shares Shares (Common Shares)
AB Soberano Holdings Corp. 985,823,197 76.78 0 985,823,197 76.78
Jose R. Soberano III 134,125,000 10.45 0 134,125,000 10.45
Ma. Rosario B. Soberano 134,125,000 10.45 0 134,125,000 10.45
Jose P. Soberano, Jr. 7,481,700 0.58 0 7,481,700 0.58
Jose Franco B. Soberano 7,481,700 0.58 0 7,481,700 0.58
Joanna Marie B. Soberano 7,481,700 0.58 0 7,481,700 0.58
Janella Mae B. Soberano 7,481,700 0.58 0 7,481,700 0.58
Jesus N. Alcordo 1 nil 0 1 nil
Rufino Luis Manotok 1 nil 0 1 nil
Ma. Aurora D Geotina-
Garcia 1 nil 0 1 nil
Total 1,284,000,000 100.00 0 1,284,000,000 100.00

Of the aforementioned Common Shares held by the Selling Shareholders, the Secondary Offer Shares shall
comprise of up to 150,000,000 shares owned by Jose R. Soberano III and Ma. Rosario B. Soberano with
75,000,000 shares forming part of the Firm Shares and the 75,000,000 as the Over-allotment Option Shares
such that after the completion of the offering (assuming the Over-allotment Option is exercised in full), the
resulting shareholdings in respect of the Common Shares of the Company shall be as follows:

Before the Offer After the Offer

Name of Shareholders Common Shares % Common Shares %

AB Soberano Holdings Corp. 985,823,197 76.78 985,823,197 57.52

Jose R. Soberano III 134,125,000 10.45 59,125,000 3.45
Ma. Rosario B. Soberano 134,125,000 10.45 59,125,000 3.45
Jose P. Soberano, Jr. 7,481,700 0.58 7,481,700 0.44
Jose Franco B. Soberano 7,481,700 0.58 7,481,700 0.44
Joanna Marie B. Soberano 7,481,700 0.58 7,481,700 0.44
Janella Mae B. Soberano 7,481,700 0.58 7,481,700 0.44
Jesus N. Alcordo 1 nil 1 nil
Rufino Luis Manotok 1 nil 1 nil
Ma. Aurora D Geotina-Garcia 1 nil 1 nil
IPO Investors 0 0 580,000,000 33.84
Total 1,284,000,000 100.00 1,714,000,000 100.00

To date, and prior to listing of the Registrant with the PSE, no part of the Companys equity is currently listed
in any trading market.

54
SECURITY OWNERSHIP OF CERTAIN RECORD AND BENEFICIAL OWNERS AND
MANAGEMENT

The following are persons who are directly or indirectly the record and/or beneficial owner of more than five
percent of any class of Companys voting securities:

Class of Name and Address of Record Name of Citizenship No. of Shares Held % of Total
Share Owner and Relationship Beneficial Outstanding
with Issuer Owner and Shares
Direct Indirect
Relationship (Direct and
with Record Indirect
Owner Ownership)
Common AB Soberano Holdings Corp. Soberano Filipino 985,823,197 0 76.78%
2nd Street, Villa San Lorenzo, Family*
Quijada
Brgy. Guadalupe, Cebu City
Common Jose R. Soberano III Same Filipino 134,125,000 473,195,136 47.30%
individual

Common Ma. Rosario B. Soberano Same Filipino 134,125,000 473,195,136 47.30%

individual
*Soberano Family consists of Jose R. Soberano III, Ma. Rosario B. Soberano, Jose P. Soberano, Jr., Jose Franco B.
Soberano, Joanna Marie B. Soberano and Janella Mae B. Soberano.

SECURITY OWNERSHIP OF MANAGEMENT

As of the date of this Prospectus, the following are the share ownership of directors and executive officers of
the Company:

Title of Name of Beneficial Owner Amount and Nature of Citizenship Percentage of Class
Class Beneficial Ownership (Direct and Indirect
Ownership)
Direct Indirect
Common Jose R. Soberano III 134,125,000 473,195,136 Filipino 47.30%
Common Ma. Rosario B. Soberano 134,125,000 473,195,136 Filipino 47.30%
Common Jose P. Soberano, Jr. 7,481,700 9,858,232 Filipino 1.35%
Common Jose Franco B. Soberano 7,481,700 9,858,232 Filipino 1.35%
Common Joanna Marie B. Soberano 7,481,700 9,858,232 Filipino 1.35%
Common Janella Mae B. Soberano 7,481,700 9,858,232 Filipino 1.35%

Except as disclosed above, none of the Companys other executive officers or department managers owns
shares directly or indirectly in the Company. Ownership in the Company is limited to that indicated in the
foregoing.

VOTING TRUST HOLDERS

The Company has no knowledge of any persons holding more than five percent of a class of shares of the
Company under a voting trust or similar agreement as of the date of this Prospectus.

CHANGES IN CONTROL

The Company has no knowledge of any arrangements that may result in a change in control of the Company.

SELLING SHAREHOLDERS

Before the Offer The Offer After the Offer

55
 Name of Selling Common % of Maximum Number Common % of Common
Shareholders and Shares Common of Shares to be Sold Shares Shares
Position Shares in the Offer Outstanding
Outstanding (including Over- after the Offer
before the Allotment Option
Offer Shares)

Jose R. Soberano III 134,125,000 10.45% 75,000,000 59,125,000 3.45%

Chairman of the
Board of Directors,
President and CEO

Ma. Rosario B. 134,125,000 10.45% 75,000,000 59,125,000 3.45%

Soberano
Director, Treasurer
and Executive Vice
President

56
 PLAN OF DISTRIBUTION

Approximately 70% of the Firm Shares, or up to [353,500,000] Firm Shares (the Institutional Firm Shares)
are being offered and sold to qualified buyers (the QIBs) in the Philippines and to the general public by the
Joint Lead Underwriters (the Institutional Offer). Approximately 30% of the Firm Shares or up to
[151,500,000] Firm Shares (the Trading Participants and Retail Firm Shares) are being offered and sold
by the Joint Lead Underwriters to (i) all Trading Participants of the PSE and (ii) LSIs under the Local Small
Investors Program of the Philippines (the Trading Participants and Retail Offer). The amount of Firm
Shares to be made available to the PSE Trading Participants will be up to [101,000,000] and up to [50,500,000]
Firm Shares to the LSIs, representing approximately 20% and 10% of the Firm Shares, respectively.

The allocation of the Firm Shares between the Institutional Offer and the Trading Participants and Retail Offer
is subject to adjustment as may be agreed between the Joint Lead Underwriters. The Joint Lead Underwriters
shall underwrite, on a firm commitment basis, the entire Firm Shares. There is no arrangement for the Joint
Lead Underwriters to return any unsold Firm Shares relating to the Institutional Offer or the Trading
Participants and Retail Offer to the Company of the Selling Shareholders.

The Firm Shares shall be lodged with the PDTC and shall be issued to the investors in scripless form. Investors
may maintain ownership over the Firm Shares in scripless form or opt to have the stock certificates in the
relevant investors name after the Listing Date by requesting an upliftment of the relevant Firm Shares from the
PDTCs electronic system.

THE JOINT LEAD UNDERWRITERS AND BOOKRUNNERS

To implement the Offer, the Company and the Selling Shareholders have appointed BDO Capital and BPI
Capital to act as the Joint Lead Underwriters and Bookrunners. The Company, the Selling Shareholders, and
the Joint Lead Underwriters shall enter into an Underwriting Agreement to be dated on or before [] (the
Underwriting Agreement), under the terms of which the Joint Lead Underwriters agree to underwrite, on a
firm commitment basis, the Firm Shares, subject to agreement amongst themselves regarding any clawback,
clawforward, or other such mechanism relating to the shares of the Institutional Offer and the Trading
Participants and Retail Offer.

BDO Capital is the wholly owned investment banking subsidiary of BDO. It obtained its license from the SEC
to operate as an investment house in 1998 and is licensed by the SEC to engage in the underwriting and
distribution of securities to the public. BDO Capital is primarily involved in equity management, underwriting
and placement, debt management, underwriting and syndication, financial advisory services, project finance
and securities trading. Its senior executives have extensive experience in the capital markets and performed
lead roles in a substantial number of major equity and debt issues, both locally and internationally. Since 1998,
BDO Capital has underwritten several public and private offerings of equity and debt in the Philippines. As of
the date of this Prospectus, BDO Capital has an authorized capital stock of P400,000,000 and paid up capital
stock of P300,000,000. In its eighteen (18) years of existence, BDO Capital has undertaken capital markets
transactions for both the Government and the private sector.

BPI Capital is a Philippine corporation organized in the Philippines as a wholly owned subsidiary of the Bank
of the Philippine Islands. It obtained its license to operate as an investment house in 1994 and is licensed by the
Philippine SEC to engage in underwriting and distribution of securities to the public. As of June 30, 2016, its
total assets amounted to 5.7 billion and its capital base amounted to 5.6 billion. It has an authorized capital
stock of 2.0 billion, of which approximately P506.0 million represents its paid-up capital. The Bank of the
Philippine Islands is 49.74% owned by Ayala Corporation as of June 30, 2016.

The Joint Lead Underwriters and their respective affiliates may have engaged or may be engaged in
transactions with, and have performed various investment banking, commercial banking and other services for
the Company, the Selling Shareholders and their respective subsidiaries and affiliates from time to time in the
future. However, all services provided by the Joint Lead Underwriters, including in connection with the Offer,
have been provided as independent contractors and not as fiduciaries to the Company or the Selling
Shareholders. The Joint Lead Underwriters do not have any right to designate or nominate a member of the

57
Board, nor does it have any direct relationship with the Company in terms of share ownership and, other than
as Joint Lead Underwriters for the Offer, do not have any material relationship with the Company.

THE INSTITUTIONAL OFFER

Up to [353,500,000] Firm Shares, or 70% of the Firm Shares, will be offered for subscription or purchase to
certain QIBs and the general public in the Philippines by the Joint Lead Underwriters.

The allocation of the Firm Shares between the Institutional Offer and the Trading Participants and Retail Offer
is subject to further adjustment as may be agreed between the Joint Lead Underwriters. In the event of an
under-application in the Institutional Offer and a corresponding over-application in the Trading Participants
and Retail Offer, Firm Shares in the Institutional Offer may be reallocated to the Trading Participants and
Retail Offer. In the event of an under-application in the Trading Participants and Retail Offer, the Firm Shares
in the Trading Participants and Retail Offer may be reallocated to the Institutional Offer. The reallocation shall
not apply in the event of an over-application or under-application in both the Institutional Offer and the Trading
Participants and Retail Offer.

THE TRADING PARTICIPANTS OFFER AND THE LSI OFFER

Pursuant to the rules of the PSE, the Trading Participants and Retail Firm Shares shall initially be offered by
the Joint Lead Underwriters to all of the PSE Trading Participants and LSIs in the Philippines. The Joint Lead
Underwriters shall allocate approximately [101,000,000] Firm Shares, or 20% of the Firm Shares, among the
Trading Participants of the PSE. Each Trading Participant shall initially be allocated approximately [765,100]
Firm Shares (computed by dividing 20% of the Firm Shares by 132 PSE Trading Participants) and subject to
reallocation as may be determined by the PSE. In addition, approximately up to [50,500,000] Firm Shares, or
10% of the Firm Shares, shall be allocated to the LSIs.

The Trading Participants of the PSE may be allowed to subscribe or purchase for their dealer accounts or sell
the Firm Shares to their clients during the Offer period at a price equal to the Offer Price. Likewise, the Trading
Participants are prohibited from selling the Firm Shares during the Offer Period and up to the date prior to the
Listing Date.

On or before [], the Trading Participants shall submit to the Receiving Agent their respective firm orders and
commitments to purchase Firm Shares prior to the closing of the Trading Participants and Retail Offer. Any
allocation of Trading Participants and Retail Firm Shares not taken up by the PSE Trading Participants and the
LSIs shall be distributed by the Joint Lead Underwriters to be distributed to its clients or the general public in
the Philippines or as otherwise agreed among the Joint Lead Underwriters. Trading Participants Firm Shares
and LSI Firm Shares not taken up by the PSE Trading Participants, the LSIs, the clients of the Joint Lead
Underwriters, or the general public shall be purchased by the Joint Lead Underwriters pursuant to the terms and
conditions of the Underwriting Agreement.

All applications to purchase or subscribe for the Firm Shares must be evidenced by a duly accomplished and
completed application form. An application to purchase Firm Shares shall not be deemed as a duly
accomplished and completed application unless submitted with all required relevant information and applicable
supporting documents to the Receiving Agent, Joint Lead Underwriters or such other financial institutions that
may be invited to participate in the Trading Participants and Retail Offer. Payment for the Firm Shares must be
made upon submission of the duly completed application form.

THE UNDERWRITING AGREEMENT

The Underwriting Agreement is subject to termination by the Joint Lead Underwriters if certain circumstances,
including force majeure, a cancellation order from a Government authority, a change or an impending change
of law that would materially and adversely affect the Companys profitability or financial condition, or any
change in the political or economic conditions of the Philippines which would materially and adversely affect
the Offer, occur on or before the Listing Date. The Underwriting Agreement shall provide that each of the Joint

58
Lead Underwriters, have agreed, jointly and not solidarily, to underwrite, on a firm commitment basis, the
respective number of Firm Shares indicated in the following table, at the Offer Price and in consideration for
payment of certain fees and costs.

Amount if Over- Amount if Over- %

Allotment Option not Allotment Option
Exercised Exercised
BDO Capital [] [] []
BPI Capital [] [] []
Total [] [] []

The Joint Lead Underwriters shall receive from the Company and the Selling Shareholders a fee of [1.5%] of
the gross proceeds of the Offer, inclusive of the amounts to be paid to the PSE Trading Participants. A Trading
Participant is entitled to a selling fee of [1.0]%, inclusive of any applicable VAT, of the Trading Participants
and Retail Firm Shares taken up and purchased by said Trading Participant. The selling fee, less a withholding
tax of 10%, will be paid to the relevant Trading Participant within ten banking days following the Listing Date.

THE OVERALLOTMENT OPTION

Subject to the approval of the SEC, the Selling Shareholders have granted BDO Capital, in its role as
Stabilizing Agent, an option exercisable in whole or in part from and including the Listing Date and when
trading of the Shares commences on the PSE and ending on the date 30 calendar days from the Listing Date to
purchase the Optional Shares on the terms and conditions approved by the SEC and provided in this
Prospectus. In connection therewith, the Selling Shareholders [have entered/will enter] into a Greenshoe
Agreement with the Stabilizing Agent. The Stabilizing Agent may purchase the Optional Shares in the exercise
of its Over-allotment Option from the open market in the conduct of stabilization activities.

The Stabilizing Agent may purchase the Optional Shares in the open market only if the market price of the
Common Shares falls below the Offer Price. Initial stabilizing action shall be at a price no greater than the final
Offer Price. The price for the subsequent stabilization activities shall be as follows:

i. after the initial stabilization action, and if there has not been an independent trade in the market at a
higher price than the initial stabilization trade, the subsequent trade shall be at or below the Offer Price
or the initial stabilizing price, whichever is lower; and

ii. after the initial stabilizing action, and if there has been an independent trade in the market at a higher
price than the initial stabilization trade, the subsequent trade shall be at or below the lower of the Offer
Price or the independent trade price.

For this purpose, independent trade shall mean any trade made by any person other than the Stabilizing Agent.
Such activities may stabilize, maintain or otherwise affect the market price of the Common Shares, which may
have the effect of preventing a decline in the market price of the Common Shares and may also cause the price
of the Common Shares to be higher than the price that otherwise would exist in the open market in the absence
of these transactions.

If the Stabilizing Agent commences any of these transactions, it may discontinue them at any time. Once the
Over-allotment Option has been exercised and payment has been made to the Selling Shareholders for the
shares sold by the Stabilizing Agent, it will no longer be allowed to purchase Common Shares in the open
market for the conduct of stabilization activities. Any decision to terminate the stabilization activities (and
accordingly return shares and/or cash to the Selling Shareholders) before the end of the 30-day stabilization
period shall be subject to the mutual agreement among the Stabilizing Agent, the Lead Underwriters, and the
Company on behalf of the Selling Shareholders.

The Overallotment Option, to the extent not fully exercised by the Stabilizing Agent, shall be deemed cancelled
and the relevant Optional Shares shall be re-delivered to the Selling Shareholders.

59
As the Stabilizing Agent, BDO Capital is authorized to conduct stabilization activities in connection with the
Offer and to perform such stabilization activities pursuant to the Greenshoe Agreement between the Selling
Shareholders and the Stabilizing Agent.

LOCK-UP/ESCROW

Existing shareholders who own an equivalent of at least 10% of the issued and outstanding shares of the
Company prior to the Offer are required under the Revised Listing Rules of the PSE applicable to companies
applying for listing on the PSE Main Board, not to sell, assign or otherwise dispose of their shares for a
minimum period of 180 days after the Listing Date.

The Revised Listing Rules of the PSE also require that if there is any issuance or transfer of shares or securities
(i.e., private placements, asset for shares swap or a similar transaction) or instruments which lead to issuance of
shares or securities (i.e., convertible bonds, warrants or a similar instrument) done and fully paid for within 180
days prior to the start of the offering period, and the transaction price is lower than that of the Offer Price in the
initial public offering, all shares or securities availed of shall be subject to a lock-up period of at least one year
from listing of the shares or securities.

In accordance with the foregoing, the Common Shares held by the following shareholders will be subject to
the lock-up periods specified below, each reckoned from the Listing Date:

Shareholder No. of % Total of % Total of % Total of Period of

Common Shareholdin Shareholding Shareholding Lock-up
Shares Held g before the after the Firm Assuming Full
before the Offer Offer Exercise of the
Offer Over-allotment
Option
AB Soberano Holdings Corp. 985,823,197 76.78% 76.78% 57.52% 180 days

Jose R. Soberano III 134,125,000 10.45% [5.64%] 3.45% 180 days

Ma. Rosario B. Soberano 134,125,000 10.45% [5.64%] 3.45% 180 days

Jesus N. Alcordo 1 nil nil nil 1 year
Rufino Luis Manotok 1 nil nil nil 1 year
Ma. Aurora D Geotina- 1 nil nil nil 1 year
Garcia

To implement this lock-up requirement, the PSE requires, among others, to lodge the shares with the PDTC
through a participant of the PDTC system for the electronic lock-up of the shares or to enter into an escrow
agreement with the trust department or custodian unit of an independent and reputable financial institution.

The Company, the Selling Shareholders and the shareholders listed above, being subject to the lock-up
requirement, will enter into an escrow agreement with BDO Trust as the escrow agent thereunder.

60
 CAPITALIZATION AND INDEBTEDNESS

The following table sets forth the balances of liabilities and shareholders equity of the Company as of
December 31, 2016. This table should be read in conjunction with the Companys audited financial statements,
including the notes thereto, included elsewhere in this Prospectus.

(All amounts in thousands Philippine Peso)

As of
December 31, 2016
As of as adjusted after giving
December 31, 2016 effect
to the Offer
Current liabilities P 2,059,632 P 2,059,632
P 1,749,041 P 1,749,041
Non-current liabilities
P 3,808,673 P 3,808,673
Total liabilities
Equity
Share capital
P 1,284,000 P 1,714,000
Common Shares
P0 P 2,230,000
Share premium
(P 625) (P 625)
Revaluation reserves
P 254,864 P 254,864
Retained earnings
P 1,538,239 P 4,198,239
Total equity
Total liabilities and equity P 5,346,912 P 8,006,912

61
 MANAGEMENTS DISCUSSION AND
ANALYSIS OF FINANCIAL POSITION AND FINANCIAL PERFORMANCE

The following managements discussion and analysis of the Companys financial position and results of
operations should be read in conjunction with the Companys audited financial statements, including the
related notes, contained in this Prospectus. This Prospectus contains forward-looking statements that involve
risks and uncertainties. The Company cautions investors that its business and financial performance is subject
to substantive risks and uncertainties. The Companys actual results may differ materially from those discussed
in the forward-looking statements as a result of various factors, including, without limitation, those set out in
Risk Factors on page [24] of this Prospectus. In evaluating the Companys business, investors should
carefully consider all of the information contained in Risk Factors on page [24] of this Prospectus.

FINANCIAL POSITION

The Companys total assets stood at P5.347 billion as of December 31, 2016, higher by 46.45% than the total
assets of P3.651 billion as of December 31, 2015, which was in turn higher by 29.22% than the total assets of
P2.825 billion as of December 31, 2014.

Total receivables stood at P2,253.82 million as of December 31, 2016, higher by 78.53% than the total
receivables of P1,262.46 million as of December 31, 2015, which was in turn higher by 58.71% than the total
receivables of P795.44 million as of December 31, 2014. Most receivables are contracts receivables resulting
from the Companys operations. The increase was due to sales recognition of completed projects such as
Velmiro Heights, Mivesa Garden Residences Phase 2, Casa Mira Linao in 2016 and Midori Plains, Midori
Residences, Park Centrale Tower, and Mivesa Garden Residences Phase 2 in 2015.

Real estate inventory stood at P1.831 billion as of December 31, 2016, higher by 27.20% than the total real
estate inventory of P1.440 billion as of December 31, 2015, which was in turn lower by 2.30% than the total
real estate inventory of P1.474 billion as of December 31, 2014. The increase was due to construction of on-
going condominium and housing projects and land development costs during the respective periods.

Deposits on land for future development stood at P259.90 million as of December 31, 2016, higher by 235.09%
than the total deposits on land for future development of P77.56 million as of December 31, 2015, which were
in turn higher by 72.36% than the total deposits on land for future development of P45 million as of December
31, 2014. The amounts pertain to the Companys advance payments for certain land acquisitions consummated
or are expected to be consummated in the following fiscal reporting year.

Prepayment and other current assets were P102.63 million as of December 31, 2016, higher by 4.45% than the
total prepayment and other current assets of P98.26 million as of December 31, 2015, which were in turn
higher by 44.86% than the total prepayment and other current assets of P67.83 million as of December 31,
2014. These are mainly made up of input VAT, prepaid income taxes, and prepaid expenses.

Investment in associates and joint ventures stood at P242.94 million as of December 31, 2016, and P12.68
million as of December 31, 2015. The Company has invested in its associates El Camino Developers Cebu,
Inc., Magspeak Nature Park, Inc., and Ming-mori Development Corporation. The Company has invested in
joint ventures BL CBP Ventures, Inc. and Yuson Excellence Soberano, Inc.

Property and equipment was P164.17 million as of December 31, 2016, higher by 118.13% than the total
property and equipment of P75.26 million as of December 31, 2015, which was in turn was higher by 206.26%
than the total property and equipment of P24.57 million as of December 31, 2014. Amounts are net of
depreciation. The increase was mainly due to additional building property and office equipment built or
acquired by the Company. The Company also invested P30 million for the procurement of a new enterprise
resource planning, SAP, to improve and streamline its finance and accounting functions and better manage its
business processes.

Investment properties were P297.66 million as of December 31, 2016, lower by 9.16% than the total
investment properties of P327.66 million as of December 31, 2015, which were in turn higher by 392.38% than

62
the total investment properties of P66.55 million as of December 31, 2014. The increase in 2015 was due to the
Company retaining more condominium units for their leasing business while the decrease in 2016 was due to
disposals and depreciation.

Total liabilities were P3.809 billion as of December 31, 2016, higher by 58.21% than the total liabilities of
P2.407 billion as of December 31, 2015, which were in turn higher by 25.76% than the total liabilities of
P1.914 billion as of December 31, 2014.

Interest bearing loans stood at P2.392 billion as of December 31, 2016, higher by 79.26% than the total interest
bearing loans of P1.334 billion as of December 31, 2015, which were in turn higher by 33.45% than the total
interest bearing loans of P999.93 million as of December 31, 2014. The increase corresponded to the growth of
the companys operations and the need to finance its construction and development of new projects.

Trade and other payables stood at P504.40 million as of December 31, 2016, higher by 33.14% than the total
trade and other payables of P378.87 million as of December 31, 2015, which were in turn lower by 10.91%
than the total trade & other payables of P425.27 million as of December 31, 2014.

Customers deposits stood at P456.97 million as of December 31, 2016, higher by 7.86% than the total
customers deposits of P423.65 million as of December 31, 2015, which were in turn higher by 38.40% than
the total customers deposits of P306.11 million as of December 31, 2014. The increase was due to more
projects attracting buyers who are required to make initial payments but the contract price revenues are not yet
recognized because the criteria for revenue recognition are yet to be met.

Reserve for property development stood at P327.24 million as of December 31, 2016, higher by 59.15% than
the total reserve for property development of P205.62 million as of December 31, 2015, which was in turn
higher by 30.73% than the total reserve for property development of P157.29 million as of December 31, 2014.
The increase was due to more projects already meeting revenue recognition criteria but has yet to be fully
completed.

Total equity stood at P1.538 billion as of December 31, 2016, higher by 23.69% than the total equity of P1.244
billion as of December 31, 2015, which was in turn higher by 36.50% than the total equity of P911.07 million
as of December 31, 2014.

Capital stock was at P1.284 billion as of December 31, 2016, higher by 53.28% than the total capital stock of
P837.69 million as of December 31, 2015, which was in turn higher by 55.79% than the total capital stock of
P537.69 million as of December 31, 2014. The increase in 2016 was due to the Company increasing its
authorized capital stock from P1 billion to P2.5 billion with its main shareholder, AB Soberano, subscribing to
and paying P400 million worth of capital stock of the Company. Subscription receivables were also settled by
the shareholders in 2016. The increase in 2015 was due to a stock dividend to shareholders of P300 million.

RESULTS OF OPERATION

Net income for 2016 was P702.32 million, an increase of 30.75% from 2015. Net income for 2015 was
P537.17 million, an increase of 23.90% from 2014. Net income for 2014 was P433.55 million.

In 2016, the Companys total revenues were P2.178 billion, an increase of 40.95% from 2015 total revenues of
P1.545 billion. In 2016, revenues from real estate sales were P2.139 billion, and revenues from rentals were
P38.87 million. Real estate sales from the following projects contributed to the majority of the total real estate
sales in 2016: Velmiro Heights, Mivesa Phase 2, and Casa Mira Linao.

In 2015, the Companys total revenues were P1.545 billion, an increase of 20.40% from 2014 total revenues of
P1.284 billion. In 2015, revenues from real estate sales were P1.533 billion, and revenues from rentals were
P12.56 million. Real estate sales from the following projects contributed to the majority of the total real estate
sales in 2015: Mivesa Phase 1 & 2, Midori Plains, Velmiro Heights and Midori Residences.

63
In 2014, the Companys total revenues were P1.284 billion, of which revenues from real estate sales were
P1.279 billion, and revenues from rentals were P4.22 million. Real estate sales from the following projects
contributed to the majority of the total real estate sales in 2014: Midori Plains, Park Centrale Tower, and
Midori Residences.

Corresponding to the increase in revenues, cost of sales and rental grew to P1.01 billion in 2016, from P671.83
million in 2015 and P578.30 million in 2014.

The Companys operating expenses for 2016 totals P 335.83 million, an increase of 25.08% of the prior years
operating expenses of P268.56 million.

For trends, events or uncertainties that have had or are reasonably expected to have an impact on sales or
revenues, see discussions under Risk Factors. There are no elements of income or loss that did not arise from
the Companys continuing operations.

Key Performance Indicators

2014 2015 2016
Gross Profit Margin1 55% 57% 54%
Net Income Margin2 34% 35% 32%

EBITDA 3 P500.32 million P 631.02 million P 875.94 million

EBITDA Margin4 39% 41% 40%

Return on Assets5 15% 15% 13%

6 50% 50%
Return on Average Equity
Current Ratio7 1.90 2.05 2.13

Debt to Equity Ratio 8 1.10 1.07 1.56

Interest Coverage Ratio9 48.16 61.51 52.86

1
Gross Profit Margin is gross profit as a percentage of revenues.
2
Net Income Margin is net income as a percentage of revenues.
3
EBITDA is defined as earnings before interest, tax, depreciation and amortization from continuing
operations and before exceptional items.
4
EBITDA margin is EBITDA as a percentage of revenues.
5
Return on Assets is net income as a percentage of assets.
6
Return on Average Equity is net income as a percentage of the average of the equity as at year-end and
equity as at end of the immediately preceding year.
7
Current Ratio is current assets divided by current liabilities.
8
Debt to Equity Ratio is interest bearing debt over total equity.
9
Interest Coverage ratio is EBITDA divided by interest expense.

64
 BUSINESS OVERVIEW

OVERVIEW

CLI is the leading homegrown developer in Cebu. In just 12 years since it started operations, it has become one
of the top real estate players in the region with its growing mix of residential, commercial, hospitality,
industrial and mixed-use product offerings. CLI is the number one local condominium developer in Cebu and
among the top three players in the local housing market 9. CLI takes pride in its top-quality, award-winning and
innovative developments, strong market demand and absorption, fast-selling projects, timely construction and
delivery, and its hands-on and personalized approach which allows itself to respond effectively to its clients
and industry partners.

Compared with other homegrown developers in Visayas and Mindanao, CLIs proven track record covers a
more diverse range of real estate product offerings. It caters to the high-end, mid-market, economic and
socialized housing segments of the market. This ability to tailor-fit its projects to the best use of each site has
enabled it to maximize the favorable supply and demand indicators in Cebu, CDO, Davao, Dumaguete and
soon in Bacolod and Iloilo.

CLIs real estate offerings have consistently enjoyed strong market demand and absorption. CLI commands an
11% market share in terms of the total supply of condominium units in Metro Cebu, second to Ayala Land, Inc.
(17%) and followed by Filinvest Land Inc. (8%)10. In terms of the number of condominium units sold, the
Company has a 9% market share, second to Ayala Land, Inc. (17%) and tied with Filinvest Land Inc. (9%)11.
This makes CLI the number one local condominium developer in Cebu. For the current housing market, CLI
ranks among the top three Cebu players with a 10% market share.12 CLI believes that its market share is bound
to grow even higher with its newly launched 3,000-unit Casa Mira project in the south of Cebu. Even as CLI
has diversified into high-rise residential, commercial and mixed-use developments, it remains committed to its
roots as a home developer, where its expertise has been sharpened.

CLIs projects are usually sold-out at a higher selling velocity than competitors 13. Among its completed
projects, 96% of the inventory has been sold out. CLIs notable projects include its mid-rise residential
condominium format, Mivesa Garden Residences, and its economic housing brand, Casa Mira, both of which
have sold out in less than three months on average. The strong market demand for the Companys projects as
evidenced by the fast absorption rate of its projects translates into faster cash flows, and demonstrates CLIs
ability to deplete its inventory at a faster rate.

Moreover, CLI takes utmost pride in its timely construction and delivery of projects, and it has even
outperformed national players in Cebu in that aspect. On the average, the Company can convert raw land into a
completed project in less than two to three years depending on the project size. CLIs condominium
developments Base Line Residences, Park Centrale Tower, Mivesa Garden Residences (Phase 1), and Midori
Residences were delivered to the buyers in two years, as committed by the Company in its marketing materials.

Across its 28 completed ongoing and newly launched developments as of the date of the Prospectus, CLI has
over 11,000 units in various stages of construction. These units have an equivalent sales value of P30 billion.
These are spread out among its growing number of commercial and high-end residential, mid-market,
economic and socialized housing projects.

For the three years ended December 31, 2014, 2015 and 2016, CLIs revenues amounted to 1.283 billion
1.545 billion and 2.178 billion, respectively. CLI has grown steadily in recent years, with net income

9
Santos Knight Frank Market Study, September 16, 2016, p. 64.
10
Id., p. 56.
11
Id., p. 64.
12
Id, p. 65.
13
Id., p. 66.

65
increasing from 433.54 million in 2014 to 702 .32 million in 2016, representing a CAGR of 27.28% during
that period.

The Company aspires to be the leading and most preferred local developer in the Visayas and Mindanao by
2020.

Real estate development overview

The Companys project mix, which includes projects in various stages of development, is composed of 80%
residential projects, 18% commercial/office developments and 3% hotel projects, measured in terms of total
sales value. To date, CLI has 13 completed developments, 15 projects in various stages of development, and
eight possible future projects where final definitive agreements are yet to be finalized and signed.

Completed projects

The Companys 13 completed developments are a mix of vertical and horizontal residential projects and its first
commercial office development. Majority of the projects are fully sold out, showing that CLI is a trusted brand
in the local housing market in Cebu. Below is a list of the Companys completed projects to date.

No. of Sold
Project Type Use
Units Units
1 San Jose Maria Village - Balamban Horizontal Mid-Market Housing 231 191
2 San Jose Maria Village - Minglanilla Horizontal Mid-Market Housing 145 145
3 San Jose Maria Village - Talisay Horizontal Mid-Market Housing 96 96
4 San Jose Maria Village - Toledo Horizontal Mid-Market Housing 144 84
5 Villa Casita Horizontal Socialized Housing 101 101
6 Midori Plains Horizontal Mid-Market Housing 370 369
7 Asia Premier Residences Vertical Residential Condo 88 88
8 Base Line Residences Vertical Residential Condo 201 201

66
 9 Midori Residences Vertical Residential Condo 396 393
10 Park Centrale Tower Vertical Office Condo/BPO 50 50
11 Mivesa Garden Residences (Phase 1) Vertical Residential Condo 479 479
12 Velmiro Heights (Phase 1) Horizontal Mid-Market Housing 347 342
13 Casa Mira Linao Horizontal Economic Housing 725 725

Ongoing projects (under construction)

CLI has the following ongoing projects in various stages of construction. The projects are all located in Metro
Cebu, except for MesaVerte Residences which forms part of the Companys expansion in CDO.

Percentage
No. of Sold
Project Type Use of
Units Units
Completion
5. Base Line Center* Vertical Mixed-Use -
d. Base Line Premier Vertical Residential Condo 379 318 31%
e. Base Line HQ Vertical Office Condo/BPO 52 26 80%
f. Citadines Cebu City Vertical Hotel 92 76 30%
6. Casa Mira Towers Labangon Vertical Residential Condo 686 683
Tower 1 38%
Tower 2 12%
7. MesaVerte Residences (Phase 1) CDO Vertical Residential Condo 504 482
Tower 1 33%
Tower 2 27%
8. Mivesa Garden Residences (Phase 2)** Vertical Residential Condo 459 433 98%

67
 *Base Line Center is a mixed-use development which includes Base Line Premier, Base Line HQ and Citadines Cebu
City.
**Mivesa Garden Residences (Phase 2) is expected to be completed and turned over to buyers by Q2 2017.

Other ongoing projects

In addition to its projects under construction, CLI has in its portfolio a mix of horizontal and vertical housing
projects in various stages of development. CLI has completed land development for MesaVerte Residences
(Phase 2) in CDO and is currently pre-selling the project. The Company is set to commence land development
and marketing efforts for the other Cebu-based projects in the table below.

Percentage
No. of Sold
Project Type Use of
Units Units
Completion
1. MesaVerte Residences (Phase Vertical Residential Condo 294 73 0%
2) Tower 3 CDO
2. Casa Mira South (Phase 1) Horizontal Economic Housing 1,007 623 5%
3. Casa Mira South (Phase 2) Horizontal Economic Housing 962 - 0%
4. Casa Mira South (Phase 3) Horizontal Economic Housing 1,273 - 0%
5. Mivesa Garden Residences Vertical Residential Condo 502 - 0%
(6-7) (Phase 3)
6. Velmiro Heights (Phase 2) Horizontal Mid-Market Housing 81 - 92%

68
Newly-launched projects

The Company has launched a roster of vertical mixed-use and residential developments in the last quarter of
2016 to the first quarter of 2017 in Metro Cebu and Davao. Shortly after launching these latest projects, CLI
has started site preparations for Latitude Corporate Center and 38 Park Avenue at the Cebu IT Park, and is now
pre-selling both projects. Once the necessary permits are secured, CLI will commence the development of its
flagship project in Davao, MesaTierra Garden Residences.

CLIs newly-launched projects are the result of the Companys strategic collaboration with its joint venture
partners, which enabled the Company to position itself in strategic locations and obtain the necessary funding
for prime property acquisitions, without straining its finances and limiting its capability to continue its existing
projects.

Latitude Corporate Center is a project of BL CBP Ventures, Inc., a joint venture between CLI and Borromeo
Bros. Estate Inc. Meanwhile, 38 Park Avenue at the Cebu IT Park is a project of El Camino Developers Cebu,
Inc. (El Camino), a joint venture between the Company and several individual partners. Lastly, MesaTierra
Garden Residences Davao is a project of Yuson Excellence Soberano, Inc., a joint venture between CLI and
Yuson Comm. Investments, Inc. (Yuson). In all these JV projects, CLI has been appointed as the project
developer and manager and is entitled to receive management fees.

No. Of Sold
Project Type Use
Units Units
1. Latitude Corporate Center, Cebu Vertical Office Condo/BPO 83 63
Business Park
2. 38 Park Avenue at the Cebu IT Vertical Residential/Retail 744
Park
3. MesaTierra Garden Residences Vertical Residential Condo 650
Davao

Pipeline projects

In 2017, CLI is set to launch several projects in Metro Cebu such as the AS Fortuna Center Mandaue, a mixed-
use project along A.S. Fortuna Avenue, a bustling business and residential corridor located in Mandaue City,
Cebu. The Company intends to develop this 9,989-sq.m. property with its joint venture partners as a boutique
mall with a residential, office and commercial component. The Company will also launch Base Line Center
(Phase 2) and Casa Mira Towers Guadalupe this year.

It has also positioned itself in the next two years with key pipeline projects in VisMin such as Casa Mira Coast
in Dumaguete, Velmiro Heights in CDO and Casa Mira Bacolod.

Project Type Use Location

1. AS Fortuna Center Mandaue Vertical Mixed-use Mandaue, Cebu
2. Casa Mira Coast Horizontal Residential Sibulan, Dumaguete
3. Base Line Center (Phase 2) Vertical Residential Cebu City
4. Velmiro Heights CDO Horizontal Residential CDO
5. Casa Mira Towers - Guadalupe Vertical Residential Cebu City
6. Casa Mira Bacolod Vertical Residential Bacolod City

Prospects

The Company is also looking into possible future projects with its existing JV partners and associates. While
the definitive agreements for these projects have yet to be finalized and signed, the Company is either firming

69
up negotiations with landowners, or is intending to sign an agreement with its JV partner or associate for CLI to
be the project developer and manager.

Among the projects that CLI is looking into is its public-private partnership with the Municipality of
Minglanilla through its affiliate Ming-Mori Development Corporation. CLI has subscribed to shares equivalent
to 19.87% of Ming-Mori, the issuance of which is subject to the approval by the SEC of Ming-Moris increase
in authorized capital stock. The Company intends to diversify into industrial development through Ming-Moris
proposal to finance, design and undertake the Ming-Mori Reclamation Project which was accepted and
endorsed by the municipal council of the Municipality of Minglanilla in May 2013. The Municipality of
Minglanilla has submitted to the PRA a letter of intent to undertake the reclamation and land development of
the proposed project, and in December 2016, the Municipality entered into a Memorandum of Understanding
with the PRA setting out requirements and timeline for the review and evaluation of the project.

Should the Minglanilla Reclamation Project materialize and be awarded to Ming-Mori after completing public
bidding and Swiss challenge requirements, as applicable, Ming-Mori plans to enter into an agreement where
CLI will be appointed as the project developer and manager, and for which CLI will be paid a management fee
as may be agreed by the parties.

Once the reclamation is complete, CLI will develop and manage the proposed Minglanilla TechnoBusiness
Hub, a 100-hectare techno-business park in the progressive town of Minglanilla, a mere 30 minutes away from
Cebu City. With Cebus scarce supply of industrial properties that are in close proximity to highly urbanized
areas, this project is expected to generate over 75,000 jobs.

On the other hand, the Companys associate, Magspeak Nature Park, Inc. 14 (Magspeak) plans to develop a
30-hectare outdoor leisure park and conference center to be launched in 2017 in Mt. Manunggal, the highest
mountain in Cebu.

The Company is also completing the acquisition of the land where Casa Mira Towers Guadalupe will be
constructed. The Company also plans to construct a Grade A office building on its 1.17-hectare property inside
the Cebu IT Park to be named the Park Avenue Corporate Center. Lastly, the Company is in talks with several
landowners for its planned Mactan Hotel Project.

Meanwhile, the two Davao mixed-use developments are intended as future projects of the Company and
Yuson, subject to the final agreement between the parties.

In Iloilo, the Company is finalizing the acquisition of a property as it is targeting to launch Casa Mira Iloilo by
Q3 2017.

CLI will also position itself in the booming tourism hub of Bohol, eyeing to bring its economic housing brand,
Casa Mira, which will suit locals benefiting from the growing economic activity and Bohol OFWs.

Project Type Use Location

1. Minglanilla TechnoBusiness Hub Horizontal Mixed-use Cebu
2. Magspeak Leisure Park Horizontal Recreational Cebu
3. Casa Mira Towers - Guadalupe Vertical Residential Cebu
4. Park Avenue Corporate Center Vertical Office Condo/BPO Cebu
5. Mactan Hotel Project Vertical Hotel Cebu
6. Davao Mixed Use - Riverside Vertical Mixed-use Davao
7. Davao Mixed Use - Times Beach Vertical Mixed-use Davao

14
As of the date of the Prospectus, Mr. Jose R. Soberano, III has executed a Deed of Assignment in favor of CLI for his
shares in Magspeak, but the BIR Certificate of Registration of the shares is still being processed.

70
 8. Casa Mira Iloilo Horizontal Residential Iloilo
9. Casa Mira Bohol Horizontal Residential Bohol

Residential development

CLIs initial forte is in residential development. It created a niche when it started developing low to middle cost
subdivisions in the south of Cebu, with house and lot packages ranging from P2 million to P5 million. Today,
CLI is one of the leading horizontal and vertical residential players in Cebu. More importantly, CLI has
diversified its residential offerings to cater to the four major market segments socialized, economic, mid-
market and high-end.

High-end residential developments have a price of more than P4 million per unit, while mid-market housing
projects are priced at P3 million to P4 million per unit. Economic housing should be priced within the range of
P450,000 to P3 million. Meanwhile, to qualify as socialized housing, the housing units must be sold at a price
not exceeding P450,000.

The list below categorizes the projects according to market segments:

Horizontal (Subdivision) Projects:

Socialized: Villa Casita, Guadalupe Pinamalayan Socialized Housing Project

Economic: Casa Mira Linao, Casa Mira South
Mid-Market: San Jose Maria Villages, Midori Plains, Velmiro Heights

Vertical (Condominium) Projects:

Economic: Casa Mira Towers Labangon, Casa Mira Towers Guadalupe (2017)
Mid-Market: Midori Residences, Mivesa Garden Residences, MesaVerte Residences CDO
High-End: Asia Premier Residences, Base Line Residences, Base Line Premier

71
Residential development projects

Horizontal (Subdivision) Projects

Villa Casita

Launched in 2014, this is CLIs first socialized housing development and is located in Buanoy, Balamban,
Cebu. With an area of 8,128 sq.m., it consists of 101 row house units, with each unit having a lot area of 36
sq.m. and a floor area of 22.65 sq.m. Pre-sold units were priced at about P400,000. It is fully developed,
completed and sold out.

Guadalupe Pinamalayan Socialized Housing Project

Launched in 2015, this socialized housing project is developed in cooperation with Habitat for Humanity and is
located in Pinamalayan, Oriental Mindoro. The 38,639-sq.m. project consists of 337 single-floor and detached
units, 77 of which have been allocated to Habitat for Humanity beneficiaries.

Casa Mira Linao

Launched in 2015, this is CLIs first foray into economic housing development. The project is located in the
hills of Linao-Lipata, Minglanilla, Cebu on a 7.8-hectare property. It is composed of 725 townhouse units with
floor areas ranging from 37 to 62 sq.m. and lot areas ranging from about 42 sq.m. to more than 52 sq.m. per
unit. Average selling price starts at P900,000 for the smallest unit and up to about P1.4 million for the largest
unit. It is fully developed, completed and sold out.

Casa Mira South

Launched in 2016, this economic housing development is located in the Naga City and the Municipality of San
Fernando, both in Cebu. This 31-hectare community is divided into three phases consisting of 3,242 townhouse
units, with each unit having floor areas ranging from 36 to 59 sq.m. and lot areas ranging from 42 sq.m. to
more than 68 sq.m. Average pre-selling price ranges from P1.07 million to P1.6 million. Land development
will start in 2017 and will cover a period of two years.

San Jose Maria Villages (SJMV)

This series of villages located in the south and southwest of Cebu City paved the way for CLI in providing
affordable mid-cost quality homes to the middle market segment. SJMV offered a mix of single-detached,
semi-attached townhouses and lot-only choices to the buyers. SJMV-Balamban is a three-hectare development
with 231 units launched in 2013. SJMV-Minglanilla is a 2.9-hectare development with 145 units launched in
2007. SJMV-Toledo is a 3-hectare development with 144 units launched in 2009. SJMV-Talisay is a 1.9-
hectare development with 96 units launched in 2010. Lots were pre-sold at P7,000 per sq.m., while house and
lot units averaged at P1.4 million to P3.6 million. All SJMV projects are fully developed and completed, with
both SJMV-Minglanilla and SJMV-Talisay sold out.

Midori Plains

Launched in 2011, this mid-market development is located in Municipality of Minglanilla, Cebu. This eight-
hectare Asian-inspired subdivision south of Cebu City has 370 residential units ranging from townhouse units
with 40-sq.m. floor areas to single-detached units with an area of 77 sq.m. each. It is fully developed,
completed and almost sold-out, with only one of the 370 units remaining unsold.

Velmiro Heights

This mid-market development was launched in 2013 and is located on an 8.8-hectare property in Tunghaan,
Minglanilla, Cebu. This 428-unit development offers 11 different house models, ranging from townhouses to
single-detached, two-storey units. Townhouses have 60-sq.m. floor areas, while the largest unit contained 131

72
sq.m. of living space. Townhouses were pre-sold at an average price of P1.7 million while the largest single-
detached unit is about P5.3 million. Site development for Phases 1 and 2 of the project is already completed. Of
the 428 units for Phase 1, only five units remain unsold, while the 81 units belonging to Phase 2 are still being
marketed.

Vertical (Condominium) Projects

Casa Mira Towers Labangon

Launched in 2016, this is CLIs first foray in the economic segment of residential condominiums. It is located
in Labangon, Cebu City on a 3,681-sq.m. property that used to be the location of the old CLI headquarters. It
has two towers on top of a commercial podium and a total of 686 residential units. It offers 20-sq.m. studio
units and 1-bedroom units averaging 37 sq.m. units were pre-sold at P1.25 million to P1.43 million.
Development started in June 2016 and is expected to be finished by the middle of 2018. Only 270 units remain
unsold of the 686 units being offered.

Casa Mira Towers Guadalupe

This development is slated for launch in late 2017. To be located in Barangay Guadalupe, Cebu City, this will
be the second residential condominium development of CLI targeting the economic segment of the market.

Midori Residences

This zen-inspired mid-market residential condominium development is located in Banilad, Mandaue City,
Cebu. This twin-vertical development is the first of its kind in the city. Its 22-sq.m. studio and 40-sq.m. 1-
bedroom units were pre-sold at an average of P1.3 million to P2.6 million. It is fully developed, completed and
almost sold out, with a total of 388 units sold from the 396 units offered.

Mivesa Garden Residences

Located in Lahug, Cebu City and launched in 2013, this 1.8-hectare development will be home to seven mid-
rise, mid-market residential buildings, and is designed as a garden-inspired community which has 60% open
spaces within the prime property. This is a three-phase project with the first two phases covering the first five
buildings. The first two phases offers 938 units consisting of studio, 1-bedroom and 2-bedroom units. Pre-
selling starts at P1.2 million for a 20-sq.m. studio unit, and up to P2.9 million for a 2-bedroom 48-sq.m. unit.
Phase 1 and 2 are almost sold out with 908 out of the 938 units sold.

Land development is completed and Buildings 1, 2 and 3 of Phase 1 being operational. Buildings 4 and 5 of
Phase 2 will be operational by Q1 2017. Buildings 6 and 7 of Phase 3, with a total of 502 units, will start
construction by Q3 2017.

MesaVerte Residences

Launched in 2015, this is CLIs first entry into the Mindanao market. It is located on an 8,740-sq.m. property in
downtown CDO, Misamis Oriental, and 60% of the property is dedicated to open spaces. The project is divided
into two phases, with Phase 1 having two towers composed of 504 units, and Phase 2 having one tower with
294 units. Both phases offer 20-sq.m. studio and 39 sq.m. 1-bedroom units. Phase 1 pre-sold at P1.47 million
for studio units and P2.88 million for 1-bedroom units. Phase 1 development started July 2016 and is expected
to be completed by July 2018. A total of 422 out of the 504 units have been sold for Phase 1. Phase 2 will start
development in April 2017 with an estimated completion time of 24 months.

Asia Premier Residences

Launched in 2010, this is CLIs first vertical high-end residential condominium project. It is located at the
Cebu IT Park and is also the first residential development in the area. The units ranged from studio units sized

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at 28 sq.m. and 3-bedroom units measuring 109 sq.m. It is fully developed and completed and has since sold
out its 88 units.

Base Line Residences

This 201-unit residential condominium project is located in uptown Cebu City on Juan Osmea Street. The
project offered 23-sq.m. studio units at a pre-selling price of P1.59 million, while its 41-sq.m. 1-bedroom unit
pre-sold at P3.15 million. The project was launched in 2011, and is fully developed and completed, with its 201
units having been sold out.

Base Line Premier

This development was launched in 2015 as the residential component of Base Line Center, a one-hectare
mixed-use development located along Juan Osmea Street, Cebu City and right beside another CLI project,
Base Line Residences. It has 379 units consisting of 24-sq.m. studio and 45-sq.m. 1-bedroom units. Studio
units pre-sold at P2.22 million, while 1-bedroom units pre-sold at P4.16 million. Construction started in March
2016 and is expected to be completed in December 2018.

Commercial development

CLI capitalized on the growth of the BPO sector in Cebu when it launched its first commercial office project,
Park Centrale Tower, in 2013 at the Cebu IT Park. This is also part of CLIs strategy of significantly growing
its recurring income properties. It has also launched two more office developments in prime Cebu City
locations, namely Base Line HQ and Latitude Corporate Center. Base Line HQ will be part of the Base Line
Center mixed-use development and will be completed in Q1 2019. In November 2016, CLI launched Latitude
Corporate Center, a Grade A office tower at the Cebu Business Park with a GFA of 35,000 sq.m.

Office Buildings: Park Centrale Tower, Base Line HQ, Latitude Corporate Center, Park Avenue
Corporate Tower

Commercial development projects

Park Centrale Tower

Park Centrale Tower is CLIs first office development. Located at the Cebu IT Park, the 19-storey Grade A
office tower was launched in 2013 with a total construction floor area of 17,500 sq.m., and total GFA of 11,920
sq.m., and was completed in only two years of construction. The project was positioned to cater to both BPOs
and executive offices. Thus, 60% of the office spaces were offered for lease, while 40% were sold as office
condo units and were fully sold-out. In 2014, the project was awarded as the Best Commercial Development
(Cebu) at the 2014 Philippines Property Awards.

Base Line HQ

This is the office component of the Base Line Center, a major mixed-used project of CLI. Similar to its
successful Park Centrale Tower, this also caters to both BPOs and executive offices. CLI offers for sale 60% of
the floors as office condos, while the Company will retain 40% for its growing leasing business. With its
location near Osmea Boulevard/Mango Avenue, this will emerge as a very strategic business address for those
in the medical, legal, government and outsourcing services. There are a total of 74 office units with areas
ranging from 33 sq.m. to 142 sq.m.

Latitude Corporate Center

This is a green building project registered with BERDE, the nationally accepted green building rating system
used to measure, verify and monitor the environmental performance of buildings that exceed existing
mandatory regulations and standards in the Philippines. This 34,000-sq.m. development is a project of BL CBP
Ventures, Inc., a joint venture company of CLI and Borromeo Bros, Inc. At 24-storeys, this will be the tallest

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office development at the Cebu Business Park. As the projects developer and manager, CLI uniquely
positioned this project as a three-product office development with BPO, enterprise and executive office
offerings. With its iconic design and green building features, the project is aiming for a 3-star BERDE
certification.

Park Avenue Corporate Tower

This Grade A office building with over 20,000 sq.m. of leasable area is one of the Companys future projects in
the recently acquired 1.17-hectare property inside the Cebu IT Park. The development will cater to BPO and
other commercial offices and retail establishments.

Mixed-use development

With its growing brand, experience and portfolio, CLI pursued larger scale developments in prime urban
locations. CLIs first major mixed-use development is the Base Line Center, a 1.6-hectare modern
redevelopment in the heart of midtown Cebu. The Company removed the existing structures in the old Base
Line, a well-known favorite gathering place of Cebuano families, and built a mixed-use development. Phase 1
of Base Line Center will be completed in Q1 2019. It will house a retail center, residential condominium units,
offices and the first Ascott-managed property outside Manila, the Citadines Cebu City.

This 2017, CLI is set to launch another major mixed-used development, the AS Fortuna Center, in the bustling
AS Fortuna Mandaue area, a growing commercial district and the major thoroughfare that connects Cebu and
Mandaue. This medium-density project will house a hotel, residential, office and boutique mall.

CLI, through its joint venture, El Camino, also recently acquired a 1.17-hectare property inside the Cebu IT
Park, the largest remaining private property inside the prestigious address. This property called 38 Park Avenue
at the Cebu IT Park, will be transformed into a mixed-use urban park with a 38-storey residential tower, BPO
office and retail boulevard.

Mixed-Use Developments: Base Line Center, AS Fortuna Center Mandaue, 38 Park Avenue at the
Cebu IT Park

Hotel and recreational development

Aside from residential and commercial developments, CLI has recently entered the hospitality business after
sealing a partnership with Scotts Philippines, Inc., a wholly-owned subsidiary of The Ascott Limited
(Ascott), the worlds largest serviced residence operator. CLI will develop Citadines Cebu City, with Ascott
as the hotel operator. Citadines Cebu City will house over 180 rooms, of which 92 condotel units were offered
for sale and 88 units will be retained by the Company As of the date of this Prospectus, 76 condotel units were
already sold.

As part of the upcoming AS Fortuna Center, CLI will add a second hotel property to its portfolio. As of Q1
2017, the Company is still evaluating potential global management brands that will run the hotel.

A third hotel, the Mactan Hotel Project, is part of the Companys future prospects as the Company is currently
negotiating with property owners of key sites in Cebus resort haven, Mactan Island.

Meanwhile, the Companys associate, Magspeak plans to develop the Magspeak Leisure Park, a 30-hectare
outdoor leisure park and conference center in Mt. Manunggal to be launched in 2017.

Hotel and Recreational Development: Citadines Cebu City, AS Fortuna Center Hotel Project, Mactan
Hotel Project, Magspeak Leisure Park

Industrial development

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CLI intends to diversify into industrial development through its associate, Ming Mori, which has proposed to
finance, design and undertake the Ming-Mori Reclamation Project through private-public partnership with the
Municipality of Minglanilla. The proposal of Ming-Mori was accepted and endorsed by the municipal council
of the Municipality of Minglanilla in May 2013 and since then, the Municipality of Minglanilla has submitted
to the PRA a letter of intent to undertake the reclamation and land development of the proposed project.

In December 2016, the Municipality entered into a Memorandum of Understanding with the PRA setting out
requirements and timeline for the review and evaluation of the project, and as of the date of this Prospectus,
CLI has subscribed to shares equivalent to 19.87% of Ming-Mori, the issuance of which is subject to the
approval by the SEC of Ming-Moris increase in authorized capital stock.

This project is intended to be the Companys initial foray into the industrial property segment. See Business
Overview Prospects on page [66] of this Prospectus.

Industrial: Minglanilla TechnoBusiness Hub

Regional expansion

For the completion of the following regional expansion projects, the Company will use part of the proceeds of
the Offer, internally generated funds or bank financing, as may be necessary. For a more detailed discussion of
the allocation of the proceeds of the Offer for new projects in the VisMin region, please refer to the section on
Use of Proceeds.

CDO

After 20 developments in Cebu, CLI debuted its first regional expansion when it launched its MesaVerte
Residences in CDO. MesaVerte Residences is a three-tower condominium complex in the heart of downtown
CDO and is expected to be completed by Q4 2018. A second project in CDO is in the pipeline this 2017 as CLI
will be launching Velmiro Heights CDO, a mid-market housing project in the Pueblo De Oro area.

Davao

CLI has recently positioned itself in Davao, where it introduced its highly successful mid-market condominium
format. The Company launched in Q1 2017 MesaTierra Garden Residences, a 21-storey residential
condominium with over 694 units, located on E. Jacinto St., Davao, which is targeted for completion by Q3
2020.

The Company is also firming up its plans to develop two mixed-use projects in Davao, (1) a 1.9-hectare
riverside mixed-use project along McArthur Highway, and (2) another major mixed-use lifestyle project in a
four-hectare property in Times Beach, Matina.

Dumaguete

The Company has recently completed the acquisition of a six-hectare property in Sibulan, Dumaguete. This
will be the site of another Casa Mira economic housing development. Situated near the coastline, the project
will be called Casa Mira Coast.

Bacolod

Going further into other areas in the Visayas to roll out its economic housing brand Casa Mira, CLI has
completed the acquisition of a one-hectare property in Bacolod. The Company intends to launch Casa Mira
Bacolod by Q3 2017.

Iloilo

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The Company is finalizing the acquisition of a property in Iloilo as the Company is set to launch Casa Mira
Iloilo in Q3 2017.

Bohol

CLI will also position itself in the booming tourism hub of Bohol. With the ongoing development of the
Panglao International airport set to open within 2017, the Company is anticipating a substantial increase in
local economic activity. Thus, the Company is eyeing to bring its economic housing brand, Casa Mira, which
will suit locals benefiting from the growing economic activity and Bohol OFWs.

With its diverse portfolio, CLI is able to tailor-fit its various product offerings to address the right supply and
demand indicators and maximize the full potential of a property.

Regional Developments:

CDO: MesaVerte Residences, Velmiro Heights CDO (2017)

Davao City: MesaTierra Garden Residences (2017), Mixed-Use (McArthur / Matina
Dumaguete: Casa Mira Coast (2017)
Iloilo: Casa Mira Iloilo (2017)
Bacolod: Casa Mira Bacolod (2017)
Bohol: Casa Mira Bohol (2017)

COMPETITIVE STRENGTHS

Leading property developer in Cebu with a distinguished brand and reliable track record of project
execution

CLI is the leading homegrown property developer in Cebu with extensive knowledge and experience of the
local market, a strong relationship with the local broker community, a trusted brand by its buyers and end-
users, and a preferred partner of landowners as demonstrated by its successful JV partnerships.

CLI commands an 11% market share in terms of the total supply of condominium units in Metro Cebu, second
to Ayala Land, Inc. (17%) and followed by Filinvest Land Inc. (8%) 15. In terms of the number of condominium
units sold, the Company has a 9% market share, second to Ayala Land, Inc. (17%) and tied with Filinvest Land
Inc. (9%)16. This makes CLI the number one local condominium developer in Cebu. For the current housing
market, CLI ranks among the top three Cebu players with a 10% market share. 17

CLI has been fast to respond to market demand, outpacing national developers in finishing construction and
delivering completed units to its customers. On the average, CLI can convert raw land to a turned-over project
in less than two to three years depending on the project size. CLIs condominium developments Base Line
Residences, Park Centrale Tower, Mivesa Garden Residences (Phase 1), and Midori Residences were delivered
to the buyers in two years, as committed by the Company in its marketing materials.

The Company adopted a rigorous project management team approach, wherein key personnel from each
business unit are given a regular platform to monitor project milestones and discuss important synergies and
shared deliverables among business units.

15
Id., p. 56.
16
Id., p. 64.
17
Id, p. 65.

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Strategic location selection to provide value-for-money proposition to customers

CLI has stringent location selection criteria. The Company consistently seeks locations with high-value
appreciation potential. Whether for a high-end condominium project or an economic housing project, CLIs
location selection has always been a driver for its outstanding sales performance. In Cebu City alone, CLI has
projects in the most valuable real estate locations Cebu IT Park, Cebu Business Park, Salinas Drive (Lahug),
AS Fortuna (Mandaue), Base Line (midtown Cebu). For its mid-market and economic housing projects, the
Company targets sites within a two-kilometer distance from the nearest highway. The Company has improved
the neighborhood infrastructure around several of its housing projects. This has always proven to result in a
win-win situation for both the residents and the neighboring community.

As a homegrown developer, CLIs familiarity with the area and its communities enables the Company to
choose the best locations for its developments and to address the needs and preferences of the market. CLIs
first development, San Jose Maria Village - Balamban, came about because the founder, Mr. Jose R. Soberano,
III knew that there was a ready market composed of employees of the industrial companies in Balamban for
affordable housing.

Because of CLIs proven track record and the fact that it is a local developer, landowners who wish to sell or
develop their properties find it easier to approach and trust the Company than other national players. This is
demonstrated by the number of proposals from landowners regularly received by the Company for CLI to buy
or develop their properties.

CLI gives its clients more value for their investment. Its competitive pricing is accompanied by quality
locations, award-winning planning and design, generous amenities, timely and quality construction, and
industry-best customer care, after-sales and property management support. As the CLI has inventory in various
affordability levels, it has a strong grasp of its target pricing levels. As a success criterion and as practiced, CLI
has always projected its initial pre-selling prices to appreciate by at least 20-25% by the time the construction is
completed. As an indication of the warm market response, several of its projects have set selling records in
Cebu18. Among its completed projects, 96% of the inventory has been sold out. CLIs Mivesa Garden
Residences and Casa Mira have sold out in less than three months on average. Casa Mira Linao which has 725
units sold out in just three weeks.

Diversified portfolio of projects and socio-economic markets

CLI caters to several real estate categories such as residential, commercial/offices and hospitality. The
Companys current project mix, which includes projects in various stages of development, is composed of 80%
residential projects, 18% commercial/office developments and 3% hotel projects, measured in terms of total
sales value.

18
Id., p. 66.

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CLIs biggest project development is economic housing through the Casa Mira brand comprising 44% of the
Companys total revenues from its residential projects. This is followed by mid-market developments at 38%
and high-end residential developments at 16%. Socialized housing comprises only 2% of the Companys
residential projects, with two projects to date.

Because of the Companys diverse portfolio of projects addressing the needs of customers from all socio-
economic classes, the Company should be less affected by negative economic trends that impact a certain
segment of the market. The Company is also able to harness the full potential of the market with its capability
to supply whatever the market demands.

Experienced management team and organizational culture

The management teams efforts to professionalize the company over the last 12 years, where the company has
grown from two employees to a dynamic team of 162 executives, managers, officers and staff, have built the
Companys professional work ethics and strong corporate values. CLIs customer-first attitude and family-
oriented team enabled the Company to achieve high stakeholder satisfaction and establish strong brand equity.

CLI is led by a family of real estate professionals. Its founder, Chairman of the Board of Directors, President
and CEO Jose R. Soberano III, was a former executive at Ayala Land where he played an integral role in the
development of Cebu Business Park and Cebu IT Park, the two most valuable commercial districts in Cebu
City up to this day. CLI has grown its talent pool with the addition of the best accounting, finance, sales,
marketing, legal and engineering professionals with extensive experience and success in their respective
professional careers. Several of the CLIs key executives have had prior experience in reputable companies
from related industries such as real estate development, construction, power, banking, business process
outsourcing, consulting and others.

CLI has recently relaunched its brand with the tagline We Build With You in Mind. This captures the
customer-centric focus the Company has adopted since its incorporation in 2003 and shows how CLI personnel
perform in every phase of the development cycle. CLIs customer-centric initiatives include the creation of a
separate customer care department that facilitates unit turnover. Moreover, the customer care department
extends its service post-turnover by helping the buyers process titles to the property and ensure the payment of
real property taxes on the unit.

Socially responsible development

CLI believes in responsible planning and development. Wherever the Company develops, community and
infrastructure improvements are an integral part of the development plans. CLI has partnerships with various
barangays, LGUs and institutions including Habitat for Humanity.

For partnerships with barangays, a fine example is the community improvements done in Barangay Lahug,
Cebu City as part of its Mivesa Garden Residences project. As its gesture of goodwill for the barangay and its
constituents, the Company upgraded various barangay infrastructures including the widening of the Salvador
Ext. barangay road, installation of new drainage lines, and the construction of a three-storey public market in
2013. The previous market was located along the sidewalk, so the developer provided a more permanent,
hygienic and secure facility. This was received well by the local community, and serves as a testament that
private development can also generate good social impact.

For its partnership with Habitat for Humanity (Habitat), CLI has partnered with Habitat for the Guadalupe
Habitat Pinamalayan Socialized Housing Project where CLI served as the developer of over 337 socialized
housing units. Aside from this, CLI has generously contributed to the Habitat Bohol Rebuild Program in 2015,
a program that aimed to rebuild over 8,000 homes affected by the October 2013 earthquake.

For its partnership with PBSP, CLIs current tree planting program with Philippine Business for Social
Progress (PBSB) includes over 108,000 seedlings encompassing over 43 hectares. CLI continues to partner
with PBSP as part of its responsible compliance to ECC requirements for its growing number of projects.

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CLI is also an advocate of green building standards, and several of its projects incorporate important green
building and environmentally friendly features. Recently, its Latitude Corporate Center office project was
registered under BERDE, the Philippines green building rating system that aims to promote sustainable design
and operations.

Strategic joint venture partnerships

CLI takes pride in its ability to collaborate with its joint venture partners. CLI is the project manager and
developer in all its joint ventures. These joint ventures have enabled the Company to position itself in strategic
locations like Cebu Business Park through BL CBP Ventures, Inc., and Cebu IT Park through El Camino
Developers Cebu, Inc. Collaborating with a joint venture partner also enabled the Company to enter into new
markets such as Davao. In partnership with Yuson, the Company newly-launched its MesaTierra Garden
Residences project and added two projects in Davao to the Companys pipeline.

The Companys successful JV partnerships in its past and present projects show that CLI is a preferred JV
partner because of the priority it gives to its partners, transparency in terms of project planning and accounting,
and its quick execution and delivery of the project. For example, the Company was able to progress its 38 Park
Avenue at the Cebu IT Park which is a joint venture with El Camino, from acquisition to pre-selling in just six
months. This fast business development cycle makes the Company attractive to its current and future JV
partners.

Financial strength: strong profitability and healthy margins

The Company has consistently demonstrated strong profitability throughout the years. CLIs gross profits and
net income are steadily increasing year on year at healthy margins, showing that it has strong fundamentals and
that the quality of its earnings is above par.

For the three years ended December 31, 2014, 2015 and 2016, CLIs revenues amounted to 1.283 billion
1.545 billion and 2.178 billion, respectively. CLI has grown steadily in recent years, with net income
increasing from 433.54 million in 2014 to 702 .32 million in 2016, representing a CAGR of 27.28% during
that period. The Companys EBITDA for the three years ended December 31, 2014, 2015 and 2016 stood at
500.32 million, 631.02 million, and 897.94 million, respectively, with EBITDA margins at 39%, 41% and
40%, respectively. Net income for 2016 was P702.32 million, an increase of 30.75% from 2015. Net income
for 2015 was P537.17 million, an increase of 23.90% from 2014. Net income for 2014 was P433.55 million.

The Company also prides itself in its cost discipline. While CLI hires contractors for its projects, it purchases
its own raw materials to ensure that the quality and cost are according to the Companys specifications.

Moreover, among its key business processes, CLI has one of the most disciplined and responsive accounts
receivable monitoring teams in the industry. Its delinquency rate averages at a low 1.5% to 3% and this can be
attributed to CLIs proactive approach in managing its accounts receivable. Of delinquent accounts, only less
than 1% ends up in cancellations, as the Companys accounts receivable team works closely with the sales and
marketing team to ensure that the Companys customers accounts get updated.

Operational excellence

CLI has a fully-integrated real estate set-up encompassing different areas, namely, acquisitions, business
development, technical planning, engineering and project management, sales and marketing, documentation
and licensing, legal, customer care and property management. The Company prides itself on its hands-on and
personalized approach, which allows itself to respond effectively to its clients and industry partners.

Construction

For each horizontal and vertical development, CLI engages various general and specialty contractors with both
local and national experience. With over 50 engineers in its roster, CLI handles the project and construction
management aspect of every project, and manages the various contractors and sub-contractors that are utilized.

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By serving as the project manager of its projects, CLI is able to meticulously strive to deliver its projects on-
time and with utmost quality and professionalism. To date, CLI does not engage in in-house construction, but
the Company recognizes this as a potential growth area as it continues to expand its portfolio.

Sales

CLI has one of the industry-leading sales support teams. With over 30 sales support personnel, this team
collaborates, coordinates and supports the over 5,000-strong accredited broker/agent network of CLI. This is
CLIs strategy in working harmoniously with the seller community by assisting the brokers 24/7 from sales
origination to closing. CLI then works alongside brokers in addressing the client inquiries until closing.

KEY STRATEGIES

Expansion to key cities in the Visayas and Mindanao

In 2015, CLI embarked on its regional expansion when it launched MesaVerte Residences in CDO. This is the
mid-market condominium offering of CLI with three 15-storey residential towers having a total of 686 units. In
less than a year of pre-selling, Phase 1 of the project was already 90% sold. This mid-market format of CLI
proved to be very successful in Cebu with its sold-out Midori Residences project and Mivesa Garden
Residences project. The latter is widely recognized as the fastest selling condominium project in Cebu when its
Phase 1 sold out in just three months.

With its hub in Cebu, CLI envisions to have the most responsive development set-up in the VisMin. CLIs key
to success in Cebu is its very personalized approach, thus, the Company endeavors to maintain this agility even
as it ventures into new cities. In CDO, the Company has already set-up separate sales, administrative and
engineering office. The Company finds a unique advantage in being homegrown, as it can distinguish itself
further in these new regional markets with similar local dynamics as Cebu.

In September 2016, CLI successfully announced its arrival in Davao. With Yuson, its joint venture partner in
Davao, three projects were added to the Companys pipeline. The projects include CLIs popular mid-market
condominium format, the Davao version of which will feature a 22-storey residential condominium on E.
Jacinto Street, near the Central Bank of the Philippines - Davao office. It will be followed by a 1.9-hectare
riverside mixed-use project along McArthur Highway and another major mixed-use lifestyle project in a four-
hectare property in Times Beach, Matina.

CLI intends to capitalize further on its mid-market residential condominium and economic housing formats in
other locations in the VisMin. The Company has recently acquired a six-hectare property in Sibulan,
Dumaguete where it will build its economic housing development, Casa Mira Coast. CLI is now positioning in
Bacolod and Iloilo as it prepares to roll out its Casa Mira brands in those areas.

Building recurring income developments

As CLI sets its sights on a long-term growth trajectory, the Company is committed to growing its recurring
income portfolio. In 2013, CLI launched its first office building in Cebu IT Park. The project, Park Centrale
Tower, was designed to host both BPO and executive offices (office condominium units). With its Grade A
design and features, Park Centrale Tower was awarded as the Best Commercial Development in Cebu in the
2014 Philippines Property Awards.

In October 2015, CLI made another significant step in growing its recurring income portfolio when it launched
phase 1 of Base Line Center, a redevelopment of one of the largest remaining properties in the prime midtown
Cebu area.

CLIs current recurring income assets include BPO floor space, executive office space, residential units, and
various commercial and retail units in its condominium projects. These assets are now delivering an annual
lease income to CLI of close to P50 million with their combined net leasable area of 6,200 sq.m.

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With the completion in 2019 of its Base Line Center (Phase 1), a mixed-use development that which will
feature Citadines Cebu City, prime office floors and commercial spaces, and CLIs newly launched Latitude
Corporate Center, a Grade A office tower with a GFA of 35,000 sq.m., the Company expects to increase its
annual recurring income to an estimated P120 million by 2019.

This will be boosted by its robust commercial developments in the pipeline, which includes over 3,000 sq.m. of
prime retail space in its Cebu IT Park mixed-use development. Aside from 38 Park Avenue at the Cebu IT
Park, a 38-storey high-end residential condominium, this 1.17-hectare site will also feature Park Avenue
Corporate Center, a Grade A office building with over 20,000 sq.m. of leasable area. This will be closely
followed by the launch of its mixed-use project, AS Fortuna Center Mandaue, a one-hectare site that will
include a boutique mall, hotel, office and residential tower. This will add over 30,000 sq.m. of gross leasable
area to the Company.

Vertical integration property management and construction

CLI is preparing to set-up its own property management company for both its vertical and horizontal projects.
Currently, the Company serves as property manager for its horizontal projects. On the other hand, its vertical
projects are managed by third party providers, Colliers International Philippines and CBRE. It is the
Companys goal to have its own property management affiliate by the end of 2017. The goal is for this affiliate
to become a self-sustaining and revenue generating business unit.

In the medium-term, the Company is also studying the potential of setting-up an in-house construction arm.
CLI takes pride in its growing project and construction management team, which manages the various
contractors that the Company employs. Nevertheless, CLI may need to reinforce its expansion plans with an in-
house construction arm in order to better manage time, cost and manpower.

Growth of economic housing brand (Casa Mira)

As of December 2016, CLI has four Casa Mira projects under development and in the pipeline: (1) Casa Mira
Linao, (2) Casa Mira Towers Labangon, (3) Casa Mira South, and (4) Casa Mira Coast. Two more Casa Mira
projects, Casa Mira Bacolod and Iloilo will be added to the list in 2017. The Company intends to grow Casa
Mira as its economic housing brand as an answer to the unserved demand in the economic housing sector,
where unit prices range from P800,000 to P1.7 million. Correspondingly, the monthly amortizations range from
as low as P6,000 to as high as P10,000. Thus, this caters to households with monthly incomes of P15,000 to
P30,000. The Company sees this as a great opportunity to tap into the class B, C and D markets where a
majority of the working population belongs. With the Philippines young and growing workforce, the need for
affordable permanent housing options will continue to escalate.

For CLI, it has differentiated its economic housing approach further by locating its economic projects in well-
planned and desirable sites. While economic housing is normally associated with projects that lack access to
major roads or decent amenities, CLI takes a more customer-driven approach by developing economic projects
in better locations, with generous amenities and greater potential for value appreciation.

Capitalizing on pipeline projects

CLI has positioned itself for the next two years with key pipeline projects in Metro Cebu, and select locations
in VisMin. CLI intends to grow its current product offerings with new vertical residential and mixed-use
developments in Metro Cebu which are expected to generate revenues and recurring income for the Company.
CLI targets to replicate its success in Cebu as it introduces its economic housing format in Dumaguete, Bacolod
and Iloilo and its mixed-use developments in Davao.

Establish and leverage strategic partnerships, alliances joint ventures and cooperation

CLI will also continue to pursue local partnerships that will coincide with its expansion plans. The Company
has proven that strategic alliances can provide a winning formula for securing strategic locations and entering
new markets for as long as the joint ventures are executed using best practices. With its existing joint venture

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and associate companies such as BL CBP Ventures, Inc., El Camino Developers Cebu, Inc., Yuson Excellence
Soberano, Inc., CLI has both the expertise and experience to take on more local partnerships as it expands
across VisMin.

HISTORY

CLI was established in 2003 in Cebu City by a Cebuano entrepreneur, Jose R. Soberano III. Guided by sincere
family values, genuine real estate passion and unrelenting faith, Jose R. Soberano III has steered the Company
to become highly committed to its customers and community.

2003 This was the year when the Company was incorporated from humble beginnings by founder
Jose R. Soberano III. The initial motivation for its establishment was to provide for the
housing needs of his employees and the middle-income earners of other small to medium
companies. CLIs first residential subdivision, San Josemaria Village in Balamban, Cebu was
born. He started with two employees including himself, with him doing the hands-on selling
to the employees of industrial companies in the town of Balamban.

2007 CLI grew and developed a second San Josemaria Village in Minglanilla, Cebu offering the
same affordable mid-cost quality homes.

2009 The third San Josemaria Village was developed in the prospering town of Toledo, Cebu
bringing affordability and quality living closer to the needs of OFW families.

2010 CLI continued to prosper and launched its fourth San Josemaria Village in Talisay City
giving the city dwellers the chance to own and experience the Companys unique brand.

2010 CLI embarked on its first vertical project at the booming Cebu IT Park by launching its first
residential condominium, Asia Premier Residences. It is a significant milestone which
enabled the company to develop its vertical development expertise. The success of Asia
Premier Residences, as the first residential condominium at the Cebu IT Park, paved the way
for more vertical projects of CLI.

2011 Another feature property, the Base Line Residences, was built in one of Cebus landmark
district, Base Line Complex.

2011 In the same year another residential subdivision, Midori Plains, was launched in the southern
town of Minglanilla, Cebu with over 370 house and lot units.

2012 Following the success of Midori Plains, the twin-tower Midori Residences was launched in
the prime area of AS Fortuna, bridging the two cities of Cebu and Mandaue. A total of 396
condo units were developed.

2013 Park Centrale Tower was launched in one of Cebus prime lifestyle district, the Cebu IT Park.
This marked CLIs first venture into the office-condominium development as well as having
its second property development within the Cebu IT Park.

2013 Mivesa Garden Residences was launched. It is CLIs fifth mid-rise condominium development
and its sixth to 13th tower.

2013 CLI celebrated its ten year milestone with ten projects to date providing quality living
communities for Cebus mid-market.

2013 The 8.8-hectare Velmiro Heights was launched. This is another horizontal residential
development which is a step higher than previous projects, as it caters to the middle to upper-
mid markets offering high-end amenities and generous living spaces.

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 2014 Villa Casita, CLIs socialized housing brand, was launched in the western town of Balamban,
Cebu to cater to the low cost housing needs of the low-income market.

2014 Park Centrale Tower bagged the coveted Philippines Property Awards Best Commercial
Development Cebu. The award marked a significant milestone for the real estate industry in
Cebu and among the homegrown companies as CLI was the first Cebu-based developer to
win in the PPA.

2015 A major mixed-used development in the heart of midtown Cebu, Base Line Center, was
launched. This project will have over 100,000 GFA. The first phase includes the 180-room
hotel, Citadines Cebu City, which will be managed by Ascott, the worlds largest serviced
residence operator. Base Line Center will also include an upscale condominium called the
Base Line Premier, with prime office spaces housed inside the Base Line HQ, and retail
spaces.

2015 CLI celebrated another major milestone by launching its first project outside Cebu in the
booming CDO. The three-tower residential condominium complex, MesaVerte Residences,
was launched.

2015 CLI responded to the growing demand for economic housing by launching its economic
housing brand, Casa Mira. Casa Mira Linao, a 725-housing unit subdivision broke ground at
the start of 2015.

2016 CLI launched the vertical counterpart of its economic brand with the introduction of Casa
Mira Towers in Labangon. This economic condominium will have 686 residential units and
will rise on the site of CLIs old office.

2016 CLI moved its corporate headquarters to its award-winning office development, Park Centrale
Tower at the prestigious Cebu IT Park.

2016 Due to the growing demand for its Casa Mira brand, CLI embarked on its largest residential
project to date by launching Casa Mira South, a 30-hectare economic housing community in
Naga City and San Fernando, both in Cebu. With its campaign to provide More for the
Filipino Family, Casa Mira provides economic housing packages with high-end amenities.

Remaining true to its core values and faithful to its humble roots, CLI continues to grow exponentially by
building quality communities in strategic locations throughout Cebu with plans for more feature projects within
Cebu City and in the other regions.

CORPORATE REORGANIZATION

CLI undertook a general corporate reorganization in preparation for this Offer.

Prior to July 1, 2016, the Companys authorized capital stock was P1 billion divided into nine million Common
Shares and one million Preferred Shares, both with a par value of P100 each.

On July 1, 2016, for purposes of expansion and in order to meet the funding requirements of several new
projects and developments undertaken by the Company, the Board of Directors and the stockholders approved
the increase in the authorized capital stock of the Company from P1 billion divided into nine million Common
Shares and one million Preferred Shares with a par value of P100 per share, to P2.5 billion consisting of 2.4
billion Common Shares with a par value of P1 per Common Share and one billion Preferred Shares with a par
value of P0.10 per Preferred Share. The Company effectively decreased the par value of its Common and
Preferred Shares, both from P100 per share, to P1 per Common Share and to P0.10 per Preferred Share.

84
Out of such increase in the authorized capital stock, AB Soberano subscribed to 400 million newly-issued
Common Shares. Accordingly, the increase in the authorized capital stock resulted in a net infusion of fresh
and additional capital in the amount of P400 million.

On October 18, 2016, the Company filed an application with the SEC for such increase in its authorized capital
stock as described above, which was approved by the SEC on October 24, 2016.

On November 22, 2016, AB Soberano purchased 225 million Common Shares from each of Ma. Rosario B.
Soberano and Jose R. Soberano III, bringing its total shareholdings to 985,823,200 Common Shares or a
76.78% stake in the Company. AB Soberano then transferred one share each to independent directors Messrs.
Jesus N. Alcordo and Rufino Luis Manotok, and Ms. Ma. Aurora D. Geotina-Garcia.

As a result of the above-described transactions, CLIs corporate structure as of the date of this Prospectus is as
follows:

Subsidiary CLI Premier Hotels Intl, Inc.

(100%)

BL CBP Ventures, Inc.

ABSOBERANO HOLDINGS CORP.

(50%)
Joint Ventures

Yuson Excellence Soberano,

(76.78%)

CEBU Inc. (50%)

LANDMASTERS,
INC. Ming-Mori Development
Corporation
(19.87%)

Magspeak EcoTourism
(25%)1

El Camino Developers Cebu,

Inc.
Associates
(35%)

A.S. Fortuna Property

Ventures, Inc. (40%)

Mivesa Garden Residences,

Inc. (45%)

1
As of the date of the Prospectus, Mr. Jose R. Soberano, III has executed a Deed of Assignment in favor of CLI for his shares in Magspeak,
but the BIR Certificate of Registration of the shares is still being processed.

SUBSIDIARIES

The Companys newly incorporated subsidiary, CLI Premier Hotels Intl., Inc., is not yet operational and has no
revenue contribution as of date.

CLI Premier Hotels Intl., Inc.

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CLI Premier Hotels Intl., Inc., a wholly-owned subsidiary of the Company, was incorporated on August 26,
2016 to take charge of Citadines Cebu City and the Companys future hotel developments. Its principal office
address is at 10th Floor, Park Centrale Tower, J.M. Del Mar St., Cebu IT Park, Brgy. Apas, Cebu City.

JOINT VENTURES

BL CBP Ventures, Inc.

BL CBP Ventures, Inc. was incorporated on February 3, 2016 to develop Latitude Corporate Center, a 24-
storey office development at the Cebu Business Park. BL CBP Ventures, Inc. was a joint venture of the
Company and Borromeo Bros, Inc. Its principal office address is at AB Soberano Bldg., Salvador Ext.,
Labangon, Cebu City.

Yuson Excellence Soberano, Inc.

Yuson Excellence Soberano, Inc. was incorporated on December 15, 2016 to mark the Companys entry into
the Davao market. It is a joint venture between the Company and Yuson Comm. Investments Inc. to undertake
the development of MesaTierra Garden Residences, a 21-storey residential condominium, and two other
mixed-use projects in Davao City. It will also engage in real estate brokering to facilitate the marketing and
sale of the joint ventures developments in Davao. Its principal office address is at Suite A, 204 Plaza De Luisa
Complex, 140 R. Magsaysay Ave., Brgy. 30-C, 8000 Davao City.

ASSOCIATES

A.S. Fortuna Property Ventures, Inc.

A.S. Fortuna Property Ventures, Inc. was incorporated on March 9, 2017 to facilitate the acquisition of a 9,989-
sq.m. property along AS Fortuna Avenue for the development of the AS Fortuna Center Mandaue, a mixed-use
development in the AS Fortuna Mandaue area that will house a hotel, residential and office development and a
boutique mall. Its principal office is located 10 th Floor, Park Centrale Tower, Josemaria del Mar St., Cebu IT
Park, Brgy. Apas, Cebu City. CLI holds a 40% stake in the company.

EL Camino Developers Cebu, Inc.

EL Camino Developers Cebu, Inc. was incorporated on August 15, 2016 to acquire a 1.17-hectare property
inside the Cebu IT Park, and to develop (1) 38 Park Avenue at the Cebu IT Park, a 38-storey high-end
residential condominium, and (2) Park Avenue Corporate Center, a Grade A office building with over 20,000
sq.m. of leasable area. Its principal office address is at Base Line Center, Juana Osmea St., Brgy. Kamputhaw,
Cebu City. The Company has a 35% stake in El Camino Developers Cebu, Inc.

Magspeak Nature Park, Inc.

Magspeak Nature Park, Inc. was incorporated on October 21, 2011 to acquire, lease and develop lands into
nature and eco-tourism parks, and to manage and operate the same. Magspeak plans to develop a 30-hectare
outdoor leisure park and conference center to be launched in 2017 in Mt. Manunggal, the highest mountain in
Cebu. CLI holds a [25%]19 stake in Magspeak.

Ming-Mori Development Corporation

Ming-Mori Development Corporation was incorporated on August 1, 2013 to undertake and execute land
reclamation projects, submit bids and accept awards for reclamation projects, and manage, hold and sell

19
As of the date of the Prospectus, Mr. Jose R. Soberano, III has executed a Deed of Assignment in favor of CLI for his
shares in Magspeak, but the BIR Certificate of Registration of the shares is still being processed.

86
reclaimed land and other real property. Ming-Mori Development Corporation is the private consortium that has
proposed to undertake the Ming-Mori Reclamation Project of the Municipality of Minglanilla, which involves
the development of the Minglanilla TechnoBusiness Hub, a 100-hectare techno-business park in the
progressive town of Minglanilla, a mere 30 minutes away from Cebu City. The Company has subscribed to
19.87% in Ming-Mori Development Corporation, which is pending before the SEC.

Mivesa Garden Residences, Inc.

Mivesa Garden Residences, Inc. was incorporated on March 13, 2017 to develop Towers 6 and 7 (Phase 3) of
Mivesa Garden Residences, a real property development project located on a 3,000-sq.m. property to be
registered in the companys name. Its principal office is located 10th Floor, Park Centrale Tower, Josemaria del
Mar St., Cebu IT Park, Brgy. Apas, Cebu City. CLI holds a 45% stake in the company.

DISTRIBUTION METHODS OF PRODUCTS AND SERVICES

Development activities

The Company designs and develops its products on a per project basis. Each project design is unique,
depending on the type of development, location, soil conditions, size and other factors. The amount spent on
such development activities are accounted for under cost of sales and rental of the Company's financial
statements. See discussions under Summary of Financial and Operating Information.

Development costs accounted for P578.3 million (45%), P671.83 million (43%), and P1.01 billion (47%) of the
Companys revenues in 2014, 2015 and 2016, respectively.

Marketing and sales

CLI has one of the industry-leading sales support teams in VisMin. The Companys over 30 sales support
personnel collaborate, coordinate and support CLIs more than 5,000-strong accredited broker/agent network.
This is CLIs strategy of working harmoniously with the seller community by assisting the brokers 24/7, from
sales origination to closing. CLI works alongside brokers in facilitating client inquiries until sales closing,
documentation, monitoring and turnover.

The Company has also pioneered various incentive programs for its sellers. This has paved the way for multiple
and repeat selling efforts from individual sellers and brokerages. CLI consistently rewards its broker partners as
a way of maintaining a steadfast partnership with them.

CLIs sales support team is based in the corporate headquarters, but are able to reach the Companys broker
partners by conducting regular trainings and workshops for the broker partners in the CLI office or in the
offices of the accredited brokerages. CLI exerts all marketing efforts to reach its target clientele, with
marketing activities like launches, exhibits, promos, open houses, and regional and international roadshows.

The Company has been successful in several pre-launches, as it is able to move from acquisition, design and
marketing in a very timely fashion. Several of its pre-selling launches have gotten tremendous sales
performance. Several of its projects have sold-out even without a showroom due to the win-win packaging it
offers to both buyers and sellers. These sold-out projects include Asia Premier Residences, Base Line
Residences, Casa Mira Linao and Velmiro Heights (Phase 1).

CLI has also relaunched its corporate brand in 2016 with its tagline We Build with You in Mind. The new
tagline communicates the hands-on nature of CLIs entire team, with special attention given to all new and
existing buyers throughout the sales cycle.

Credit and collection

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Credit and collection functions are assigned to the A/R Section and Treasury Section under Accounting and
Finance Department of the Company. This group is responsible for collecting equity payments, move-in fees,
management fees and rental income payments.

CLI has a Documentation Section responsible for helping buyers obtain bank and Pag-IBIG financing for the
80%-85% balance on their units. To ensure approval of their loans, the Documentation Section pre-qualifies
buyers with several banks and help them prepare the required documents for approval, such as proof of
financial capacity. As an added service, the team also scouts for the best available bank rates and, when
necessary, advises buyers to update and/or upgrade their contributions to qualify for Pag-IBIG housing loan.

The Companys equity payment terms vary from one project to another, but usually have a minimum payment
period of 24 months. Buyers are required to pay a reservation fee ranging from P10,000 to P50,000 upon
signing the Reservation Agreement Form which is non-refundable. The first monthly equity payment
immediately starts 30 days after making the reservation. All equity payments are covered by post-dated checks.
For buyers who opt to pay spot cash, a discount ranging from 5% to 8% is granted.

Upon full collection of the total contract price, the A/R Section bills move-in fees and only upon its full
payment does it issue an Authority to Move-In. CLI also bills rental income and management fees and collects
the same usually within 30 days from billing.

SUPPLIERS

CLI sources construction materials and services from third party suppliers and service providers both in the
local and national level who meet the Companys strict quality standards through a pre-qualification and a
bidding process. There is no shortage of raw materials or services that the Company needs for its day-to-day
business as these are readily available in the market. Hence, the CLI is not dependent on any single supplier or
service provider.

Through its purchasing team, evaluates suppliers who can provide the best value at the highest quality with the
least cost, can guarantee safe and on time deliveries, and have the capacity to improve and innovate to meet the
Company's requirements. At the same time, the Company has the necessary internal controls, organizational
structure and financial viability to assure the continuous delivery of the raw materials by the supplier.

The Company engages contractors to undertake land development and construction on a per project basis.
While the Company mostly outsources architectural and engineering services for its projects, this year, CLI has
started doing engineering and design in-house.

The following are the Companys top five suppliers:

Supplier Product / Service

Dakay Construction & Development Corp. General contractor
Kevlar Development Corporation General contractor
UKC Builders, Inc. General contractor
Vic Enterprises Cement and rebars
J.E. Abraham C. Lee Construction General contractor

In the next 12 months, the Company will consider opportunities for improvement to strengthen vendor
management such as accreditation of quality suppliers and improved procurement practices.

CUSTOMERS

CLI caters to several real estate categories residential, commercial/offices and hospitality. Among the three
categories, the Companys experience in the industry has been primarily focused on residential development
which comprises 80% of total current projects.

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Of the Companys residential developments, 38% of CLIs horizontal and vertical projects serve the need of
the mid-market. Fast-selling projects like Midori Residences, Midori Plains, Velmiro Heights, Mivesa
Residences, and MesaVerte Garden Residences show the growing demand of the mid-market for new, well-
built, well-planned and strategically located homes. CLIs mid-market clients are those who can afford a
monthly equity payment of P5,000 to P10,000 and an annual income of P300,000 to P800,000. The Company
also caters to a small portion belonging to the upper-mid market segment who can afford a monthly equity of
P10,000 to P15,000 and earning P1 million to P3 million annually. These mid-market segments prefer units at a
price range of P900,000 to P3 million.

CLIs biggest product offering is economic housing through the Casa Mira brand comprising 44% of the
Companys total revenues from its residential projects. High-end residential developments are at 16%, with
successful projects such as Asia Premier Residences, Base Line Residences, Base Line Premier and 38 Park
Avenue at the Cebu IT Park. Socialized housing comprises only 2% of the Companys residential projects, with
two projects to date.

OFWs comprise a substantial segment of the Companys customers for its horizontal residential units with 60-
70% of the Companys sales coming from OFWs.

As of the date of the prospectus, the following table summarizes the Companys customer demographics.

EMPLOYMENT MARITAL
% CITIZENSHIP % %
PROFILE STATUS
Local 42% Filipino 95% Married 60%
OFW 39%* Foreigner 5.0% Single 39%
Self-employed 10% Other 1%
Entrepreneur 5%
Others 4%

*The percentage is based on total customer demographics as compared to the 60-70% figure above which is based on
horizontal residential units sold.

For its leasing business, the Companys top lessees include a BPO company, a service provider and food
establishments.

CLI is committed to continuously address the growing needs and demand of the market in each segment the
Company caters to. CLI aims to constantly innovate, and remain consistent with the quality of the
developments, the selection of location and the hands-on service that goes along with it.

Customer service and warranties

CLI commits to provide customers products and services that conform exactly to stated or agreed
specifications, and also meet the needs and expectations of those customers. Prior to unit turnover, the
Company ensures that quality control check is performed to establish the fact of its readiness and defect-free
condition. In cases where there are issues arising after turnover, CLI responds to the customer concerns or
complaints and facilitates a resolution that is done expeditiously by the concerned department.

Aside from the warranties provided under the law, the Companys contractors provide a one-year warranty for
construction and related defects which covers flaws in workmanship, materials and quality.

Between the Company and its buyers, the Company gives a one-year workmanship warranty which covers any
architectural, engineering, finishing flaws or defects in the materials used. The Company also requires and
assists buyers to adopt regular maintenance measures such as periodic check-ups of electrical system and other
similar measures which may be necessary to preserve the integrity of their units.

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COMPETITION

CLI is within the playing field of top national players and local developers across its product range. The
Company goes head to head with national players such as Amaia Land Corporation, Avida Land Corporation,
and Alveo Land Corporation, all of which are subsidiaries of Ayala Land, Inc., Filinvest Land Inc., Megaworld
Corporation, Rockwell Land Corporation, 8990 Holdings, and Hongkong Land which is in partnership with the
local developer, Taft Properties.

The Company also competes with established local developers in Cebu, and other parts of VisMin, like Primary
Group of Builders which has 25 years of experience in the industry, AboitizLand with 22 years, Johndorf with
over 30 years, and Taft Properties with 20 years.

In Cebu, the Companys direct competitor is Primary Group which also offers the same product range in terms
of house and lot offerings, condominium units, offices and commercial spaces in Cebu, Dumaguete and Bohol.

CLI commands an 11% market share in terms of the total supply of condominium units in Metro Cebu, second
to Ayala Land, Inc. (17%) and followed by Filinvest Land Inc. (8%) 20. In terms of the number of condominium
units sold, the Company has a 9% market share, second to Ayala Land, Inc. (17%) and tied with Filinvest Land
Inc. (9%)21. For the current housing market, CLI ranks among the top three Cebu players with a 10% market
share.22 Among Cebu-based local developers, CLI is already the number one local housing developer in Metro
Cebu just in a span of 12 years.

To leverage itself against competition, CLI draws its advantage on its core strengths its hands-on
personalized service, local (i.e., Visayas and Mindanao) real estate expertise, stringent location selection, and
responsible development as well as in its aggressiveness, speed to market and best value projects.

PROPERTY AND EQUIPMENT

Landbank and other properties

The Companys landholdings are strategically maintained to ensure that it has sufficient land to cover its
current and future development requirements. The Company has invested in properties situated in prime
locations in the Visayas and Mindanao for its existing vertical and horizontal projects and those in the pipeline
for the next five years. Most of these projects are strategically located to enjoy easy access to major public
roads and other infrastructures.

As of December 31, 2016, the Company has a land inventory of approximately [630,824 sq.m.] for the
development of its various residential, commercial and mixed-used projects.

Aside from land, the Company also owns buildings, office equipment, transportation equipment, furniture and
fixtures and leasehold improvements that are not intended for sale or are held as investment property.

For a detailed discussion of the Companys land inventory and other real and personal properties, please see the
section on Description of Properties.

EMPLOYEES

As of the date of this Prospectus, the Company has a total of 166 employees, broken down per department as
follows:

20
Id., p. 56.
21
Id., p. 64.
22
Id, p. 65.

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 Number of
Department Employees
Sales and Customer Care 26
Marketing 7
HR and Admin 11
Accounting and Finance 30
Business Development 9
Documentation, Legal, Permits and Licenses 23
Purchasing 9
Property Management 8
Engineering 39
Internal Auditor 1
Top Management 3
Total 166

Subject to any changing needs of the business, the Company anticipates hiring a small number of additional
employees within the next 12 months. Furthermore, the employees of the Company are not covered by any
collective bargaining agreement between the Company and its employees nor part of any labor union. The
Company complies with occupational requirements such as minimum compensation and benefits standards,
child-free labor and other employment practices.

INTELLECTUAL PROPERTY

The Companys business is not dependent on any copyright, patent, trademark, license, franchise, concession
or royalty agreement. However, CLI believes that the registration of the Companys trademarks, tradenames
and brands will help establish name recall and recognition in the market and build brand equity, which will
eventually contribute to the success of CLIs projects and those of its affiliates.

CLI has filed applications to register the following trademarks:

Name of Trademark Illustration Registration Expiry Date

Cebu Landmasters Application Number: Pending
42016503726 application
approval
Application Date:
July 27, 2016

Casa Mira Application Number: Pending

42016503727 application
approval
Application Date:
July 27, 2016

Base Line Center Application Number: Pending

4201600503728 application
approval
Application Date:
July 27, 2016

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Latitude Corporate Application Number: Pending
Center 42016505104 application
approval
Application Date:
October 5, 2016

HEALTH AND SAFETY

CLI is compliant with all applicable national and local health and safety laws and regulations such as those
imposed by the Department of Labor and Employment and the local government units where the Company is
operating. CLI also imposes the same level of compliance on the contractors of its projects.

The Company has a Crisis Management Plan that outlines preventive measures and recovery systems during a
crisis or emergency, and mandates the creation of Crisis Management Team (CMT) composed of senior
managers appointed by the Chief Executive Officer. The CMT is tasked to closely coordinate with management
to ensure timely and appropriate responses and actions to mitigate or eliminate catastrophic consequences
during crisis.

As of the date of this Prospectus, CLI is not aware of any penalties imposed on the Company for any breach of
any existing health and safety laws or regulations.

ENVIRONMENTAL COMPLIANCE AND PROTECTION

CLI is subject to Philippine national and local environmental laws and regulations governing air pollution,
noise emissions, hazardous substances, water and waste discharge and other environmental matters issued by
national, provincial and municipal government and authorities. For its property developments, the Company is
required to carry out environmental assessments and submit environmental impact assessment documents to the
relevant government authorities for approval before any land development or construction is commenced. CLI
has consistently obtained the relevant government approvals and submitted the necessary environmental impact
assessment documents for its projects.

The Companys green building project, Latitude Corporate Center, is registered with BERDE and aims for a
three-star BERDE certification.

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MATERIAL AGREEMENTS

The Company has entered into the following contracts which may be considered material.

Joint ventures

The Company has entered into a joint venture partnership with R D A K Land, Inc., Triple K Holdings, Inc.
and RKD Property Holdings, Inc. for the incorporation of Mivesa Garden Residences, Inc., the entity intended
to develop Mivesa Garden Residences Towers 6 and 7 (Phase 3), a real property development project on CLIs
3,000 sq.m. parcel of land in Salinas, Lahug, Cebu City.

The Company has also entered into a separate joint venture partnership with R D A K Land, Inc., Triple K
Holdings, Inc., RKD Property Holdings, Inc. and J R Young Holdings Inc. for the incorporation of A.S.
Fortuna Property Ventures, Inc., the entity intended to develop the 9,989 sq.m. property along AS Fortuna
Avenue, a bustling business and residential corridor located in Mandaue City, Cebu, as a mixed use project
with a boutique mall, residential, office, and commercial component.

The Company also has agreements involving BL CBP Ventures, Inc. with Borromeo Bros. Estate Inc. for the
Latitude Corporate Center, Yuson Excellence Soberano, Inc. (with Yuson Comm. Investments, Inc.) for the
MesaTierra Residences, El Camino Developers Cebu, Inc. for 38 Park Avenue at the Cebu IT Park.

Construction Contracts

The Company entered into a construction contract dated July 8, 2016 with JE Abraham Lee Construction and
Development (ACLI), Inc., as contractor, for the general construction works in Casa Mira Towers (Towers 1
and 2) located at Salvador Extension, Labangon, Cebu City. The contract price is P264 million with 15% of the
purchase price or P36.6 million as downpayment, with the remaining balance to be billed on progress billing
with 10% retention. The contractor agrees to perform and complete all works set in the contract for a period of
24 months with an additional two calendar months for punch-listing and rectification works.

The general construction works in MesaVerte Residences (Towers 1 and 2) located at Corrales and Osmena
Streets, CDO is covered by a construction contract dated July 11, 2016 with Dakay Construction and
Development Corporation, as contractor, thereof. The contract price is P169.8 million with a downpayment of
15% of the purchase price or P25.47 million, with remaining balance to be billed on progress billing with 10%
retention. The construction should last for 18 calendar months, with additional calendar months for punch-
listing and rectification works.

CLI also entered into a construction contract with Kevlar Development Corporation, as contractor, to
implement the building of 100 houses in Velmiro Heights located at Tunghaan, Minglanilla, Cebu City. The
amount of the contract is P50.6 million with a downpayment of 20% of the purchase price equivalent to P10.12
million. Under the contract, the construction commenced on July 22, 2015 with a target completion on
February 22, 2016.

Lease Contracts

Various units in Park Centrale Tower building are leased by the Company for various uses such as office space,
convenience store outlets or restaurants. The terms of the lease contract range from three to six years, subject to
renewal upon mutual consent of the parties.

The Company is also leasing out residential units in Midori Residences and Base Line Residences. The term is
usually one year each for Midori Residences and six months for Base Line Residences, unless extended or
renewed. CLI also rented out retail spaces at Mivesa Garden Residences Building 1 for a term of three to five
years unless extended by mutual consent of the parties. The Company also rented out units in Asia Premier
Residences for commercial and residential use for terms of six months, one year or five years.

93
These lease contracts usually have an escalation clause of five percent to seven percent beginning on the
second or third year of the lease agreement.

The Company also leased out parking slots in Park Centrale Tower, Asia Premier Residences and Midori
Residences. The term for the lease of parking slots is generally for one year, unless renewed or extended by
mutual consent of the parties.

Financing Agreements

The Company entered into various loan agreements with BPI, China Bank, PNB, BDO and Metrobank in order
to finance construction projects and refinance existing loans.

CLI has real estate mortgages covering two credit facilities with BPI in the amounts of P550 million and P14
million. These real estate mortgages may be foreclosed upon failure to pay the indebtedness and failure to
perform the conditions therein. CLI also executed loan agreements with BPI on December 9, 2014 and July 14,
2015 in the amount of P1 billion for a term of ten years and payable in quarterly installments, and P200 million
for a term of four years and payable in eight quarterly installments. As part of the loan covenants, CLI cannot
declare cash dividends if there is an event of default, or if the payment of such dividends would affect the
companys financial condition.

The Company has a loan line for P50 million available by way of short term promissory notes with interest at
prevailing market rates, and a domestic bills purchased line for P10 million with China Bank, effective until
July 31, 2017. These facilities are secured by a mix real estate mortgages on properties and improvements
along Salinas Drive Extension, Lahug, Cebu City, and surety agreements with Spouses Jose R. Soberano III
and Ma. Rosario Soberano as sureties.

CLI also executed a loan agreement on December 16, 2013 for the principal amount of P300 million for a term
of seven years to partially finance the three of the seven condominium buildings of Mivesa Garden Residences
in Lahug, Cebu City. This loan is secured by way of real estate mortgages, one of which also secures a loan
agreement dated September 23, 2014 with the principal amount of P200 million for a term of five years.
Another lot also secures the loan to the extent of P150 million. There is also a surety agreement to the extent of
P560 million executed by the Company as principal with Spouses Jose R. Soberano III and Ma. Rosario
Soberano as sureties.

The Company also has a loan agreement with Metrobank for P300 million to partially finance the construction
of an 18-storey condominium and commercial building located at Cebu IT Park. The loan has a term of 10
years, payable on every interest payment date. It is secured by a real estate mortgage over a parcel of land along
JM Del Mar Street and Road 8 Cebu IT Park, Barangay Apas, Cebu City. Under this loan agreement, CLI
cannot declare or pay dividends to stockholders (other than the dividends payable solely in share of capital
stock) if payment of any sum due the bank is in arrears. CLI also executed real estate mortgages in favor of
Metrobank to secure the credit facilities in the amount of P300 million and P50 million in January 3, 2013.

PNB also agreed to grant the Company a revolving credit line for additional working capital and to finance the
development of Mivesa Garden Residences (Phase 1 and 2), in the amount of P200 million for a term of one
year, or until July 31, 2017. The Company also has a domestic purchase line for the same term in the amount of
P30 million. These credit facilities are both secured by suretyship whereby Spouses Jose R. Soberano III and
Ma. Rosario B. Soberano bound themselves to be solidary obligors of the company.

BDO likewise granted the Company various credit facilities to finance additional working capital requirements
consisting of a domestic bills purchase line of P10 million, an omnibus line of P100 million, and a credit line of
P2 million. The Company also availed of a short-term loan of P200 million from BDO, which is secured by
real estate mortgages over properties purchased by the Company situated in Naga City, and San Fernando,
Cebu.

Insurance

94
The Company has insured three units in Asia Premier Residence, IT Park, Lahug, Cebu City with MAPFRE
Insular for a term of one year, from May 28, 2016 to May 28, 2017. For more information on the insurance
coverage of the Company, please refer to Description of Properties Insurance on page [98] of the
Prospectus.

Other Material Agreements

CLI also entered into various deeds of absolute sales for the purchase of parcels of land in the Municipality of
San Fernando, Naga City in Cebu. Depending on the size of the lands purchased, the purchase price ranges
from around P2.8 million to around P42 million.

The Company has also entered into a Serviced Residence Management Agreement with Scott Philippines, Inc.
whereby the latter acts as the sole and exclusive manager to operate, manage, promote, market and maintain
Citadines Cebu City for and on behalf of the Company. Under this agreement, Scott Philippines, Inc. was
granted the right to assign or transfer any rights, benefits or obligations to any of its affiliates to be the party
and/or to perform the services under the agreement. The Company also engaged Ascott International
Management Pte. Ltd. as technical advisor whereby the latter is paid USD200,000 for the services rendered.

MATERIAL PERMITS AND LICENSES

Set out below are all of the major permits and licenses of the Company necessary to operate its business as
currently conducted, the failure to possess any of which would have a material adverse effect on the business
and operations of the Company23. The permits and licenses enumerated below include those for the Companys
projects that are under construction or for construction, while those for completed projects are excluded from
the list.

Based on the opinion issued by an independent counsel, Atty. Rene C. Abcede, Jr., and unless otherwise
indicated below, the material permits and licenses required for the Companys operations are valid and
subsisting.

General Permits

Head Office [and Branches]

License/ Permit
Name of Permit Issuing Agency Issue Date Expiry Date
No.
Certificate of Incorporation Securities and CS200321240 September 50 years from
Exchange Commission 26, 2003 date of
incorporation
Certificate of Registration Bureau of Internal 2RC0000083133 September n.a.
Revenue 12, 2003
Business Permit (2017) Local Government Unit 82314
(Renewal is
currently being
processed.)
Employer Data Form Home Development 2011-0575-0005 n.a.
Mutual Fund
Certificate of Registration Social Security System 06-1692314-4 n.a.

23
As the Company is a going concern, certain permits and licenses will be added to the list below as they are secured in the
ordinary course of business.

95
 PhilHealth Certificate of Philippine Health 201722300228 n.a.
Registration Insurance Corporation
PEZA Certificate of PEZA No.13-48 March 18,
Registration 2013
DOLE Certificate of DOLE TCFO-OSHS-074 December 22, December 22,
Compliance on Occupational (Renewal is 2014 2016
Safety & Health Standards currently being
addressed.)

Permits per project

The list only enumerates the permits and licenses presently held by the Company for its ongoing projects and
excludes the Companys permits and licenses for its completed projects.

Mivesa Garden Residences Phase 2

Expiry
Name of Permit Issuing Agency License/ Permit No. Issue Date
Date
BOI Certificate of DTI No. 2013-219 November 29, n.a.
Registration 2013
ECC DENR ECC-R07-1308-0187 August 22, 2013 n.a.

Certificate of Registration HLURB No. 26348 March 3, 2015 n.a.

License to Sell HLURB No. 029535 March 3, 2015 n.a.

Development Permit HLURB DP No. CVR-013- October 9, 2013 n.a.

0320
Business Permit 2016 Office of the Mayor, No. 82314C July 8, 2016 December
(Lessor) Cebu 31, 2016

Business Permit 2017 Office of the Mayor, No. 82314C For renewal
(Lessor) Cebu
Building Permit (Building 4) Office of the City Mayor BOI-2014-500-621 August 5, 2014 n.a.

Certificate of Occupancy* Office of the Building n.a. n.a. n.a.

(Building 4) Official
Building Permit (Building 5) Office of the City Mayor BOI-2014-500-620 August 5, 2014 n.a.

Certificate of Occupancy Office of the Building n.a. n.a. n.a.

(Building 5) Official

* Occupancy permits are only issued once the building is finished and livable (i.e. with running water, working fire
suppression systems, etc.). As of the date of the Prospectus, both Buildings 4 and 5 are still under construction.

Base Line Center

Base Line Center is a mixed-use development which includes three projects: Base Line Premier, Base Line HQ
and Citadines Cebu City. Since these three projects will be built on a single structure, certain permits are
common to the three projects.

Expiry
Name of Permit Issuing Agency License/ Permit No. Issue Date
Date

96
 ECC DENR ECC-R07-1508-0165 August 17, 2015 n.a.

Development Permit HLURB DP No. CVR-015- April 28, 2015 n.a.

0362

Building Permit Office of the City No. B01-2016-500- April 7, 2016 n.a.
Mayor, Cebu 384

Certificate of Registration HLURB No. 27615 July 4, 2016 n.a.

(Base Line HQ)

License to Sell (Base Line HQ HLURB No. 031038 July 4, 2016 n.a.
and Citadines)
Certificate of Registration HLURB No. 27614 July 4, 2016 n.a.
(Base Line Premier)

License to Sell (Base Line HLURB No. 031039 July 4, 2016 n.a.
Premier)

Casa Mira Towers Labangon

Expiry
Name of Permit Issuing Agency License/ Permit No. Issue Date
Date
BOI Certificate of DTI No. 2016-140 July 8, 2016
Registration
ECC DENR ECC-OL-R07-2016- January 5, 2016 n.a.
0003
Certificate of Registration HLURB COR No. 27668 December 22, n.a.
2016
License to Sell (Tower 1) HLURB LTS. No. 31099 December 22, n.a.
2016
License to Sell ( Tower 2) HLURB LTS. No. 31100 December 22, n.a.
2016
Development Permit HLURB DP No. CVR-015- October 26, n.a.
0381 2015

Building Permit (Towers 1 & DPWH No. BOI-2016-500- November 17, n.a.
2) 898 2016

MesaVerte Residences (Phase 1 Tower 1 & 2)

Expiry
Name of Permit Issuing Agency License/ Permit No. Issue Date
Date
BOI Certificate of DTI No. 2016-141 July 8, 2016 n.a.
Registration
ECC DENR ECC-R10-1506-0180 July 3, 2015 n.a.

Certificate of Registration HLURB No. 25357 April 1, 2016 n.a.

License to Sell HLURB No. 030278 April 1, 2016 n.a.

Development Permit HLURB DP No. REM-Condo- July 23, 2015 n.a.
15-002 (NMR 10)

Clearance to Mortgage HLURB n.a. April 5, 2016 n.a.

97
 Business Permit 2016 Office of the City No. 2016-15820 February 24, December
Mayor, CDO 2016 31, 2016

Business Permit 2017 Office of the City 201703097 January 11, December
Mayor, CDO 2017 31, 2017

Building Permit (Tower 1) Office of the City 00329-16-CLI-26-EI March 2, 2016 n.a.
Building Official,
CDO

Building Permit (Tower 2) Office of the City 00336-16-CLI-26&22- March 3, 2016 n.a.
Building Official, E1
CDO

MesaVerte Residences (Phase 2 Tower 3)

Expiry
Name of Permit Issuing Agency License/ Permit No. Issue Date
Date
ECC DENR ECC-R10-1506-0180 July 3, 2015 n.a.

License to Sell HLURB Temporary LTS : REM December 19, June 19,
TLS-16-001 2016 2017

Business Permit 2016 Office of the City No. 2016-15820 February 24, December
Mayor, CDO 2016 31, 2016
Business Permit 2017 Office of the City 201703097 January 11, December
Mayor, CDO 2017 31, 2017

Development Permit HLURB DP No. REM-Condo- August 5, 2015 n.a.

16-003 (NMR 10)

Casa Mira South (Phase 1)

Name of Permit Issuing Agency License/ Permit No. Issue Date Expiry
Date
ECC DENR ECC-RO7-1610-0017 December 9, 2016 n.a.

Casa Mira South (Phase 2)

ECC/CNC DENR ECC-RO7-1610-0017 December 9, 2016 n.a.

Casa Mira South (Phase 3)

ECC/CNC DENR ECC-RO7-1610-0017 December 9, 2016 n.a.

Mivesa Garden Residences (6 7) (Phase 3)

ECC/CNC DENR ECC-R07-1308-0187 August 22, 2013 n.a.

CBP Latitude Tower

98
Development Permit HLURB D.P. No. CVR-16-0410 November 17, 2016 n.a.
License to Sell HLURB Temporary LTS No. 0079 January 23, 2017 n.a.

Regular LTS- Ongoing

application

38 Park Avenue at the Cebu IT Park

Development Permit HLURB CVR-17-0416 February 2, 2017 n.a.

License to Sell HLURB Regular LTS- Ongoing n.a.
application

BOI Registration

The Company also has accredited a number of its projects with the BOI, which has allowed such projects to
generally enjoy certain tax incentives, subject to compliance with certain conditions. These tax incentives
include income tax holiday for three years (or four years for certain projects) from the actual start of
commercial operations or date of registration of the project, and zero duty importation of capital equipment,
spare parts and accessories for a period of five years from the date of registration of the project.

The BOI-registered projects include: Midori Plains, Midori Residences, Mivesa Garden Residences (Phase 1),
Mivesa Garden Residences (Phase 2), Casa Mira Linao, Casa Mira Towers, and MesaVerte Residences (Phase
1, Towers 1 and 2).

The Companys sales of low cost subdivision lots and housing units, with unit price between 450,000 and 3
million are currently not subject to corporate income tax.

As discussed however in the section on Risk Factors on page [24], there is no guarantee that the Companys
future development projects will be able to benefit from the income tax holiday benefits under the BOI, or that
accreditation to receive such benefit will not be delayed. The delay or absence of this income tax holiday on
any of the Companys future development projects could have an adverse effect on the Companys results of
operations.

99
 DESCRIPTION OF PROPERTIES

LAND INVENTORY

Using its location selection criteria, the Company, its joint ventures and associates (Company and its Related
Entities) have invested in properties located in strategic areas in VisMin which the Company and its Related
Entities believe to have high future appreciation potential for its existing and future development projects.

The table below enumerates the parcels of land owned by the Company and its Related Entities, as of the date
of this Prospectus. The list includes those parcels of land which have been conveyed to the Company and its
Related Entities by virtue of definitive agreements, the titles of which have not been transferred in the name of
the Company and its Related Entities until full payment of the purchase price. Please refer to the section on
Intended Acquisitions for details on the properties that the Company plans to acquire in the next 12 months.

Location Total Area Primary Land Registration of Title/

(in sq.m.) Use Ownership
1 AS Fortuna, Mandaue City 9,989 Mixed-Use To be registered under A.S. Fortuna
(Residential/ Property Ventures, Inc. (40%-owned
Commercial) by CLI)
2 Cebu IT Park, Apas, Lahug, 11,798 Mixed-Use Title to be registered in the name of
Cebu City (Residential/ El Camino Developers, Inc. (35%-
Commercial) owned by CLI)
3 Cebu Business Park, Ayala, 3,020 Commercial BL CBP Ventures, Inc. (50%-owned
Cebu City by CLI)
4 Guadalupe, Cebu City 4,494 Mixed-Use To be registered under the
(Residential/ Companys name
Commercial)
5 Casa Mira South, Naga-San 278,844 Residential 161,747 sq.m. already registered
Fernando, Cebu under Companys name

Remaining area to be registered under

Companys name
6 Base Line Center (Phase 1) 5,102 Condotel Company
7 Base Line Center (Phase 2) 5,074 Mixed-Use Company
(Residential/
Commercial)
8 Casa Mira Subdivision, Linao, 78,290 Mixed-Use Company
Minglanilla, Cebu (Residential/
Commertial)
9 Casa Mira Towers, Labangon, 3,681 Residential Company
Cebu City
10 MesaVerte Residences, 10,440 Residential Company
Cagayan de Oro City
11 Mivesa Garden Residences, 18,270 Residential Lot where Buildings 1 to 5 are
Lahug, Cebu City located comprising of 15,270 sq.m.
is already registered under the
Companys name

Lot where Buildings 6 to 7 are

located measuring 3,000 sq.m.:
Mivesa Garden Residences, Inc.
together with Item No. 1 (45%-owned
by CLI)
12 Upper Canitoan, Cagayan de 66,515 Residential To be registered under the
Oro City Companys name
13 Sibulan Bouffard Lot - 60,528 Residential To be registered under the
Dumaguete Companys name
14 E. Jacinto, Brgy. 11, 5,094 (out of Residential To be registered under Yuson
Poblacion, Davao City 5,273 sq.m.) Excellence Soberano, Inc. (50%-

100
 owned by CLI)
17 Velmiro Heights, Tunghaan, 69,685 Residential Company
Minglanilla, Cebu
Total 630,824

OTHER REAL PROPERTIES

In addition to its land inventory, the Company owns several other real properties, including available
commercial and retail spaces in its completed projects, which are currently used by the Company, or leased out
to third parties to generate recurring income. The details of these properties are set out below.

Among the projects with commercial spaces leased out to tenants are:

Project Location Type Total Area

Available for
Lease
(in sq.m.)
Asia Premier Residences Cebu IT Park, Apas, Lahug, Cebu City Commercial 286.98
Base Line Residences 1 Juana Osmea St., Brgy. Kamputhaw, Cebu Commercial 183.57
City
Midori Residences AS. Fortuna-Banilad, Mandaue City Commercial 12.00
Mivesa Garden Residences Lahug, Cebu City Commercial 186.27
Park Centrale Tower Cebu IT Park, Apas, Lahug, Cebu City Commercial 4,929.74
TOTAL 5,598.56

In addition, the Company also generates recurring income from its residential projects through lease of parking
spaces and company-owned residential units. The Company has available for lease a total of 75.45 sq.m. of
parking space, and a total of 574.42 sq.m of residential space. As of the date of this Prospectus, the Company
leases 75.45 sq.m of parking space, with a total annual lease of P248,340, and a 523.41 sq.m of residential
space, with a total annual lease of P4.53 million.

The Companys residential leases have an average term of one year, while the Companys commercial leases
have an average term of three to five years, both renewable upon mutual agreement of parties. Sixty days
notice is required from tenants for the extension or pre-termination of their leases, and a two-month security
deposit is paid at the commencement of the lease. The Company charges rent as either a fixed rent per sq. m.,
which may be subject to an escalation clause.

In its leases with its Related Entities, the Company observes arms length commercial terms and considers the
current rentals payable by tenants of the condominium units and parking slots that are operational at present
reflect prevailing market rents.

As of December 31, 2016, the Companys recurring income properties such as those used for leasing have a
total cost of P318 million with a book value of P297.66 million. Based on the appraisal reports of Colliers
International Philippines, Inc. dated October 17, 2016, the total fair value of the Companys recurring income
properties for 2016 is at P881 million.

OTHER ASSETS

Other properties of the Company comprise of the following:

Property and Equipment Cost Accumulated Book Value as of

(in ) Depreciation Dec. 31, 2016
(in ) (Unaudited)
(in )
Leasehold Improvement 2,305,994.00 642,817.00 1,663,177.00
Transportation Equipment 30,222,508.00 21,294,049.00 8,928,459.00

101
 Furniture and Fixtures 16,398,805.00 5,983,360.00 10,415,445.00
Office Equipment 40,368,231.00 6,788,583.00 33,579,648.00
Office Building 114,633,594.00 5,053,894.00 109,579,700.00
Total Property and Equipment 203,929,132.00 39,762,703.00 164,166,429.00
Computer Software 3,944,401.27 2,690,199.84 1,254,201.43
TOTAL 207,873,533.27 42,452,902.84 165,420,630.43

LEASED PROPERTIES

As of the date of this Prospectus, the Company has leased properties for use as office space and staff houses of
its employees with the details set out below:

Leased Property Description/Use Annual Lease Expiration of Renewal Option

(in ) Lease
Cagayan De Oro Staff House of CLI 242,000 February 20, 2016 Renewable at lessors
City (Apartment C) Employees to January 19, option with increased
2017 rate of 7%
Cagayan De Oro Staff House of CLI 168,000 September 25, Renewable at lessors
City (Apartment G) Employees 2016 to September option with increased
24, 2017 rate of 7%
TOTAL 410,000

The Company does not lease any land for development nor does it lease any land for its operations.]
Purpose Leased
MORTGAGE, LIENS AND ENCUMBRANCES

In pursuit of its business, the Company has entered into various mortgage agreements covering certain parcels
of land and improvements for the purposes of securing development loans or credit facilities extended by
financial institutions. The properties which are subject to real estate mortgages are:

Property Mortgagee
Location Area
(in sq.m.)
Barangay Kamputhaw, City of Cebu 3,215 BPI
Along J.M. Del Mar Street and Road Lot 8, Cebu 1,490 Metrobank
I.T. Park, Brgy. Apas, Cebu City
Salinas Drive Extension, Lahug, Cebu City 15,451 China Bank
Brgy. Tunghaan, Minglanilla, Cebu 69,684 BPI
Brgy. Labangon, Cebu City 3,681 BPI
Park Centrale Tower certain condominium units 5,771.91 Metrobank
Sergio Osmena Ext., Brgy. 22, CDO 8,605 Chinabank
Naga City and San Fernando, Cebu 174,416 BDO

Under Section 18 of Presidential Decree No. 57, no mortgage on any unit or lot shall be made by the owner or
developer without prior written approval of the HLURB. Accordingly, before the Company can mortgage
properties being used for its condominium or subdivision projects, it should ensure compliance with the said
law and its implementing regulations.

Properties of the Company and its Related Entities in which particular projects have been developed are also
subject to restrictions arising from the nature of such projects. For instance, certain properties over which a
condominium building project has been constructed would have restrictions annotated on the title of such
property arising from the Master Deed restrictions on the use of the property for condominium use.

102
Likewise, properties being leased by the Company are subject to typical lease-related limitations on usage, e.g.,
for office use only.

For a discussion on the loan obligations of the Company, please refer to Material Agreements on page [88] of
the Prospectus.

INTENDED ACQUISITIONS

The Company has intentions to acquire properties in the next 12 months in key locations in VisMin. Actual
acquisition is dependent on the outcome of negotiation with prospective sellers. These acquisitions are
expected to require additional capital expenditures, but the Company believes that it will have sufficient
financial resources for these requirements as it expects to use the proceeds from the Offer, [available loan lines
and partner-investors contributions] as a source of financing.

CLI intends to use approximately P[1.05] billion from the IPO proceeds to acquire and partially fund
development costs of the following VisMin projects:

Land Acquisition Intended Use Estimated Allocation Estimated Status

& Development (in ) Timing of
VisMin Disbursement
Davao City Residential [120,000,000] 2H 2017 Completed negotiation
but no payments made
Davao City Mixed-Use [300,000,000] 1H 2018 Completed negotiation
but no payments made
Bacolod City Mixed-Use [150,000,000] 2H 2017 Completed negotiation
but no payments made
Bacolod City Residential [120,000,000] 2H 2017 Under negotiation
Jaro, Iloilo Residential [60,000,000] 2H 2017 Under negotiation
Dumaguete City Residential [50,000,000] 2H 2017 Completed negotiation
with downpayment
Cagayan de Oro Residential [150,000,000] 2H 2017 Completed negotiation
with downpayment
Bohol Residential [100,000,000] 1H 2018 Ongoing site evaluation
Total [1,050,000,000]

CLI intends to use approximately P[910] million from the IPO proceeds to acquire and partially fund
development costs of the following Cebu projects:

Land Acquisition & Intended Use Estimated Estimated Status

Development - Cebu Allocation Timing of
(in ) Disbursement
Guadalupe, Cebu Residential [180,000,000] 2H 2017 Completed negotiation
with downpayment
Mactan, Cebu Hotel/Residential [400,000,000] 2H 2017 Ongoing site evaluation
Bogo City, Cebu Residential [30,000,000] 2H 2017 Under negotiation
Minglanilla/Talisay [300,000,000] 1H 2018 Ongoing site evaluation
Total [910,000,000]

INSURANCE

CLI procures insurance coverage required by relevant laws and regulations for its real and personal properties
and requires contractors to submit performance bonds, marine insurance policies, and other sureties for its
covered activities. Throughout the construction stage, the Company also maintains Contractors All-risk
Insurance for each of its projects, subject to customary deductibles and exclusions. For completed projects, CLI

103
also requires homeowners associations and condominium corporations to obtain fire and allied risks insurance
as part of the master deed for these projects.

104
 LEGAL PROCEEDINGS

As of date of this Prospectus, the Company and its subsidiary has not been a party to nor any of the Companys
properties have been subject to any pending material litigation, arbitration or other legal proceeding, and no
litigation or claim of material importance is known to the management and the directors to be threatened
against the Company or any of its properties.

105
 INDUSTRY OVERVIEW

This section (as well as other sections of this Prospectus) contain information extracted from a commissioned
report prepared by Santos Knight Frank on the real estate market in Cebu and certain key locations in Visayas
and Mindanao for inclusion in this Prospectus and such information reflects estimates of market conditions
based on publicly available sources and trade opinion surveys. For more details, please see the Real Estate
Industry Study dated September 16, 2016 annexed to this Prospectus. The extract below and the detailed study
conducted by Santos Knight Frank has not been independently verified by the Company, the Joint Lead
Underwriters or any other party involved in the Offer, and neither they nor Santos Knight Frank give any
representations as to its accuracy, among other matters, and the information should not be relied upon in
making, or refraining from making, any investment decision. The information set out in this section does not
purport to project the results of operations of the Company at present and for any future period or date.

Philippine macroeconomic indicators overview

The Philippine economy has performed well since the early 2000s, on the back of remittances from Overseas
Filipino Workers (OFW) and the booming Business Processing Outsourcing (BPO) industry, both of
which have a significant impact on consumer spending which accounts for about two-thirds of Gross Domestic
Product (GDP). The country has one of the fastest growing economies in the world, growing 7.6% in 2010,
7.2% in 2013, remained above 6% in the last four years and the economic outlook is positive.

Election spending propped up the economys performance in Q1 2016 as the country registered the fastest GDP
among Southeast Asian countries. The Philippines GDP grew 6.9% during the period and was above market
expectation. The biggest contributor to GDP growth was the services sector with 4.4 percentage points.

In terms of industrial origin, the services sector has remained the highest contributor to GDP growth. In fact,
the services sector recorded growth rates above 5% in the last six years. The low interest rate environment
empowered more consumers through bank loans which has given them additional purchasing power. The
spending has helped shore revenues for companies in car manufacturing/dealing, consumer products and the
real estate industry.

Table 1. Philippine Macro Economic Indicators

ECONOMIC INDICATORS 2011 2012 2013 2014 2015 2016F

Real GDP (% YoY) 3.6 6.8 7.2 6.1 5.8 6.3
Household consumption (%YoY) 5.7 6.6 5.7 5.4 6.2 5.9
Government consumption (%YoY) 2.1 15.5 7.7 1.8 9.4 10.3
Investment (%YoY) -1.9 10.8 12.2 6.8 14.0 11.2
Nominal GDP (PHP bn) 9,708.3 10,567.3 11,542.3 12,642.8 13,285.2 14,324.2
Nominal GDP (USD bn) 224.1 250.2 271.9 284.8 292.0 311.4
GDP per capita (USD) 2,366.6 2,598.7 2,780.8 2,866.6 2,893.8 3,039.9
Population (mn) 94.2 95.8 97.4 97.4 100.9 102.4
Unemployment (% end-year) 6.4 6.8 6.4 6.0 6.3 6.2
CPI (avg %YoY) 4.6 3.2 3.0 4.1 1.4 3.4
CPI (end-year %YoY) 4.2 3.0 4.1 2.4 1.5 2.7
Current Account (USD bn) 6.5 7.0 11.4 12.7 9.8 8.8
Net FDI (USD bn) 2.0 3.2 3.7 6.2 5.7 4.0
Current Account (%/GDP) 2.9 2.8 4.2 4.4 3.4 4.5
Net FDI (%/GDP) 0.9 1.3 1.4 2.2 2.0 1.4
Central bank policy rate (end-year %) 4.5 3.5 3.5 4.0 4.0 4.5

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Exchange rate end-year (USD/PHP) 43.9 41.2 44.4 44.6 47.2 47.5
Exchange rate average (USD/PHP) 43.3 42.2 42.4 44.4 45.5 46.0
Exchange rate end-year (EUR/PHP) 56.8 54.3 61.1 54.3 51.7 52.0
Exchange rate average (EUR/PHP) 60.3 54.2 56.4 59.0 50.5 51.0
Average bank lending rate (average 6.63 5.65 5.76 5.53 5.58 5.62
%)
91-days T-bill rates (average %) 1.37 1.58 0.32 1.24 1.77 1.11
182-days T-bill rates (average %) 1.69 1.76 0.48 1.61 1.93 1.34
364-days T-bill rates (average %) 2.26 1.97 0.72 1.79 2.077 1.53
5-year T-bond rate (end-year %) 4.21 3.70 2.91 3.33 3.93 3.39
7-year T-bond rate (end-year%) 5.08 4.15 3.55 3.90 4.59 4.01
PSEi (end-year) 4,372.0 5,812.7 5,889.8 7,230.6 6,952.1 7,300.0
Tourist Arrivals (%YoY) 11.3 9.1 9.6 3.3 10.9 10.0
OFW Remittances (USD bn) 21.9 21.4 23.0 24.6 25.8 26.0
Source: Santos Knight Frank citing Bangko Sentral ng Pilipinas, Philippine Statistics Authority, Oxford
Economics

Real estate industry overview

One of the growth drivers of the Philippine economy over the past few years has been the real estate sector.
The current state of the real estate sector is probably the strongest it has ever been in the history of the country.
The growth in the sector is across all the segmentsbe it office, industrial, residential, hospitality and retail.
Each of these segments is driven by specific growth drivers which in effect are the same growth drivers of the
Philippine economy as a whole.

CEBU

With the booming real estate market of Cebu City, different development options have been opened for
engagement and investment.

A. Residential market

The residential market has gone through the upswing stage with the demand fueled by three growth areas: the
secular growth, economic growth and global growth.

Secular growth refers to the growing population of OFWs and Filipino residing abroad. Economic growth
refers to the fiscal discipline currently being displayed by the Philippines. Global growth refers to the increase
of multinational corporations mostly by way of the BPO sector.

Local Cebuano developers have already caught the attention of both national and foreign real estate players and
buyers due to the quality and neoteric concepts of their residential condominium developments. In this regard,
the need for innovation is imperative as demand for housing increases as of the first half of 2016.

Supply condominium projects

Analyzing the last eight years of the residential segment in Metro Cebu, it can be noted that for 2006 to 2009,
the growth of condominium projects was modest only one to two projects were being launched per year. By
the year 2010, however, a sudden growth was seen with the introduction of 13 residential towers. This
momentum was sustained for the following years as the residential segment taps into Cebus market potential
brought about by the progression of the services sector. In 2012, 28 projects were launched equating to 7,715
units, the highest in Metro Cebu for the eight-year period. It was during this year when the country exhibited
strong macroeconomic growth concurrent with the robust expansion of the office, tourism and industrial sector.

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National players have also started entering and expanding in Cebu during the year. Notable developments were
Sanremo Oasis by Filinvest Land, One Pacific & One Manchester by Megaworld and Park Point Residences by
Ayala Land Premier.

From years 2013 to 2016, the growth of the supply of residential condominiums stabilized between 3,100 to
3,600 units being added every year.

Figure 1. Historical Condominium Launches

Source: Santos Knight Frank

In terms of allocation, mid-market projects continue to dominate the residential market in Metro Cebu with
55% of the total market share. Meanwhile, high-end and affordable condominiums occupy 28% and 17% of
the total stock, respectively. Majority of the developers are local ones but national players such as Ayala
Land, Megaworld, Filinvest and Robinsons Land are continuously increasing their presence in the hottest
residential market in the country next to Metro Manila.

Overall supply by developer

In terms of the total supply of residential units, the Company ranks second with total condominium units of
3,150 in Metro Cebu and 11% market share compared with the other developers. Ayala Land Incorporated has
the highest market share with 17%, which covers Amaia Land, Avida Land, Alveo Land and Ayala Land
Premier projects offering affordable to high-end condominium units with a total of 4,935 units. Filinvest ranks
third with 8% market share and a total number of 2,360 units.

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 Figure 2. Market Share of Units Float per Developer in Metro Cebu (in Units)

Source: Santos Knight Frank

Meanwhile, in terms of supply in peso value, the Company posted a 7.45% market share, slightly higher than
Filinvest Land Incorporateds 7.31%. Ayala Land Incorporated still remained number one in terms of peso
value due to the number of units floated that covers all market classifications, from affordable to high-end in
Metro Cebu. The market shares of other major developers are as follows: Taft Properties (6%), Federal Land
(6%), and Primary Homes (5%).

Figure 3. Market Share of Units Float per Developer in Metro Cebu (in Peso)

Source: Santos Knight Frank

There are a total of 23 identified condominium developers in Metro Cebu. In terms of the most number of units,
Ayala Land claims the top spot through the ten condominium towers that it commands throughout Metro Cebu.

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The Company (2,861 units) and Federal Land (1,251 units) are positioned in the second and third spot,
respectively.

Table 2. Residential Units per Developer

Developers
Ayala Land Inc
Cebu Landmasters
Taft Properties
Federal Land
Hongkong Land / Taft Properties
Aboitiz Land
Filinvest Land, Inc
Grand Land
Apple One Properties
Land Traders World Properties Corp.
Robinsons Land Corp
Gold Peach Properties
SunKai Land
Fuente Triangle Realty Dev't
Contempo Property Holdings
Primary Homes
Rockwell Properties
Wei Kiat Construction Pte Ltd
Worldwide Central Properties Inc
Cebu Green Peaks Dev't Inc.
Acropolis Land
RCAB Properties Inc
Cebu Korona Dev't Corp.
Source: Santos Knight Frank
Number of Number of Residential
Towers Units
10 4,264
11 2,861
2 1,251
3 1,043
2 990
2 950
6 931
3 929
6 809
2 729
2 665
2 629
1 529
2 523
2 497
2 461
4 401
1 365
1 257
1 179
1 161
1 128
1 120

Selling Price

Residential condominiums are generally classified as affordable, mid-market, high- end or luxury. The
classification is based primarily on price. In this study, classifications of the developments are limited only to
affordable, mid-end and high-end condominium.

Table 3. Types of Residential Condominiums

Category Selling Price (P/sqm)

Luxury More than P170,000
High-end More than P110,000
Mid-end P76,000 to P110,000
Affordable Less than P76,000

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 Source: Santos Knight Frank

As of July 2016, values for residential condominiums range from P63,000 to as high as P146,000 per square
meter.

Figure 4. Average Price per Square Meter (by Unit Type)

Source: Santos Knight Frank

The strategic component of Cebu City is its proximity to central business districts (CBDs) such as Cebu
Business park and Cebu IT Park as well as to nearby retail areas. This justifies its sustained status as the most
expensive in terms of condominium units being offered at an average price per sq. m. of approximately
P104,000. Lapu-Lapu City remains second with P102,000 per sq. m., and lastly is Mandaue City with P87,000
per sq. m. Prices can be attributed not only to the provinces tactical location but also to its urban-resort come-
on element.

Demand condominium projects

The strong economic performance of both the country and Cebu bodes well to the demand of residential
properties in the province. Sustained demand for condominium units were registered throughout the recent
years. The residential developments have been successful in capturing the demand from their respective target
market. The growth in demand is not only coming from end-users, but from the investors as well. Given the
strong business climate in Metro Cebu, individual investors perceive the residential market to be highly
profitable.

Figure 5. Absorption Rate of Condominiums per Classification

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 Source: Santos Knight Frank

Majority of the projects being currently marketed already has an absorption rate of over 60%. However,
projects which have low absorption rates are relatively new to the market and are still trying to penetrate the
booming sector. On average, 395 condominium units are sold every month in Metro Cebu. This is based from
the collective monthly take-ups of each project. This also translates to an average of seven units being sold per
month for every residential project.

Table 4. Demand for Residential Condominiums (Sample)

Project Name Take-Up Rate Absorption Rate Inventory

Mivesa Garden Residences Building 5 9.42 96% 360
Midori Residences Building 2 5.50 96% 198
Apple One Banawa Heights Tower 1 3.07 94% 137
Avida Towers Riala Tower 2 13.90 94% 621
Sanremo Oasis Building 2 2.63 93% 169
Apple One Banawa Heights Villa 1 to 4 8.60 93% 276
Apple One Banawa Heights Tower 2 4.27 93% 137
Cebu Grand Residences East Tower 1 5.00 93% 247
Sanremo Oasis Building 7 2.47 93% 159
1016 Residences 1.51 93% 109
Source: Santos Knight Frank

Total demand by developer

Ayala Land Incorporated has the highest units sold in Metro Cebu with a market share of 17%, followed by the
Company and Filinvest Land Incorporated both with 9%. Eleven developers has a fair market share ranging
from 3% to 8% that offers affordable to mid-end class of condominiums. There are 15 smaller developers with
below 2% market share, which as a group has a total market share of 15%.

Figure 6. Market Share of Units Sold per Developer in Metro Cebu (in Units)

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 Source: Santos Knight Frank

Supply horizontal subdivisions

The residential housing in Metro Cebu has eased over the years. This is mainly an effect of the scarcity in the
total land supply which translates to a rise in the land values. For the past three years, there has not been much
change in the overall supply for the horizontal subdivisions. Nevertheless, it is evident in the figure presented
below that the scarcity of land has made a great effect to the supply since most of the developers changed their
focus in developing different real estate projects. In 2013, the most number of supplies was floated in the
residential market while 2015 recorded the least number of units.

Figure 7. Historical Supply of Horizontal Subdivision (House & Lot and Lots Only)

7,656
6,817 4,976

5,021 4,782 4,605

Source: Santos Knight Frank

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The residential supply in Cebu has been very dramatic since the entrance of national real estate players. A
consistent increase in supply is seen as both local and national real estate developers unite to give assurance
that there will be adequate supply to meet the increase in demand. The North and South Cebu are the targets for
growth in the succeeding years. They are expected to address the supply deficit in areas such as Mactan and
Cebu City specifically in the lower segments. In aggregate, the supply of house and lot projects is dominated by
Primary Homes. They were able to take hold of the largest supply share in the house and lot residential market
with 12% of the total. Not at far, second is the Company which commands a 10% of the market share by
launching four new house and lot projects.

Figure 8. Market Supply Share per Developer

Source: Santos Knight Frank

Different house and lot classifications have showed different movements when it comes to supply floated.
Renowned real estate players catering to the mid-end market (such as Vista Land and Lifescapes) has
influenced the domination of medium cost houses in the skyline of Cebu. Likewise, local and smaller property
firms tend to venture in this category due to the high price of lots in the city. It is showed in the figure below
that middle cost market has the most number of units floated through the years. In 2014, middle cost housing
was able to gain its maximum production by releasing 4,187 units (inventory includes remaining units from
previous year plus new supply) in the market. On the other hand, open market holds the smallest number of
units due to the markets incapability to buy their product offerings.

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 Figure 9. Historical Inventory of House & Lot Projects per Classification

Source: Santos Knight Frank

With respect to the developers in Cebu, below is the profile of the key real estate developers. Primary Homes
has the most number of developments in the trade area with nine residential subdivisions. At near second with
the most number of residential developments is Vista Land and Lifescapes, with Camella Homes as its most
common structure. 8990 Development Corporation has only two developments in the trade area, one of which
is Decahomes Baywal which holds 882 total units floated.

Table 5. Profile of Key Developers in the Trade Area

Developer No. of Market

Developments
Primary Homes 9 Middle Cost & High-end
Vista Land and Lifescapes 6 Economic, Middle Cost & High-end
Cebu Landmasters 4 Economic & Middle Cost
Aboitiz Land 3 Middle Cost & High-end
8990 Development 2 Economic
Source: Santos Knight Frank

Demand horizontal subdivisions

Generally, one of the factors that affect price for residential development is their location. Residential projects
which are located in close proximity to major establishments or institutions and are highly accessible command
higher price. Based from the table below, as the supply decreases through the years the demand also decreases.
It can be inferred that the supply in the lots only segment affects the demand. In 2015, only 576 units are sold
out of 2,415. We can conclude that developers and also the buyers have switched interest to other residential
development classification (e.g. residential condominium).

Absorption rate and take-up are varied depending on the projects target market, house models and amenities,
including their brand and marketing strategies. For instance, some developers may bank on the numerous and
unique amenities in order to boost their sales.

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 Figure 10. Historical Demand of Lots Only Projects per Classification

Source: Santos Knight Frank

In the trade area, it is evident that most of the housing players are aggressive in terms of their competitiveness.
They were able to wear out more than half of their total inventory. It can be inferred from the figure above that
the Cebu market has developed an interest in investing in residential housing in the years later. Improvements
on income made the market move up to the next price bracket which makes the trading area a mature market.

Figure 11. Historical Demand of Lots Only Projects

Source: Santos Knight Frank

Based from the table above, as the supply decreases through the years the demand also decreases. It can be
inferred that the supply of lots only segment affects the demand. In 2015, only 576 units are sold out of 2,415.
We can conclude that developers and buyers have switched interest to other residential development
classification (e.g. residential condominium).

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Market Outlook Residential

Blessed with robust economic growth, a vibrant and flourishing outlook for the residential sector in Metro
Cebu continues to be predictable. The residential condominium market in Cebu City has greatly benefited from
foreign investments particularly in the manufacturing and BPO sector. The bullish expansion of BPO/IT offices
in Cebu Business District has increased the demand for residential dwellings proximate to work places such as
the Cebu Business Park and Cebu IT Park. Executives and expatriates residential requirements also went up
along with the entry and operation of more foreign companies.

Local developers have begun to step out of their comfort zone and level-up their A game now that foreign
players are eyeing the province. Though some have already partnered and conducted joint ventures with
international developers such as Mandani Bay Suites developed together by Hongkong Land and Taft
Properties. Another one is Iron Wood Property Ventures Corp. (IWPC) founded by local entrepreneurs and
foreign investors. IWPC launched its North Star Condominium project located in Mandaue City which is a
mid-rise residential development consisting of 186 units in total but with 47 available units left as of date. It
features studio units of 32-40 sq. m, and 1- to 3-bedroom units ranging from 49-80 sq. m, and loft types from
48-64 sq. m.

Based on the velocity of take-up of residential units in Cebu Business Park, the supply is expected to be
depleted within the next two (2) years across all segments. Majority of the residential condominiums in Cebu
Business Park posted above 75% absorption rate. Hence, this trend shows the growing opportunity to enter the
market in the following years.

B. Retail Market

The retail sector in Cebu City surges along with the other sectors due to the influx of investments in the area. A
number of retail establishments ranging from malls to commercial strips have been constructed in Cebu City at
an unprecedented pace. This is a clear manifestation of the confidence of developers on the spending capacity
of the local market. The change in consumption behavior of dwellers in Cebu City is brought about by the
increase in spending power of those living and working in the area. The growth can be attributed to the
remittances of OFWs, BPO companies and tourism. As a result of this consumption pattern, retail tenants have
continuously taken up the available spaces in the market. With rental rates ranging from P800 to P1,200 per
sq.m., established retail projects are significantly taken up by new players. Likewise, absorption of Robinsons
Galleria and SM Seaside Citys retail spaces is already gaining ground.

Moreover, the proliferation of commercial strips has proven advantageous for consumers and retail locators
alike as consumers are given more alternatives. On the other hand, locators in these developments also reap
benefits as they are offered lower lease rates as compared to the traditional mall.

Table 6. Rental Rates of Commercial Strips

Commercial Strip Lease Rate Occupancy Rate Available Space

One Mango Avenue 808.00 100% 0.00
Two Mango Avenue 850.00 100% 0.00
Crossroads 650.00 100% 0.00
Vibo Place 800.00 65% 2,287.50
Capitol Square 550.00 90% 950.00
Escario Central 650.00 100% 0.00
Banilad Town Center 850.00 95% 660.00
North Agora 390.00 94% 320.00
Source: Santos Knight Frank

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Rental rates of these developments have been steadily increasing due to the strong demand for these spaces.
Being pegged at P550 to P850 per sq.m. per month, most of these projects have continuously boasted ease of
accessibility to consumers and suitability for late night operations. The only outlier in the sample is North
Agora which is located far north and has a lesser consumer base.

Market Outlook Retail

In general, the retail market of Cebu remains positive and will continue to grow in the succeeding years. Large
developers keep up with the Cebuano lifestyle as new developments have become accessible to the people and
more retail brands continue to occupy spaces in malls and shopping centers. Commercial retail components
inside upcoming residential developments, the same with mixed-use developments, have been a trend in Cebu
which will cater well-known brands as these provide convenience and spur more demand in the market.

Moreover, with the continuous expansion in the office, hospitality and residential segments in the Cebu real
estate market, the retail industry is expected to flourish and will continue to grow as more international brands
enter the market. Infrastructure efforts, likewise, will ease investments in Metro Cebus major business districts
as road network access and traffic management are contemplated by both public and private parties. More
business participation is established as businesses become more confident in the market fostered by high
consumption and steady increase in tourist arrival and retail earnings.
C. Hotel Accommodation Market

The tourism industry continues to flourish as business demand in Metro Cebu is sustained by the increasing
inflow of investments in the office sector and the declining costs of travel and accommodation. The expansion
in the outsourcing and traditional industries is anticipated to further increase the market of business hotels since
heightened investment levels promote the influx of corporate executives. However, in spite of this intensified
demand, spurring hotel developments has continuously cannibalized each others market share. Currently, there
are almost 80 hotel projects in the skyline of Cebu, and several more are upcoming. As such, foraying in the
hospitality segment would be cumbersome in light of the heightened competition in the area.

Supply

Presently in Cebu City, 74 hotels have been identified translating to 7,668 rooms in total. This is, however,
expected to increase as some hotels are expected to expand and new hotels are to penetrate the market soon.

It has also been observed that the number of hotel rooms have been growing at 8.75% rate on the average at
least for the past four years. Taking into account the last ten years, the supply of hotel rooms grew by an
average of 10.22% compounded annually. This would translate to an average of 377 hotel rooms being added
to the market at an annual basis. This signifies that developers are bullish towards the active tourism industry in
the trade area.

The first half of 2016 was marked by a robust arrival of tourists in the country emanating from the combined
efforts of the private sector and the government which further bolstered the industry. Latest data from the
Department of Tourism recorded a 7.61% increase from 413,937 to 445,449 total visitor count as of May 2016.
For Cebu, the province continues to enjoy the chunk in visitor arrival entrants via air comprising 16.94% or
75,449 in total next to Metro Manila. Korea prevails as the top visitor and spending market growing at 22.88%,
followed by USA and China with growth rates at 15% and 11.33%, respectively.

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 Figure 12. Total Visitor Arrivals in Cebu

Source: Santos Knight Frank

For the past four years, the tourism industry of the trade area has been growing by an average of 11.58%. Out
of the total tourist arrivals, foreign nationals accounted only less than 3%. Same with the retail sector, the
hospitality sector is being fueled by the domestic consumption of local tourists.

Demand

In Metro Cebu, demand for accommodation has been observed to be highly seasonal. Although there is a
constant demand coming from businessmen and from the continuous influx of tourists, spike in occupancy rates
highly occur during certain periods. As stated earlier, the Sinulog Festival is a known driver of the hospitality
industry in the city. This nationwide renowned festivity causes major influx of domestic and international
visitors.

Stable demand for hospitality services has been witnessed in the recent years as occupancy rates of hotels were
recorded to steadily fluctuate in the 50-65% territory. From this, it can also be deemed that the movement of
demand for accommodation is concurrent with the movement of hotel room supply.

The supportable supply still exceeds actual supply of rooms for all upcoming years. Aside from the noted
upcoming hotels in the pipeline (i.e. Seda Hotel and Taft East Gate Hotel), more than 50 rooms is assumed
further to be added in the market every year coming from small developers. Therefore, a total of only 168
rooms can be supplied on year 2020. Penetrating the market at the soonest time possible, occupancy levels are
projected to progress overtime to make way for the upcoming competitors.

Market Outlook Hotel/Accommodation

Cebus hospitality sector has a lot of potential. With the effective marketing of both private and government
units, sustained industry competitiveness can be expected in the coming years, and this will operate as a beacon
not only for increased visitor arrivals but also for tourism players to further pursue business undertakings.

As a result of these heightened tourism activities, hotel operations were seen to be more profitable during the
year. Current hotel developers were keen on expanding their business operations while national and global
players are anticipated to construct their own projects in the trade area.

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The bullish growth of Cebus tourism industry keeps on attracting airline carriers to construct new routes to
access the Metro.

As the province continues its pursuit as a top travel destination for tourists and a premier hub for international
investors, infrastructure development remains a key success and competitive factor.

To date, several projects have already been lined-up in Central Visayas such as the Cebu-Cordovan Bridge,
Cebu-Negros Oriental Bridge, and a PhP35-billion urban automated guideway transit (AGT) type rail system.
Recently completed projects within the first half of 2016 include Cebu South Road and Cebu Toledo Wharf
Road.

D. Office Market

In the Metro Cebu office segment, the main driver has been the BPO industry. The Philippines has been
identified as the preferred BPO/IT destination globally and one of the cost effective areas for which to
outsource these requirements for two main reasons. The first is the availability of a large talented labor pool
that could handle outsourcing requirements at a fraction of the cost compared to their point of origin. Second is
the availability of office space suited to address outsourcing requirements that comes at an affordable and cost
effective rate. In terms of office space lease rates, the Philippines in general have the lowest across all of Asia
around US$26 to US$32 per square foot per annum.

Cebu City is now experiencing strong influx of outsourcing investments. Tholons, an international advisory
firm, has placed the city as the top seven investment choices for BPO businesses. This paved way to the
development of several buildings which were built to suit the requirements of BPO offices. This trend deviated
from the traditional office buildings which were predominant within the major business park of Cebu City.
Multinational and large outsourcing companies started setting up shop in the area. This led to the spurring
offices of Aegis People Support, JP Morgan and Chase, Convergys, Teleperformance and Teletech in the
growth areas of the city.

Supply

The office buildings in Cebu City are proliferating in two major growth areas: Cebu Business Park and Cebu IT
Park. However, there are also several office buildings scattered throughout the three major cities of Metro
Cebu. This is especially due to more property players vying to develop their own IT and business parks. New
mixed- use projects such as Megaworlds Mactan Newtown in Lapu-Lapu City and Norkis Cyberpark in
Mandaue City are anticipated to keep on stimulating the office setting of the area. For this study, the buildings
scattered throughout the three cities will be classified under the buildings in the Fringe Areas.

Figure 13. Historical Office Supply in Metro Cebu

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 Source: Santos Knight Frank

Gradual growth of office supply was witnessed within the skyline of Cebu as new buildings are introduced on a
yearly basis. Among the three growth areas, the offices in the fringe areas are the highest contributor to the
aggregate supply with a combined leasable area of 236,061 sq.m. Offices in these areas usually locate close to
dense residential areas to tap into the strong yet cheap labor force of Metro Cebu. This is followed by Cebu IT
Park which takes advantage of the steadfast growth of the IT-BPO industry. Cebu Business Park, which is a
home to several traditional office buildings, is joining the bandwagon as it started introducing built- to-suit
offices in the recent years.

Currently, there are about 56 online office buildings in Metro Cebu. As stated earlier, Cebu Business Park has
the highest number of traditional office buildings. On the other hand, all of the office buildings in Cebu IT Park
are classified as BPO buildings. The office spaces in these structures usually commands larger cuts and less
partitions to suit the operations of the company. In total, Cebu IT Park has leasable space equal to 207,347
sq.m.

Supply - market share per developer

Ayala Land Inc. offered the most number of gross leasable area in Metro Cebu with a total of 107,974 sq.m. or
a 16% market share. Second is Primary Structures Corporation with 64,098.41 sq.m. of leasable area with a
market share of 10%. This is followed by Skyrise Realty and Development Corporation with 9%, Megaworld
Inc. with 7%, and Filinvest Land Inc. with 4% among other office developer. There are 22 other office
developers that has a leasable area of market share below 3%. The Company has 1% of the market share with a
gross leasable area of 7,778.45 of Park Centrale Tower.

Figure 14. Market Share of Gross Leasable Area in Metro Cebu (in sq.m.)

Source: Santos Knight Frank

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Lease Rates

Lease rates of office buildings in Metro Cebu are significantly lower than those of the business districts in
Metro Manila. Coupled with the lower cost of skilled labor, this has induced more investors to set up shop in
Metro Cebu. In Metro Manila, lease rates for office spaces can go up to as high as P1,500 per square meter.
Metro Cebus lease rate is significantly lower since the highest recorded asking rate in the area is at P1,300 per
sq.m.

Table 7. Range of Lease Rates per Area

Area Lease Rates

Cebu Business Park PhP450 PhP1,300
Cebu IT Park PhP450 PhP750
Fringe Area PhP350 - PhP675
Source: Santos Knight Frank

Demand

With Cebu City being recognized worldwide as a top outsourcing destination, continuous demand has been
evident in its office landscape. Likewise, spillover effects have been benefitting the cities of Mandaue and
Lapu-Lapu as they are highly proximate to the former yet command relatively lower lease rates. This demand
was witnessed during the recent years through the proliferation of BPO locators driving the occupancy levels
down.

As of July 2016, overall occupancy rate in Metro Cebu is at 81.46%. Among the three growth areas, Cebu IT
Park registered the highest occupancy level which is about 95%. On the other hand, the introduction of new
buildings in the fringe areas pushed the aggregate vacancy rating upward as compared last year. Collectively,
out of the 56 office buildings in the sample observed, 26 are fully leased out. Most of the remaining buildings,
however, are experiencing more than 75% occupancy rate.

Figure 15. Lease Rates and Occupancy Rates

Source: Santos Knight Frank

Evidently, most of the office buildings that have high vacancy levels are those which are situated in the fringe
areas. Despite commanding lower lease rates, office locators maintain their preference in both Cebu Business

122
Park and Cebu IT Park. Aside from the fact that both areas are PEZA-registered, the ease of accessibility and
presence of infrastructures which can support office operations are swaying factors for prospective locators.

Demand market share by developer

Offering the most number of gross leasable office space in the market, Ayala Land Inc. subsequently posted
the highest market share of 17% in terms of leased units. Skyrise Realty & Development Corporation and
Primary Structures Corporation tied up at second with 11% share of the total units leased.

Figure 16. Market Share of Occupied Leasable Area in Metro Cebu (in sq.m.)

Source: Santos Knight Frank

Market Outlook Office

Projection for Metro Cebu market remains positive as labor cost is relatively cheaper compared to Metro
Manila. Metro Cebu and its nearby provinces are also able to supply the right amount of highly skilled workers
that could further support the needs of the IT-BPO industry.

Over 1.3 million people are employed under the outsourcing industry of the Philippines and approximately
130,000 full-time employees are under the Metro Cebu.

Strong operations of office buildings in Metro Cebu were consistently registered in the previous years as a
result of the booming IT-BPO industry. It is even foreseen that this trend will be sustained in the coming years
as the expansion of the industry will keep its upward growth trajectory.

Currently, supply of office space is at 509,000 square meters which will be progressing in the coming years as
more developers construct office buildings. On the other hand, based on the data from the IT and Business
Process Association of the Philippines, average growth of BPO employment is almost at 17% per annum.
Assuming that this rate of growth holds in the coming years, demand is slated to eclipse supply by the year
2018.

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 Figure 17. Projected Demand and Supply of Office Space

Source: Santos Knight Frank

Although the optimal year of entry in the office segment is by 2018, this does not signify that foraying in the
said segment immediately would result to losses. This was evidenced by the operations of some comparable
office establishments which are highly proximate to the subject property.

E. Industrial Market

The Philippines continue to be one of the most competitive among South East Asian countries as evidenced
by the Philippine gross domestic product (GDP) which is recorded at 6.9%. The markets attractiveness to
foreign direct investment is sustained as the business outlook in the industry sector remains positive. Investors
have been showing interest in the Cebu industrial sector backed by the strong demand for investments and the
rapid development in the area.
The manufacturing sector is able to maintain its momentum with a growth registered at 8.1% which is
significantly higher compared to the previous year. Electronics and communication equipment and apparatus
were the major drivers of this growth. Demand for manufacturing continues to grow as the country lures in
more investments coming from major companies and corporations.
With the tight supply of building spaces in industrial locations, this urged the need for expansion in Cebu
economic zones. The Mactan Economic Zone has approximately 9,300 sq.m.of available building space for
manufacturing and 2,600 sq.m. for warehouses. Mactan Economic Zone II has 13,900 square meters of
available space for manufacturers and Cebu Light Industrial Park has more than 3,000 square meters of
available building space for manufacturing and warehouse use, respectively.
Moreover, Naga Valley Industrial Parks available lot area of 36 hectares is already reserved to be an
assembly plant for Spanners Group of Companies. The Singaporean company has seen the countrys
commitment to agricultural development therefore supporting farmers with modern farming equipments and
efficient farming practices to maximize agricultural productivity. This will spur employment and economic
activity in the area and will help boost agriculture export trade in the country.
Market Outlook Industrial

Cebu has been recognized to be one of the major prime locations for industrial investors as economic zones
make room for more expansion backed by the areas accessibility to network distribution, infrastructure
developments and its overall strategic location. One of the firms that expressed their intentions of expanding in

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Cebu was Steel Asia with a new plant located at Compostela. Visayan Electric Company Inc., a subsidiary of
Aboitiz Power Corporation, will also increase industrial activity as the company will venture on utility
structures and a joint venture with Ayala Land for a 17.5 hectare mixed-use development called Gatewalk
Central located in Mandaue City. Lastly, MRC Allied Inc. will also have its solar farm in Naga City known as
New Cebu Township One which is a 60 hectare industrial estate.

DAVAO

Davao City is one of the emerging cities outside Metro Manila. According to a study conducted by National
Competitiveness Council Philippines, Davao City ranked fifth among all cities when it comes to overall
competitiveness. It has already captured the attention of different types of investors both local and foreign and
it is evident that Davao City is ready to accommodate them. With the recent victory of former Davao City
mayor Rodrigo Duterte in presidency, we can expect a major boost in the economic performance of the area
especially in the real estate industry. Key drivers for growth will be the one to push the upward movement in
real estate industry in Davao be it retail, office, residential, industrial and hospitality.

A. Residential Market

Davao Citys residential segment at present is being defined by the increase in both vertical and horizontal
settlements. Local and national developers have been very enthusiastic in constructing projects due to the
potential they see from the market. Foreign individuals, OFW remittances, BPO employees and locals from
Davao City are the primary demand drivers in these types of real estate developments. The rise in the office
segment also translates to growth in the residential scene since most of the high paying individuals prefer to
invest in new and comfortable locations. Normally, the residential dwellings are scattered within a specific
trade area specifically in the areas of growth. More often, subdivisions located in growth centers exhaust their
supply especially those which products are consumer friendly.

Supply

The robust expansion in Davao Citys residential market is very evident. Currently, there are 49 actively
marketed horizontal and vertical subdivisions in the residential scene, and two upcoming subdivisions. Of the
49, 21 are house are lot subdivisions, nine are lots-only subdivision while the remaining 19 are residential
condominiums. This competitive sample is summing up to a total of 69,926 units. Notable players in the
sample are Kisan Lu, Megaworld, Sta. Lucia Land and Ayala Land for floating the most number of units in
each of the respective housing segments.

Figure 18. Supply of House & Lot Subdivision

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 Source: Santos Knight Frank

The house and lot segment supply is dominated by Vista Land and Lifescapes Inc. through Camella projects.
Camella Davao holds the most number of residential units with 1,682 units. Second would be Deca Homes
Resort and Residences by 8990 Housing Development Corporation with 1,406 units. This development has
developed a mini water park just across the subdivision frontage not only to provide entertainment to its
residents but also to lure more investors. On the other hand, Mountain Haven Development Inc., a local
developer from Davao, holds the least number of units with only 126 units floated.

Residential condominium

The vertical subdivision today belongs to the residential mix of Davao City. This type of development was
easily adopted by Davao City locals and other types of investors. One Lakeshore Drive by Megaworld and
Suntrust took the largest share in the residential condominium market at 17% by floating 1,420 units. Next is
Avida Towers by Avida Land with 13% market share at 1,061 units. However, Damosa Land and Lanang
Realty Development Corporation, both local developers, take hold of the same percentage in the market with
2%. Siam 8000, which is developed by Lanang Realty Development Corporation is managed by Dusit Thani
has 166 units. The development is a condotel where in only a certain part of the project is offered as
condominium units while the rest are for hotel accommodation.

Figure 19. Developer Percentage Share

Source: Santos Knight Frank

Selling Price

For residential subdivisions, they are categorized according to their total contract price. At present, the total
contract price for house and lot units ranges from P950,000 up to P8,378,974. House and lot packages for
residential subdivision has a selling price per square meter that ranges from P18,000 to P76,000 per square
meter. Middle cost housing dominated the residential market in Davao City having an average price per square
meter of P31,000 to P72,000 per square meter. On the other hand, economic housing projects have the lowest
average selling price per square meter which ranges from P24,000 to P60,000 per square meter.

Meanwhile, the open market housing subdivisions have relatively the same price per sq.m. as middle cost
housing with P30,000 to P76,000 per sq.m., but since these developments have larger lot cuts, total contract
prices of these house and lot packages are more expensive as compared to other housing types.

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 Table 8. Types of Residential Condominiums

Category Selling Price (P/sq.m.)

Luxury More than P170,000
High-end More than P110,000
Mid-end P70,000 to P110,000
Affordable Less than P70,000
Source: Santos Knight Frank
Residential condominiums, on the other hand, are generally classified as affordable, mid- market, high-end or
luxury. The classification is based primarily on price. In this study, classifications of the developments are
limited only to affordable, mid-end and high-end condominium.
As of July 2016, average selling price per square meter for residential condominiums range from P58,000 to as
high as P173000 per sq.m. Mid-end type dominated the condominium market in the trade area with an average
price per sq.m. ranging from P80,000 to P100,000 price per sq.m. while affordable type posted the lowest
average price per sq.m. ranging from P57,000 to P68,000 price per sq.m. Generally, Verdon Parc by DMCI
Homes posted the lowest price across all residential condominiums. On the other hand, the project offering the
most expensive unit is Siam 8000 Residences.

Demand Residential

The projects in the residential subdivision has compounded absorption rate of 85%. Economic housing holds
the largest share in the market with 45% with only a slight difference from middle cost at 44%. Despite having
the most number of units in the market, economic housing still managed to have the highest rate of absorption
at 96.16%. Middle cost already exhausted 77.04% of its units while open market recorded 84.69% rate of
absorption.
Figure 20. Absorption Rate of Subdivision per Classification

Source: Santos Knight Frank

Most of the projects currently marketed possess an absorption rate of 65%. However, projects which have low
absorption rates are relatively new to the market and are still trying to penetrate the upward movement of the
sector. On an average, 84 condominium units are sold monthly in the City of Davao. This number is based
from the collective monthly take-ups of each condominium project in the trade area.

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 Figure 21. Absorption Rate of Condominiums per Classification

Source: Santos Knight Frank

B. Office market

Davao City has recently claimed the top ledge for 2010s Next Wave Cities for investments in the Business
Process Outsourcing (BPO) and Information and Technology (IT) Sectors. It is followed by the Cities of Sta.
Rosa in Laguna, Bacolod and Iloilo. The citation came as result for the citys strong performance in key areas.
Basically, the city has the most conducive environment for investments in the mentioned sectors because it has
exemplary and abundant workforce, quality infrastructures and cost of doing business is low.

Supply office market

Office Buildings in Davao City may be categorized into two: traditional Offices and BPO Offices. Traditional
offices do not only include upscale and high-rise towers but also old and traditional offices scattered within
different areas in Davao City. On the other hand, BPO offices may be further categorized into built-to-suit
office buildings and converted office buildings. Traditional offices are the type of office buildings which offer
spaces for lease to tenants without the latters specifications. Most of the office buildings overlooking the
landscape of the Makati CBD are of this type. In Davao, the more prominent traditional offices are the Pryce
Tower, Landco Tower, FTC Tower and Metro Lifestyle Center.

Table 9. Office Supply in Davao City

Office Gross Leasable Area (sqm)

SM City Davao 19,514
Lanang Business Park 3,842
Matina IT Park 5,600
Pryce Tower 13,442
Topaz Tower 8,030
Felcris Centrale 13,857
Landco Corporate Center 12,000
Golden Matina Center 2,921
Tavera Business Center 2,712
Abreeza Corporate Center 18,000

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 Robinsons Cybergate 5,000
SM Lanang Premier 3,596
Source: Santos Knight Frank

Gradual growth of office supply was witnessed in the Davao City as new buildings are introduced on a yearly
basis. The office supply in Davao City has a combined leasable area of 108,514 sq.m., not counting the
upcoming supplies which will total at around 65,000 sq.m. This manifests that the office sector in Davao City
is growing. The highest contributor in the competitive sample is SM City Davao with 19,514 sq.m., where
tenants are primarily BPO offices. Next in line is Abreeza Corporate Center with 18,000 sq.m. gross leasable
area, also with BPO tenants.
On the other hand, Pryce Tower and Landco Corporate Center are still home for traditional offices.

Currently, there are about 12 online office buildings in Davao City. As stated earlier, Davao City will be having
additional supply for their office sector as upcoming establishments such as Matina Town Square, Cybergate
Delta by Robinsons Land, Davao Finance Center, Matina IT Park and Espacio de Eugenio. Most of the office
buildings are situated along J.P. Laurel Ave. making it accessible to the target market since different modes of
transportation pass through the major thoroughfare.

Lease rates

Lease rates of office buildings in Davao City are significantly lower than that of the business districts in Metro
Manila. In Metro Manila, lease rates for office spaces can go up to as high as P1,500 per sq.m. Davao Citys
lease rate is significantly lower since the highest recorded asking rate in the area is at P500 per sq.m.
Table 10. Lease Rates per Area

Area Lease Rate

JP Laurel 350-450
Ecoland 375
Quimpo 450
McArthur Highway 400
Torres Street 500
Source: Santos Knight Frank

Tavera Business Center in Torres Street commands the highest least rate at P500 price per sq.m., while the J.P.
Laurel area offers the lowest lease rate per sq.m. at P375 but goes up to P450 price per sq.m. This event is
primarily because different establishments scatter along the said area.

Demand office market

The demand for BPO space may be reflected by the entry of national players in Davao City. Back in 2010,
Robinsons Land has offered to the public its very first portfolio in the area, Robinsons Cybergate. The latter
offers 5,000 sq.m. of office space, which is directly adjacent to its supermarket and al fresco dining area. Also,
Ayala Lands Abreeza, a mixed-use development with retail and office building components, is at full
occupancy.

The table below shows the occupancy of the existing office buildings in Davao City. It can be inferred that the
demand for office buildings is growing since most of the supply are nearing exhaustion. Six out of 13 office
buildings are already 100% occupied. However, Felcris Centrale is still in the process of looking for valuable
tenants to offer their office spaces.

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 Table 11. Lease Rates and Occupancy Rates

Office Lease Rate Occupancy Rate

SM City Davao 375 100%
Lanang Business Park 375 98%
Matina IT Park 400 100%
Pryce Tower 350 98%
Topaz Tower 400 93%
Felcris Centrale 450 -
Landco Corporate Center 400 62%
Golden Matina Center 400 32%
Tavera Business Center 500 100%
Abreeza Corporate Center 450 100%
Robinsons Cybergate 450 100%
SM Lanang Premier 375 100%
Source: Santos Knight Frank

CAGAYAN DE ORO

Consistently ranked by the National Competitiveness Council among the top 10 of the Philippines most
competitive cities, Cagayan de Oro is the strategic choice to do business. This first-class city has a well-
developed infrastructure backbone, excellent connectivity to major production areas and markets through the
presence of an international port and multi-berth base port, an international airport, and extensive inter and
intra-city road networks, rich agricultural resources, extensive pool of human resources, and a diverse range of
eco-tourism attractions coupled with a dynamic cultural and arts calendar.

A. Residential Market

The residential market in CDO has been supported by urbanization. Major national developers have been keen
in producing residential subdivision within the city to satisfy the demand brought about by different economic
factors. At present, major developers such as Ayala Land Premiere, Robinsons Homes and Vista Land &
Lifescapes have each invested in various residential projects around the city. Local developers are also in the
residential scene.

The concern now shifts to the acceptability of high rise developments, condominiums in particular, to
residential buyers. It is worthwhile to note that the levels of urbanization and real estate investments in the city
are racing to match those of other emerging cities such as Davao City. Being an economic center in its region
with a broad market base, the rise in the number of condominium developments is forthcoming.

There are a total of 33 subdivisions included in the competitive set which are segmented according to their
selling prices namely: (1) high-end, (2) middle cost and (3) affordable. Out of 33 residential projects, 17 are
classified as middle cost housing, nine are classified as high-end while the rest are categorized as affordable.
The residential market is dominated mostly by middle cost housing, holding the most number of projects. This
can be an indication that the markets buying capacity is in line with the middle cost level.
Out of the total units offered in the market, 65% of which are currently sold and only 35% are available in the
market as of the first quarter of 2016.

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B. Office Market

In Mindanao, the declaration of Pueblo de Oro in CDO as the first IT-park started the BPO industry in the city.
Foreign companies were further reinforced to gain interest when Tholons, an international consultancy firm,
has recognized several cities in the country as some of the best outsourcing destinations in the world.
Furthermore, the presence of training institutions in Mindanao can provide a continuous supply of workers to
assure that BPO Industry to thrive very well in CDO.

Most importantly, the local government unit has recognized the potential of the area in job generation of
BPOs and other ICT-related business hence it has now boarded on an aggressive stance in promoting the area
to both foreign and local investors and has enacted IT-specific local incentives and full personalized support to
potential locators in the city.

Office establishments in CDO

Pueblo de Oro IT Park

It is a 20-hectare IT park, said to be the only PEZA-registered IT park in Mindanao, is located in the heart of
the 360-hectare Pueblo de Oro Township. It lies along Masterson Avenue, a national road and is only five
kilometers away from the city center. The said development is seen to attract tenants from the IT-services such
as content development, research and development services, hardware design and others.

Georgetown Cybermall

Georgetown Cybermall is a mixed-use development with a 2,000-sq.m. space allotted for BPO and IT
Businesses. It is located in R.N. Pelaez Boulevard, Kauswagan, CDO, just a few meters away from the center
of the city. At the moment, several retail locators can be seen like Jollibee, Mercury Drug, Goldilocks and
Banco de Oro.

Robinsons Cagayan de Oro

It is located within Limketkai Complex and is currently applying for PEZA accreditation as an IT Building to
use its 18,450 sq.m. area as location for BPO and IT Businesses.

Table 12. Profile of BPO Locators in Cagayan de Oro City

Year No. of
Started Employees
Company
Syntactics 2000 Location
Egmedio Bldg., Corrales St. 61
Concentrix Corporation 2005 Pueblo de Oro IT Park, Balulang 1,000+
Redlemon Digital 2011 St. Gregory Bldg., Nazareth 36
Media
Arriba Telecontact, Inc. 2011
2005 St. GregoryRd.,
Macajalar Bldg., Nazareth
Lapasan 36 70
FBC Worldwide Business 2001 Capitol University Compound, Corrales 150
Solutions, Inc. St.
Cleversoft, Inc. 2010 Masterson Ave, Balulang 23
Webnified 2014 Southbank Plaza 6
Optimum Outsource Kauswagan
Partners Inc.
Accolade Resources Inc. 2014
2012 Macajalar Rd., Lapasan --
Innovuze Solutions Inc. 2013 PCG, Capistrano-Macahambus Sts. 43
Source: Santos Knight Frank

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At present, there are more than 15 registered BPO companies located around CDO. They offer different BPO
services both local and international such as medical transcription, website development and hosting,
telemarketing, online advertising, technical support, and customer services. The trend that IT-BPO operations
in CDO are consistent for the past years only shows that the area is a feasible location for BPO operations.

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 BOARD OF DIRECTORS AND SENIOR MANAGEMENT

DIRECTORS, EXECUTIVE OFFICERS & KEY PERSONNEL

The overall management and supervision of the Company is vested in its board of directors. The Companys
officers and management team cooperate with its Board by preparing relevant information and documents
concerning the Companys business operations, financial condition and results of operations for its review and
action. At present, the Board consists of nine members, including three independent directors in accordance
with the requirements of the SRC and the SECs New Code of Corporate Governance for Publicly Listed
Companies. All of the Companys directors, except for its independent directors, were elected at the
Companys annual stockholders meeting held on July 1, 2016 and will continue to serve as such until the next
annual stockholders meeting or until their successors have been duly elected and qualified. Messrs. Jesus N.
Alcordo and Rufino Luis Manotok, and Ms. Ma. Aurora D. Geotina-Garcia, the Companys independent
directors, were elected on February 2, 2017 and will continue to serve as such until the next annual
stockholders meeting or until their successors have been duly elected and qualified in accordance with the
requirements of the SRC.

Members of the Board of Directors

Information on each member of the Companys Board of Directors as of the date of this Prospectus is set out in
the table below.

Name Age Position Citizenship

Jose R. Soberano III 60 Chairman of the Board, CEO and President Filipino

Ma. Rosario B. Soberano 58 Director, Treasurer and Executive Vice- Filipino

President

Jose P. Soberano, Jr. 86 Director and Corporate Secretary Filipino

Jose Franco B. Soberano 30 Director, Chief Operating Officer and Filipino

Senior Vice-President

Joanna Marie B. Soberano 29 Director Filipino

Janella Mae B. Soberano 25 Director Filipino

Jesus N. Alcordo 80 Independent Director Filipino

Rufino Luis Manotok 66 Independent Director Filipino

Ma. Aurora D, Geotina-Garcia 64 Independent Director Filipino

The business experience of each of the Companys directors for the past five years are described below. As of
the date of the Prospectus, except Messrs. Jesus N. Alcordo and Rufino Luis Manotok, none of the directors
serve in the board of other reporting companies.

Jose R. Soberano III, 60, Filipino, has been the Companys Chairman, CEO and President since its
incorporation. He obtained a Bachelor of Arts degree in Economics from the Ateneo De Manila University in
1976, and completed the Strategic Business Economics Program at the University of Asia and Pacific in 2000.
In 2015, he completed the Advanced Management Development Program in Real Estate from the Harvard
University Graduate School. He previously worked for the Ayala Group of Companies for over 23 years,
including various stints in Ayala Investment, Bank of the Philippine Islands, and in Ayala Land. Inc., where he
was appointed Senior Division Manager in 1997. He was Vice-President of Cebu Holdings, Inc., the pioneer
Ayala Land subsidiary in Cebu City when he resigned in 2000 from Ayala. He served as President of the
Rotary Club of Cebu 2011, and President of the Chamber of Real Estate Builders Association-Cebu (CREBA-

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Cebu) in 2010. He is currently Chairman of the Board of the Center for Technology and Enterprise, a socially-
oriented instruction that offers technical training to less privileged youth. Mr. Jose R. Soberano III has more
than 20 years of experience in managing and heading companies engaged in real estate development.

Ma. Rosario B. Soberano, 58, Filipino, has served as the Director, Treasurer and Executive Vice President of
the Company since 2003. Ms. Ma. Rosario B. Soberano received a Bachelor of Science major in Accountancy
degree (1979, summa cum laude) from St. Theresas College in Cebu, and is a certified public accountant. She
obtained a Masters Degree in Business Administration from the University of the Philippines Cebu in 1983.

Jose Franco B. Soberano, 30, Filipino, has served as Director of the Company since 2010 and joined the
Company as Chief Operating Officer and Senior Vice-President in 2010. He received a Bachelor of Science
degree in Management, major in Legal Management and minor in Finance, from the Ateneo de Manila
University in 2007. In 2012, he obtained a Masters Degree in Real Estate Development from Columbia
University in New York City. Prior to joining the Company, he was a project manager at Hewlett-Packard Asia
Pacific (HK). Ltd. He is a founding member of the Global Shapers Cebu Hub, an initiative of the World
Economic Forum and is President of the Sacred Heart School Ateneo de Cebu Alumni Association since
2014.

Jose P. Soberano, Jr., 86, Filipino, has served as Director of the Company since 2003. He also serves as
Corporate Secretary. He obtained his A.B. in Jurisprudence and Bachelor of Laws in 1953 from the University
of Southern Philippines. He was a practicing private lawyer since 1953 to 1959. Mr. Jose P. Soberano, Jr. was
appointed Regional Trial Court Judge from 1989 until he retired in 2000. Presently he is back into private
practice of law after his retirement as RTC Judge in 2000.

Joanna Marie B. Soberano, 29, Filipino, has served as Director of the Company since 2010, and joined the
Company as Vice President and Marketing Director in July 2016. She earned from the University of Asia and
the Pacific both her Bachelor and Master of Arts in Communication, Major in Integrated Marketing
Communication in 2008 and 2009 respectively. She was Top 1 of her Batch 2008. Prior to joining the
Company, she was a Marketing Manager of the Global Team of Nestle based in Switzerland from June 2014 to
August 2015 and was Marketing Project Manager based in Thailand from August 2015 to June 2016. In
October 2013 to May 2014, she worked as a Marketing Manager of Nestle Philippines.

Janella Mae B. Soberano, 25, Filipino, has served as Director of the Company starting January 2010, and
joined the Company as Marketing Manager. She earned her Bachelor Arts in Humanities, major in Marketing
Communications degree from the University of Asia and the Pacific in 2009]. Prior to joining the Company,
she was a Brand Management Associate of United Laboratories, Inc. from 2013 to 2016.

Jesus N. Alcordo, 80, Filipino, joined as one of the Companys Independent Directors in February 2017. He
was conferred Doctor of Technology and Environment, Honoris Causa, by University of San Carlos in 2011.
He also earned from the same university Bachelor of Science in Chemical Engineering in 1961. He finished
the Executive Program in Business Administration of Columbia University in New York in 1975. He is
presently serving as Chairman of the boards of Green Energy Machine Investment Corporation, Sinag Global
Energy Corporation, Enerplus Inc. Among his directorships are with Filinvest Development Corporation, FDC
Utilities, Inc, and Countrywide Water Services, Inc. He was formerly the President of FDC Utilities,
Incorporated from 2011 to 2013, President of Global Business Power Corporation from 2007-2010, President
of National Power Corporation in 2001, and East Asia Power Resources Corporation from 1999 to 2006.

Rufino Luis Manotok, 66, Filipino, joined as one of the Companys Independent Directors in February 2017.
He finished Advanced Management Program of Harvard Business School in 1994. He earned his Master of
Business Management degree from the Asian Institute of Management in 1973, and Bachelor of Arts, major in
Economics by Ateneo de Manila University in 1971. He is currently an Independent Director of First Metro
Investment Corporation and was the Chairman and President of Ayala Automotive Holdings Corporation from
2009 to 2012. From 2007 to 2009, he was Ayala Corporations Senior Managing Director, Chief Financial
Officer and Chief Information Officer. He was Managing Director, heading Strategic Planning Group of Ayala
Corporation from 1998 to 2006.

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Ma. Aurora D Geotina-Garcia, 64, Filipino, joined as one of the Companys Independent Directors in
February 2017. She received her Bachelor of Science in Business Administration and Accountancy degree
from the University of the Philippines in 1973. She completed her Master of Business Administration from the
same university in 1978. She headed SGV & Co.s Global Corporate Finance Division from 1992 until her
retirement from the partnership in 2001. She was a Senior Adviser to SGV & Co from the time of her
retirement until September 2006. She has served as a consultant to businesses and the government for over 30
years in the area of corporate finance. She is presently the President of Mageo Consulting Inc. since March
2014 and CIBA Capital Philippines Inc. since December 2008.

Executive Officers

In addition to the directors listed above, the following are the names, ages and citizenship of the Companys
executive officers elected as of the date of this Prospectus.

Name Age Position Citizenship

Jose R. Soberano III 60 President and CEO Filipino
Ma. Rosario B. Soberano 58 Treasurer and Executive Vice-President Filipino

Jose Franco B. Soberano 30 Chief Operating Officer and Senior Vice- Filipino
President

Jose P. Soberano 87 Corporate Secretary Filipino

The business experience for the past five years of each of the Jose R. Soberano III (President and CEO), Ma.
Rosario B. Soberano (Treasurer and Executive Vice-President), Jose Franco B. Soberano (Chief Operating
Officer and Senior Vice-President) and Jose P. Soberano (Corporate Secretary) are set out above, while the
business experience for the past five years of the other Companys executive officers are described below.

Stephen A. Tan, 60, Filipino, is the Chief Finance Officer of the Company. A Certified Public Accountant, he
is a holder of Masters in Business Administration, with distinction, from Katholieke Universiteit te Leuven in
Belgium and Bachelor of Science in Management Engineering from Ateneo de Manila University. He earned
his degree in Accounting from the University of San Carlos. Prior to working with the Company, Tan had
served as Chief Finance Officer of a number of companies like Aboitiz Construction Group, Inc., FBMA
Marine, Inc., Aboitizland, Inc., InfoWeapons Corporation, Pilmico Food Corporation, among others. He is also
a part-time instructor for more than 30 years, having taught at the University of San Carlos and University of
the Philippines.

Larri-Nil G. Veloso, 38, Filipino, is the Assistant Vice-President for Legal, Documentation, Permits and
Licenses departments of the Company, and serves as the Companys Assistant Corporate Secretary and
Compliance Officer. An experienced practitioner in Corporate Law, he holds a B.A. in Mass Communication
from University of the Philippines and earned his Bachelor of Laws from University of Southern Philippines
Foundation. While finishing law school, Atty. Veloso had worked for a print and online newspaper, occupying
various positions in progression from correspondent, staff reporter, copy editor, copywriter, junior editor, group
editor, to managing editor. Prior to joining the Company, he was the Corporate Legal Counsel of InfoWeapons
Corporation, an American-owned software company specializing in networking appliances, and later promoted
as General Manager.

Pedrito A. Capistrano Jr.,53, Filipino, is the Assistant Vice-President for Engineering of the Company. He is a
licensed engineer in the field of Civil Engineering and Geodetic Engineering. He has been working with the
Company since August 2011 when he was hired as Project Manager. In two years, he was promoted to his
present position. His more than 25 years of experience has established for him solid foundation and credibility
in the construction and allied fields. Some of the established companies Mr. Capistrano had worked with were
Filinvest Land Inc., Robinsons Land Corporation, Cebu Industrial Park Developers, Inc., Aboitiz Land, Inc.
and Aboitiz Construction Group, Inc. He finished his Bachelor of Science degree in Civil Engineering at Cebu

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Institute of Technology University in Cebu City and earned his Master of Science in Management Engineering
from University of the Visayas also in Cebu City.

Connie N. Guieb, 38, Filipino, has been the Assistant Vice President for Finance and Accounting of the
Company since June 2014. She also serves as the Financial Comptroller. She has more than 15 years of
accountancy and finance experience in various industries in both public and private sectors in the Philippines.
She graduated cum laude with a Bachelor of Science in Accountancy degree from the University of San Carlos,
and Bachelor of Laws from the University of Cebu. She is a Certified Public Accountant.

Marie Rose C. Yulo,48, Filipino, is the Companys Assistant Vice President for Sales. Prior to this, she was
the Assistant Vice-President for both Sales and Marketing since March 2011 until August 2016 when the
Company spun off its marketing unit as a separate department to provide focused attention to the equally
challenging marketing and branding initiative of the Company. Ms. Yulo also has significant experience in the
areas of travel and tours and banking, and has worked with AB Soberano, an affiliate of the Company and a
well-known local producer of jewelry products for international market. She completed her Bachelor of
Science degree in Business Administration at the University of San Carlos and earned units of Masters in
Business Administration from the University of the Visayas.

Macario P. Balali, 54, Filipino, is the Assistant Vice President for Human Resources and Administration of the
Company. He joined the Company in July 2015. Prior to joining to the Company, Mr. Balali worked in big
companies such as Aboitiz Power Corporation, East Asia Utilities Corporation & National Steel Corporation.
He has more than 25 years of experience in the field of human resource. He also occupied managerial/executive
positions in administration, and purchasing and logistics. Furthermore, Mr. Balali is teaching Master of
Business Administration subjects at the University of San Jose-Recoletos in Cebu City. He earned his Bachelor
of Science in Chemical Engineering and Master in Management for Executives & Managers (MMExM) from
the University of San Jose-Recoletos.

Dennis R. H. Alcarez, 44, Filipino, has been the Companys Head of Business Development for horizontal
projects since January 2013. Before joining the Company, Mr. Alcarez handled key positions in the fields of
financial/ budget analysis, corporate planning, project development and project management. Prior to joining
the Company, he was the Assistant Manager for Project Management of Aboitiz Land, Inc. He is a graduate of
Bachelor of Science in Business Management from the University of the Philippines.

Sylvan John M. Monzon, 41, Filipino, joined the Company in August 2016 as the Head of Business
Development for vertical projects. Previously, he held various positions in the same industry for more than 20
years, such as Project Development Assistant Supervisor of Cebu Holdings, Inc., Assistant Chief Operating
Officer of Ortigas and Company Limited Partnership, and as Head of Business Development of Ortigas and
Company Holdings Inc. Mr. Monzon graduated with a B.S. in Business Management from University of Asia
and the Pacific in Pasig City, Philippines. He also earned a Certificate in Business Economics from the same
university. Presently, he is the President of Toastmasters Club in Cebu.

Significant Employees

While the Company values the contribution of each executive and non-executive employee, there is no non-
executive employee whose resignation or termination of employment would have a significant adverse effect
on the business of the Company. Other than standard employment contracts and except as otherwise disclosed
in this Prospectus, there are no arrangements with non-executive employees that will assure the continued stay
of these employees with the Company.

Family Relationships

As of the date of this prospectus, family relationships (by consanguinity or affinity within the fourth civil
degree) between Directors and members of the Companys senior management are as follows:

1. Ma. Rosario B. Soberano (Director, Treasurer and Executive Vice-President) is the spouse of Jose R.
Soberano III (Chairman of the Board, CEO and President).

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2. Jose Franco B. Soberano (Director, Chief Operating Officer and Senior Vice-President), Joanna Marie
B. Soberano (Director and Marketing Director) and Janella Mare B. Soberano (Director) are the
children of Ma. Rosario B. Soberano (Director, Treasurer and Executive Vice-President) and of Jose
R. Soberano III (Chairman of the Board, CEO and President).

3. Jose P. Soberano, Jr. (Director and Corporate Secretary) is the father of Jose R. Soberano III
(Chairman of the Board, CEO and President) and the grandfather of Jose Franco B. Soberano
(Director, Chief Operating Officer and Senior Vice-President), Joanna Marie B. Soberano (Director
and Marketing Director) and Janella Mare B. Soberano (Director).

4. Alana O. Soberano (Treasury Manager of the Company) is the wife of Jose Franco B. Soberano
(Director, Chief Operating Officer and Senior Vice-President) and the daughter-in-law of Jose R.
Soberano III (Chairman of the Board, CEO and President) and Ma. Rosario B. Soberano (Director,
Treasurer and Executive Vice-President).

Apart from the foregoing, there are no other family relationships up to the fourth civil degree either by
consanguinity or affinity among directors or executive officers of the Company.

Involvement in Certain Legal Proceedings

To the best of the Companys knowledge and belief and after due inquiry, none of the Companys directors,
nominees for election as director or executive officers have in the past five years up to the date of this
Prospectus been involved in or subject to:

1. Any bankruptcy petition filed by or against any business of which such person was a general partner
or executive officer either at the time of the bankruptcy or within two years prior to that time;

2. Any conviction by final judgment, including the nature of the offense, in a criminal proceeding,
domestic or foreign, or being subject to a pending criminal proceeding, domestic or foreign, excluding
traffic violations and other minor offenses;

3. Any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of
competent jurisdiction, domestic or foreign, permanently or temporarily enjoining, barring,
suspending or otherwise limiting his involvement in any type of business, securities, commodities or
banking activities; and

4. Being found by a domestic or foreign court of competent jurisdiction (in a civil action), the SEC or
comparable foreign body, or a domestic or foreign exchange or other organized trading market or self-
regulatory organization, to have violated a securities or commodities law or regulation, and the
judgment has not been reversed, suspended, or vacated.

EXECUTIVE COMPENSATION

Compensation of Directors

The By-Laws of the Company provide that the Directors shall receive such compensation as may be
determined by the Board of Directors, subject to the approval by affirmative vote of the stockholders
representing at least a majority of the outstanding capital stock, and to the limitations provided under Section
30 of the Corporation Code.

There are currently no standard arrangements or resolutions adopted, pursuant to which Directors of the
Company are compensated, or are to be compensated, directly or indirectly, for any services provided as a
Director.

Executive Compensation

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The following table sets out the Companys President and CEO and the four most highly compensated senior
officers as of the date of this Prospectus:

Name Position
Jose R. Soberano III Chief Executive Officer
Ma. Rosario B. Soberano Executive Vice-President
Jose Franco B. Soberano Senior Vice-President & Chief Operating Officer
Stephen A. Tan Chief Financial Officer
Joanna Marie B. Soberano Vice-President & Marketing Director

The following table identifies and summarizes the aggregate compensation of the Companys President CEO
and the four most highly compensated executive officers, and all other officers and directors as a group, for the
years ended December 31, 2016, 2015 and 2014.

Other
Basic Compensation Compensation
Year (in P) (in P)

President and CEO and the four most

highly compensated executive officers
named above. 2016 12,759,288.00 2,557,551.19
2015 11,687,384.00 2,220,876.50
2014 10,860,921.60 2,680,963.76

Each of the executive officers named above executed an employment contract with the Company and is entitled
to receive retirement benefits in accordance with the terms and conditions of the Companys retirement plan.

No bonuses have been declared for the Board of Directors for the last two years. For the ensuing year, the
amount of bonuses to be received by the members of the Board of Directors has yet to be approved by it.

There is no plan or arrangement by which the executive officers will receive from the Company any form of
compensation in case of a change in control of the Company or change in the officers responsibilities
following such change in control.

As of the date of this Prospectus, there are no outstanding warrants or options held by the Companys chief
executive officer, the named executive officers, and all officers and directors as a group.

MANUAL ON CORPORATE GOVERNANCE

The Company has a Manual on Corporate Governance (Manual) approved by the Board of Directors on
January 6, 2016. The Manual has been submitted to the SEC in compliance with the Code of Corporate
Governance for Publicly-Listed Companies SEC Memorandum Circular No. 19 Series of 2016.

The Company's policy on corporate governance is based on its Manual. The Manual lays down the principles of
good corporate governance in the entire organization. The Manual provides that it is the Boards responsibility
to initiate compliance with the principles of good corporate governance, to foster the long-term success of the
Company and to secure its sustained competitiveness in a manner consistent with its fiduciary responsibility,
which it shall exercise in the best interest of the Company, its shareholders and other stakeholders.

Corporate Governance

The Company is committed to doing business in accordance with the highest professional standards, business
conduct and ethics and all applicable laws, rules, and regulations in the Philippines. The Company, its
directors, officers, and employees are dedicated to promote and adhere to the principles of good corporate

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governance by observing and maintaining its core business principles of accountability, integrity, fairness, and
transparency.

Independent Directors

Philippine regulations require the Company to have at least three independent directors in its Board of
Directors, or such number as to constitute at least one-third of the members of the Board, whichever is higher.
The Companys Board of Directors is composed of nine members, six of whom are regular directors and three
are independent directors. The Companys independent directors are Messrs. Jesus N. Alcordo and Rufino Luis
Manotok, and Ms. Ma. Aurora D. Geotina-Garcia. Independent directors must hold no interests or relationships
with the Company that may hinder their independence from the Company or its management, or which would
interfere with the exercise of independent judgment in carrying out the responsibilities of a director.

Under the SEC Revised Code of Corporate Governance, independent directors should always attend Board
meetings. Unless otherwise provided in the by-laws, their absence shall not affect the quorum requirement. The
By-Laws of the Company do not provide for such quorum requirement. However, pursuant to the Companys
Manual, to promote transparency, the Board requires the presence of at least one independent director in all its
meetings.

Compliance Officer

The Board shall appoint a Compliance Officer who shall be a member of the Companys management team and
will be in charge of the compliance function. The Compliance Officer should not be a member of the Board and
should be different from the Corporate Secretary. He shall have the rank of Senior Vice President or an
equivalent position with adequate stature and authority in the Company. The Compliance Officer is primarily
liable to the Company and its shareholders, and not to its Chairman or President. Among others, he shall have
the following duties and responsibilities:

1) Ensure proper onboarding of new directors (i.e., orientation on the Companys business, charter,
articles of incorporation and by-laws, among others);

2) Monitor, review, evaluate and ensure the compliance by the Company, its officers and directors with
the relevant laws, this Code, rules and regulations and all governance issuances of regulatory agencies;

3) Report the matter to the Board if violations are found and recommend the imposition of appropriate
disciplinary action;

4) Ensure the integrity and accuracy of all documentary submissions to regulators;

5) Appear before the SEC when summoned in relation to compliance with this Code;

6) Collaborate with other departments to properly address compliance issues, which may be subject to
investigation;

7) Identify possible areas of compliance issues and work towards the resolution of the same;

8) Ensure the attendance of board members and key officers to relevant trainings; and

9) Perform such other duties and responsibilities as may be provided by the SEC.

Chief Audit Officer

The Chief Audit Officer, who is appointed by the Board, directly reports functionally to the Audit Committee
and administratively to the Chief Executive Officer. He shall oversee and be responsible for the internal audit
activity of the Company, including that portion that is outsourced to a third party service provider.

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Resolving Stockholders Disputes

Stockholders who have matters for discussion or concerns directly resulting to the business of the Company
may initially elevate such matters or concerns to: (a) the Corporate Secretary; (b) the Investor Relations
Officer; (c) Management; or (d) the Board.

Committees of the Board24

The Board of Directors has constituted certain committees to effectively manage the operations of the
Company. The Companys principal committees include the Audit Committee, Nomination Committee,
Compensation and Remuneration Committee, and the Corporate Governance Committee. A brief description of
the functions and responsibilities of the key committees are set out below:

A. Audit Committee

The Audit Committee shall be composed of at least three board members, preferably with accounting and
finance background, one of whom shall be an independent director and another should have related audit
experience. The Chairman of this Committee should be an independent director. He should be responsible for
inculcating in the minds of the Board Members the importance of management responsibilities in maintaining a
sound system of internal control and the Boards oversight responsibility.

The Audit Committee shall perform the following functions:

1) Assist the Board in the performance of its oversight responsibility for the financial reporting process,
system of internal control, internal and external audit process, and monitoring of compliance with
applicable laws, rules and regulations.

2) Recommend the approval the Internal Audit Charter (IA Charter), which formally defines the role
of Internal Audit and the audit plan as well as oversees the implementation of the IA Charter;

3) Through the Internal Audit (IA) Department, monitor and evaluate the adequacy and effectiveness
of the Companys internal control system, integrity of financial reporting, and security of physical and
information assets.

4) Oversee the Internal Audit Department, and recommends the appointment and/or grounds for approval
of an internal audit head or Chief Audit Officer. The Audit Committee should also approve the terms
and conditions for outsourcing internal audit services;

5) Establish and identify the reporting line of the internal auditor to enable him to properly fulfill his
duties and responsibilities. For this purpose, he should directly report to the Audit Committee;

6) Review and monitor managements responsiveness to the internal auditors findings and
recommendations;

7) Prior to the commencement of the audit, discuss with the external auditor the nature, scope and
expenses of the audit, and ensure the proper coordination if more than one audit firm is involved in the
activity to secure proper coverage and minimize duplication of efforts;

8) Evaluate and determine the non-audit work, if any, of the external auditor, and periodically review the
non-audit fees paid to the external auditor in relation to the total fees paid to him and to the
Companys overall consultancy expenses. The committee should disallow any non-audit work that
will conflict with his duties as an external auditor or may pose a threat to his independence.

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 9) Review and approves the interim and annual financial statements before their submission to the Board,
with particular focus on the following matters:

10) Review the disposition of the recommendations in the external auditors management letter;

11) Perform oversight functions over the Companys internal and external auditors. It ensures the
independence of internal and external auditors, and that both auditors are given unrestricted access to
all records, properties and personnel to enable them to perform their respective audit functions;

12) Coordinate, monitor and facilitate compliance with laws, rules and regulations;

13) Recommend to the Board the appointment, reappointment, removal and fees of the external auditor,
duly accredited by the SEC, who undertakes an independent audit of the Company, and provides an
objective assurance on the manner by which the financial statements should be prepared and presented
to the stockholders; and

14) Oversee the implementation of the risk management and related party strategies and policies,
including but not limited to the following:

i. Evaluate on an ongoing basis existing relations between and among businesses and
counterparties to ensure that all related parties are continuously identified, related party
transactions (RPTs) are monitored, and subsequent changes in relationships with counter-
parties (from non-related to related and vice versa) are captured.

ii. Evaluate all material RPTs to ensure that these are not undertaken on more favorable economic
terms (e.g., price, commissions, interest rates, fees, tenor, collateral requirement) to such related
parties than similar transactions with nonrelated parties under similar circumstances and that no
corporate or business resources of the Company are misappropriated or misapplied, and to
determine any potential reputational risk issues that may arise as a result of or in connection with
the transactions.

iii. Ensure that appropriate disclosure is made, and/or information is provided to regulating and
supervising authorities relating to the Companys RPT exposures, and policies on conflicts of
interest or potential conflicts of interest.

iv. Report to the Board of Directors on a regular basis, the status and aggregate exposures to each
related party, as well as the total amount of exposures to all related parties;

v. Ensure that transactions with related parties, including write-off of exposures are subject to a
periodic independent review or audit process; and

vi. Oversee the implementation of the system for identifying, monitoring, measuring, controlling,
and reporting RPTs, including a periodic review of RPT policies and procedures.

B. Nomination Committee

The Nomination Committee of the Board shall have at least three members, one of whom shall be an
independent director. The Nomination Committee shall review and evaluate the qualifications of all individuals
nominated to the Board and other appointments that require Board approval, and to assess the effectiveness of
the Boards processes and procedures in the election or replacement of directors.

The nomination and election process also includes the review and evaluation of the qualifications of all persons
nominated to the Board, including whether candidates: (1) possess the knowledge, skills, experience, and
particularly in the case of non-executive directors, independence of mind given their responsibilities to the
Board and in light of the entitys business and risk profile; (2) have a record of integrity and good repute; (3)

141
have sufficient time to carry out their responsibilities; and (4) have the ability to promote a smooth interaction
between board members.

Only a stockholder of record entitled to notice and to vote at the regular or special meeting of the stockholders
for the election of directors shall be qualified to be nominated and elected as a director of the Company.

C. Compensation and Remuneration Committee

The Board shall constitute a Compensation and Remuneration Committee which shall be composed of at least
three (3) members, one (1) of whom must be an independent director. It shall have the following duties and
responsibilities:

1) Establish a formal and transparent procedure for developing a policy on executive remuneration and
for fixing the remuneration packages of corporate officers and directors, and provide oversight over
remuneration of senior management and other key personnel ensuring that compensation is consistent
with the Companys culture, strategy and the business environment in which it operates;

2) Design the amount of remuneration, which shall be in a sufficient level to attract and retain directors
and officers who are needed to run the Company successfully; and

3) Review the existing Human Resources Development or Personnel Handbook, to strengthen provisions
on conflict of interest, salaries and benefits policies, promotion and career advancement directives and
compliance of personnel concerned with all statutory requirements that must be periodically met.

D. Corporate Governance Committee

The Corporate Governance Committee shall consist of three directors, one of whom must be an independent
director. Among other functions that may be delegated by the Board, the Committee shall be responsible for the
following:

1) Overseeing the implementation of the corporate governance framework and periodically reviews the
said framework to ensure that it remains appropriate in light of material changes to the Companys
size, complexity and business strategy, as well as its business and regulatory environments;

2) Overseeing the periodic performance evaluation of the Board and its committees as well as executive
management, and conducts an annual self-evaluation of its performance;

3) Ensuring that the results of the Board evaluation are shared, discussed, and that concrete action plans
are developed and implemented to address the identified areas for improvement

4) Recommending continuing education/training programs for directors, assignment of tasks/projects to

board committees, succession plan for the board members and senior officers, and remuneration
packages for corporate and individual performance;

5) Adopting corporate governance policies and ensure that these are reviewed and updated regularly, and
consistently implemented in form and substance;

6) Proposing and planning relevant trainings for the members of the Board;

7) Determining the nomination and election process for the Companys directors and has the special duty
of defining the general profile of board members that the Company may need and ensuring appropriate
knowledge, competencies and expertise that complement the existing skills of the Board; and

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 8) Establishing a formal and transparent procedure to develop a policy for determining the remuneration
of directors and officers that is consistent with the Companys culture and strategy as well as the
business environment in which it operates.

Penalties for Non-compliance with the Manual on Corporate Governance

In case of violation of any of the provisions of the Manual on Corporate Governance, the following penalties
shall be imposed, after due notice and hearing, on the Companys directors, officers, and employees:

1) First Violation reprimand;

2) Second Violation suspension from office, the duration of which shall depend on the gravity of the
violation; and
3) Third Violation removal from office.

The Compliance Officer shall be responsible for determining violation/s through notice and hearing and shall
recommend to the Chairman of the Board the imposable penalty for such violation, for further review and
approval of the Board.

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 RELATED PARTY TRANSACTIONS

The Company from time to time engages in transactions with related parties and affiliates.

The Companys related parties include its majority shareholder, AB Soberano, entities under common
ownership, homeowners associations and condominium corporations (HACC), associates, joint ventures,
shareholders, and key management personnel.

As of the date of this prospectus, the Company has outstanding related party balances with its joint ventures,
with HACCs, and with key management personnel. The Company has no outstanding related party balances
with any of its shareholders.

The cash advances are non-interest bearing, unsecured, due on demand and are expected to be settled within
one year from end of the reporting period.

The Company adheres to general rules on transfer pricing and endeavors to keep related-party transactions at
arms length consistent with prevailing BIR and other government regulations. When selling properties to key
managers and employees, prices are based on prevailing pricelists offered to third party buyers. The Company
also benchmarks selling prices of latest comparable transactions approved by the BIR before disposing of any
of its assets to related parties.

In 2015 and 2014, AB Soberano charged the Company for its usage of a portion of the office compound owned
by the former. For this transaction, rent expense amounted to P339,916 for the year 2015 and P395,680 for the
year 2014. This is shown as part of rent expense in the respective financial statements. The rental rates were
determined using comparable office leases and annual escalation rates in the general area where the office
compound is located.

In 2016, the Company sold a parcel of land and condominium units in cash to AB Soberano with a total
contract price of P32.27 million. The Company realized a net gain of on these transactions amounting to P4.76
million and are presented as Other Gains in the financial statements.

The Company also sold a parcel of land in cash to BL Ventures with a selling price of P45.64 million. The sale
was recorded as part of sale of real estate in the consolidated statement of profit or loss for the year ended
December 31, 2016 and the outstanding receivable of P48.83 million is recorded as part of contracts
receivables under the receivables account in the 2016 consolidated statement of financial position. In 2015, AB
Soberano sold a parcel of land to the Company with a contract price of P28 million for a future project. The
said transaction resulted in a decrease in advances from related parties because advances from a related party
corresponding to the contract price is applied as payment for the asset. The foregoing sale used the latest prices
of comparable transactions approved by the BIR for similar parcels of land within the general proximity of
these Company assets.

In January 2015, the Company transferred to AB Soberano for P1.05 million payable in the year of transfer, all
of its acquired rights from its acquisition of a franchise of a coffee company in 2014. The sale covered only the
rights and privileges to operate the franchise, but did not include the sale of the equipment, furniture, and
fixtures used in the coffee shop, which were all retained by the Company and leased to AB Soberano at
P88,000 per month. The coffee shop likewise leased the premises owned by Company at the rate of P62,000 a
month, which rate was based on comparable commercial leases in the area. There is no similar transaction in
2016. There are no outstanding balance pertaining to this transaction at December 31, 2016 and 2015.

Certain loans are collateralized by real estate mortgage on real properties owned by the major stockholders at
no cost to the Company.

In 2016 and 2015, the Company sold condominium units totaling P48.7 million and P29.52 million,
respectively, to key management personnel. Outstanding balance related to these transactions amounts to
P48.93 million and P26.91 million as at December 31, 2016 and 2015, respectively. These are presented as part

144
of contracts receivables under the receivables account in the statements of financial position. The prices used
for these transactions were all based on the pricelist prevailing and applicable to any other third party buyer at
the time of sale.

Aside from the foregoing, there are no other transactions with parties that fall outside the definition of related
parties under applicable accounting standards, but with whom the Company or its related parties have a
relationship as to enable the parties to negotiate terms of material transactions not available from other clearly
independent parties on an arms length basis.

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 THE PHILIPPINE STOCK MARKET

THE EXCHANGE

The Philippine Stock Exchange (PSE) is the only stock exchange in the Philippines. It is one of the oldest stock
exchanges in Asia, having been in continuous operation since the establishment of the Manila Stock Exchange
in 1927. It currently maintains two trading floors, one at the PSE Centre (Tektite), Ortigas Center in Pasig City,
and another at its principal office at the Ayala Tower One in Makati Citys Central Business District. The PSE
is composed of a 15-man Board of Directors with Jose T. Pardo as Chairman.

Trading in the PSE is a continuous session from 9:30AM to 3:30PM daily with a recess from 12:00PM to
1:30PM.

History

The Philippine Stock Exchange was formed from the countrys two former stock exchanges, the Manila Stock
Exchange (MSE), which was established on August 8, 1927, and the Makati Stock Exchange (MkSE),
which was established on May 27, 1963.

Although both the MSE and the MkSE traded the same stocks of the same companies, the bourses were
separate stock exchanges for nearly 30 years until December 23, 1992, when both exchanges were unified to
become the present-day PSE.

In June 1998, the SEC granted the PSE a "Self-Regulatory Organization" (SRO) status, which meant that the
bourse can implement its own rules and establish penalties on erring trading participants (TPs) and listed
companies. In 2011, Capital Market Integrity Corporation was incorporated to function as the independent
audit, surveillance and compliance arm of PSE. The mandate of CMIC is to ensure that trading participants
adhere to all pertinent rules, regulations, and code of conduct of CMIC and PSE, as well as all related
legislative and regulatory requirements.

In 2001, one year after the enactment of the SRC, the PSE was transformed from a non-profit, non-stock,
member-governed organization into a shareholder-based, revenue-earning corporation headed by a president
and a board of directors. The PSE eventually listed its own shares on the exchange (traded under the ticker
symbol PSE) by way of introduction on December 15, 2003.

PSEi

The main index for PSE is the PSEi, which is a capitalization-weighted index composed of stocks
representative of the Industrial, Properties, Services, Holding Firms, Financial and Mining & Oil Sectors of the
PSE. It measures the relative changes in the free float-adjusted market capitalization of the 30 largest and most
active common stocks listed at the PSE. The selection of companies in the PSEi is based on a specific set of
public float, liquidity and market capitalization criteria. There are also six sector-based indices as well as a
broader all shares index.

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Selected Stock Exchange Data

The table below sets forth movements in the composite index from 1995 to 2016 and shows the number of
listed companies, market capitalization and value of shares traded for the same period:

Year Composite Index Number of Listed Aggregate Market Combined Value

at Closing Companies Capitalization (in of Turnover (in
billions) billions)
1995 2,594.2 205 1,545.7 379.0
1996 3,170.6 216 2,121.1 668.9
1997 1,869.2 221 1,261.3 588.0
1998 1,968.8 221 1,373.7 378.9
1999 2,142.9 223 1,936.5 668.8
2000 1,494.5 226 2,576.5 58.61
2001 1,168.1 228 2,143.3 407.2
2002 1,014.4 232 2,083.2 780.9
2003 1,442.4 235 2,973.8 357.6
2004 1,822.8 236 4,766.2 206.6
2005 2,096.0 237 5,948.4 383.5
2006 2,982.5 240 4,277.8 1,145.3
2007 3,621.6 244 7,977.6 1,338.3
2008 1,872.9 246 4,069.2 763.9
2009 3,052.7 248 6,029.1 994.2
2010 4,201.1 253 8,866.1 1,207.4
2011 4,372.0 253 8,697.0 1,422.6
2012 5,812.7 268 10,850 1,420
2013 5,889.8 257 11,931.3 2,546.3
2014 7,230.6 263 14,251.7 2,130.1
2015 6,952.1 216 13,465.1 2,172.5
2016 7,796.2 264 15,253.5 931.7
Source: PSE

Trading

The PSE is a double auction market. Buyers and sellers are each represented by stock brokers. To trade, bids or
ask prices are posted on the PSEs electronic trading system. A buy (or sell) order that matches the lowest
asked (or highest bid) price is automatically executed. Buy and sell orders received by one broker at the same
price are crossed at the PSE at the indicated price. Transactions are generally invoiced through a confirmation
slip sent to customers on the trade date (or the following trading date). Payment of purchases of listed securities
must be made by the buyer on or before the third trading day (the settlement date) after the trade.

Trading on the PSE starts at 9:30 am until 12:00 pm, after which there will be a one and a half hour lunch
break. In the afternoon, trading resumes at 1:30 p.m. and ends at 3:30 p.m. with a 10-minute extension during
which transactions may be conducted, provided that they are executed at the last traded price and are only for
the purpose of completing unfinished orders. Trading days are Monday to Friday, except legal and special
holidays.

Minimum trading lots range from five to 1,000,000 shares depending on the price range and nature of the
security traded. Odd-sized lots are traded by brokers on a board specifically designed for odd-lot trading.

To maintain stability in the stock market, daily price swings are monitored and regulated. Under current PSE
regulations, when the price of a listed security moves up by 50% or down by 50% in one day (based on the last
traded price), the price of that security is automatically frozen by the PSE, unless there is an official statement
from the relevant company or a government agency justifying such price fluctuation, in which case the affected
security can still be traded but only at the frozen price. If the issuer fails to submit such explanation, a trading

147
halt is imposed by the PSE on the listed security the following day. Resumption of trading will be allowed only
when the disclosure of the issuer is disseminated, subject again to the trading band.

SETTLEMENT

The Securities Clearing Corporation of the Philippines (SCCP) is a wholly-owned subsidiary of the PSE, and
was organized primarily as a clearance and settlement agency for SCCP-eligible trades executed through the
facilities of the PSE. It is responsible for (i) synchronizing the settlement of funds and the transfer of securities
through Delivery versus Payment clearing and settlement of transactions of Clearing Members, who are also
Trading Participants of the Exchange; (ii) guaranteeing the settlement of trades in the event of a Trading
Participants default through the implementation of its Fails Management System and administration of the
Clearing and Trade Guaranty Fund, and; (iii) performance of Risk Management and Monitoring to ensure final
and irrevocable settlement.

SCCP settles PSE trades on a three-day rolling settlement environment, which means that settlement of trades
takes place three days after transaction date (T+3). The deadline for settlement of trades is 12:00 noon of T+3.
Securities sold should be in scripless form and lodged under PDTCs book entry system. Each Trading
Participant maintains a Cash Settlement Account with one of the eight existing Settlement Banks of SCCP
which are BDO, Rizal Commercial Banking Corporation (RCBC), Metrobank, Deutsche Bank AG (Manila
Branch) (Deutsche Bank), Hong Kong and Shanghai Banking Corporation (Manila) (HSBC), Maybank
Philippines, Inc. (Maybank), Union Bank of the Philippines (Unionbank), and Asia United Bank
Corporation (AUB). Payment for securities bought should be in good, cleared funds and should be final and
irrevocable. Settlement is presently on a broker level.

SCCP implemented its new clearing and settlement system called Central Clearing and Central Settlement
(CCCS) last May 29, 2006. CCCS employs multilateral netting whereby the system automatically offsets
buy and sell transactions on a per issue and a per flag basis to arrive at a net receipt or a net delivery
security position for each Clearing Member. All cash debits and credits are also netted into a single net cash
position for each Clearing Member. Novation of the original PSE trade contracts occurs, and SCCP stands
between the original trading parties and becomes the Central Counterparty to each PSE-Eligible trade cleared
through it.

CENTRAL DEPOSITORY

In 1995, PDTC (formerly the Philippine Central Depository, Inc.), was organized to establish a central
depository in the Philippines and introduce scripless or book-entry trading in the Philippines. On December 16,
1996, the PDTC was granted a provisional license by the Philippine SEC to act as a central securities
depository.

All listed securities at the PSE have been converted into book-entry settlement in the PDTC. The depository
service of the PDTC provides the infrastructure for lodgment (deposit) and upliftment (withdrawal) of
securities, pledge of securities, securities lending and borrowing and corporate actions including shareholders
meetings, dividend declarations and rights offerings. The PDTC also provides depository and settlement
services for non-PSE trades of listed equity securities. For transactions on the PSE, the security element of the
trade will be settled through the book-entry system, while the cash element will be settled through the current
settlement banks: RCBC, BDO, Metrobank, Deutsche Bank, HSBC, Maybank, Unionbank, and AUB.

In order to benefit from the book-entry system, securities must be immobilized into the PDTC system through a
process called lodgment. Lodgment is the process by which shareholders transfer legal title (but not beneficial
title) over their shares of stock in favor of PCD Nominee, a corporation wholly owned by the PDTC whose sole
purpose is to act as nominee and legal title holder of all shares of stock lodged into the PDTC.
Immobilization is the process by which the warrant or share certificates of lodging holders are cancelled by
the transfer agent and the corresponding transfer of beneficial ownership of the immobilized shares in the
account of PCD Nominee through the PDTC participant will be recorded in the Issuers registry. This trust
arrangement between the participants and PDTC through PCD Nominee is established by and explained in the
PDTC Rules and Operating Procedures approved by the SEC. No consideration is paid for the transfer of legal

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title to PCD Nominee. Once lodged, transfers of beneficial title of the securities are accomplished via book-
entry settlement.

Under the current PDTC system, only participants (e.g. brokers and custodians) will be recognized by the
PDTC as the beneficial owners of the lodged equity securities. Thus, each beneficial owner of shares, through
his participant, will be the beneficial owner to the extent of the number of shares held by such participant in the
records of the PCD Nominee. All lodgments, trades and uplifts on these shares will have to be coursed through
a participant. Ownership and transfers of beneficial interests in the shares will be reflected, with respect to the
participants aggregate holdings, in the PDTC system, and with respect to each beneficial owners holdings, in
the records of the participants. Beneficial owners are thus advised that in order to exercise their rights as
beneficial owners of the lodged shares, they must rely on their participant-brokers and/or participant-
custodians.

Any beneficial owner of shares who wishes to trade his interests in the shares must course the trade through a
participant. The participant can execute PSE trades and non-PSE trades of lodged equity securities through the
PDTC system. All matched transactions in the PSE trading system will be fed through the SCCP, and into the
PDTC system. Once it is determined on the settlement date (trading date plus three trading days) that there are
adequate securities in the securities settlement account of the participant-seller and adequate cleared funds in
the settlement bank account of the participant-buyer, the PSE trades are automatically settled in the CCCS, in
accordance with the SCCP and PDTC Rules and Operating Procedures. Once settled, the beneficial ownership
of the securities is transferred from the participant-seller to the participant-buyer without the physical transfer
of stock certificates covering the traded securities. If a shareholder wishes to withdraw his shareholdings from
the PDTC System, the PDTC has a procedure of upliftment under which PCD Nominee will transfer back to
the shareholder the legal title to the shares lodged. The uplifting shareholder shall follow the Rules and
Operating Procedure of the PDTC for the upliftment of shares lodged under the name of PCD Nominee. The
transfer agent shall prepare and send a Registry Confirmation Advice to the PDTC covering the new number of
shares lodged under PCD Nominee. The expenses for upliftment are for the account of the uplifting
shareholder.

In the depository set-up, shares are simply immobilized, wherein customers certificates are cancelled and a
confirmation advice is issued in the name of PCD Nominee Corp. Transfers among/between broker and/or
custodian accounts, as the case may be, will only be made within the book-entry system of PDTC. However, as
far as the issuing corporation is concerned, the underlying certificates are in the nominees name. In the registry
set-up, settlement and recording of ownership of traded securities will already be directly made in the
corresponding issuing companys transfer agents books or system. Likewise, recording will already be at the
beneficiary level (whether it be a client or a registered custodian holding securities for its clients), thereby
removing from the broker its current de facto custodianship role.

AMENDED RULE ON LODGMENT OF SECURITIES

On June 24, 2009, the PSE apprised all listed companies and market participants through Memorandum No.
2009-0320 that commencing on July 1, 2009, as a condition for the listing and trading of the securities of an
applicant company, the applicant company shall electronically lodge its registered securities with the PDTC or
any other entity duly authorized by the SEC, without any jumbo or mother certificate, in compliance with the
requirements of Section 43 of the SRC. In compliance with the foregoing requirement, actual listing and
trading of securities on the scheduled listing date shall take effect only after submission by the applicant
company of the documentary requirements stated in Article III Part A of the PSEs Revised Listing Rules.

For listing applications, the amended rule on lodgment of securities is applicable to:

iii. The offer shares/securities of the applicant company in the case of an initial public offering;
iv. The shares/securities that are lodged with the PDTC, or any other entity duly authorized by the
Commission in the case of a listing by way of introduction;
v. New securities to be offered and applied for listing by an existing listed company; and
vi. Additional listing of securities of an existing listed company.

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Pursuant to the said amendment, the PDTC issued an implementing procedure in support thereof to wit:

For new companies to be listed at the PSE as of July 1, 2009 the usual procedure will be observed but
the Transfer Agent of the companies shall no longer issue a certificate to PCD Nominee Corp. but
shall issue a Registry Confirmation Advice, which shall be the basis for the PDTC to credit the
holdings of the Depository Participants on listing date.

For existing listed companies, the PDTC shall wait for the advice of the Transfer Agents that it is
ready to accept surrender of PCNC jumbo certificates and upon such advice the PDTC shall surrender
all PCNC jumbo certificates to the Transfer Agents for cancellation. The Transfer Agents shall issue a
Registry Confirmation Advice to PCNC evidencing the total number of shares registered in the name
of PCNC in the issuers registry as a confirmation date.

AMENDED RULE ON MINIMUM PUBLIC OWNERSHIP

Under the amended rules on minimum public ownership promulgated by the PSE and approved by the SEC,
listed companies are required at all times to maintain a minimum percentage of listed securities held by the
public of 10% of the listed companies issued and outstanding shares, exclusive of any treasury shares, or as
such percentage as may be prescribed by the PSE. The determination of whether shareholdings are considered
public or non-public is based on: (a) the amount of shareholdings and its significance to the total outstanding
shares; (b) purpose of investment; and (c) extent of involvement in the management of the company.

The shares held by the following are generally considered as held by the public: (i) individuals whose shares
are not of significant size and which are non-strategic in nature; (ii) PSE trading participants (such as brokers)
whose shareholdings are non-strategic in nature; (iii) investment funds and mutual funds; (iv) pension funds
which hold shares in companies other than the employing company or its affiliates; (v) PCD Nominee provided
that none of the beneficial owners of the shares has significant holdings (i.e., shareholdings by an owner of
10% or more are excluded and considered non-public); and (vi) Social Security funds.

If an investment in a listed company is meant to partake of sizable shares for the purpose of gaining substantial
influence on how the company is being managed, then the shareholdings of such investor are considered non-
public. Ownership of 10% or more of the total issued and outstanding shares of a listed company is considered
significant holding and therefore non-public.

Listed companies which become non-compliant with the minimum public ownership requirement will be
suspended from trading for a period of not more than six months and will be automatically delisted if it remains
non-compliant with the said requirement after the lapse of the suspension period.

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 REGULATORY FRAMEWORK

Laws on housing and land projects

Presidential Decree No. 957: The Subdivision and Condominium Buyers Protective Decree

Presidential Decree No. 957, or the Subdivision and Condominium Buyers Protective Decree (PD 957), as
amended, is the principal statute regulating the development and sale of real property as part of a condominium
or subdivision project. It was enacted pursuant to the policy of the state to ensure that real estate subdivision
owners, developers, operators, and/or sellers provide and properly maintain roads, drainage, sewerage, water
systems, lighting systems and other similar basic requirements in order to guarantee the health and safety of
home and lot buyers. PD 957 covers condominium and subdivision projects for residential, commercial,
industrial and recreational areas as well as open spaces and other community and public areas in the project.
The Housing and Land Use Regulatory Board (HLURB) is the administrative agency of the government
which, together with local government units, enforces PD 957 and has jurisdiction over real estate trade and
business.

All subdivision and condominium plans for residential, commercial, industrial and other development projects
are required to be filed with and approved by HLURB and relevant local government unit where the project is
situated. Approval of such plans is conditional on, among other things, the developers financial, technical and
administrative capabilities. Before it is approved, the subdivision plan must comply with the Subdivision
Standards and Regulations. On the other hand the condominium plan, in addition to complying with the same
procedure, must also comply with Presidential Decree No. 1096, or the National Building Code, with respect to
the building(s) included in the condominium project. The owner or developer shall submit the condominium
plan in accordance with the requirements of the National Building Code to the building official of the city or
municipality where the property lies and the same shall be acted upon subject to the conditions in accordance
with the procedure prescribed in Section 4 of Republic Act No. 4726, or the Condominium Act.

Alterations of approved condominium plans affecting significant areas of the project, such as infrastructure and
public facilities, also require prior approval of HLURB and the city or municipal engineer.

The development of subdivision and condominium projects can only commence after the relevant government
bodies have issued the required development permit and the necessary building or construction permits in
accordance with the requirements of the city or municipality where the property lies. The issuance of a
development permit is dependent on, among other things: (i) compliance with required project standards and
technical requirements that may differ depending on the nature of the project; and (ii) issuance of the barangay
clearance, the locational and zoning clearance, permits issued by the Department of Environment and Natural
Resources (DENR) such as the Environmental Compliance Certificate (ECC), conversion order or
exemption clearance from the Department of Agrarian Reform (DAR), permit to drill from the National
Water Resources Board, and such other permits and approvals. In cases where the property involved is located
in an area already classified as residential, commercial, industrial or other similar development purposes, a
DAR conversion order shall no longer be required as a precondition for issuance of certificate of registration
and license to sell.

Developers who sell lots or units in a subdivision or a condominium project are required to register the project
with and obtain a license to sell from HLURB. Subdivision or condominium units may only be sold or offered
for sale after a license to sell has been issued by HLURB. Further, to ensure that the owner or developer of a
proposed subdivision or condominium project shows firm commitment to proceed with a project, current
HLURB regulations require minimum developments before the issuance of a license to sell: (a) for subdivision
projects, proof of land clearing and grubbing, road tracing and entrance gate if included in the brochure or
advertisement; and (b) for condominium projects, excavation per approved plan/excavation permit is required.

As a requisite for the issuance of a license to sell, developers are required to file with HLURB any of the
following to guarantee the construction and maintenance of roads, gutters, drainage, sewerage, water system,
lighting systems, and full development of the subdivision or condominium project and compliance with
applicable laws, rules and regulations:

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1. a surety bond equivalent to 20% of the development cost of the unfinished portion of the approved
plan, issued by a duly accredited bonding company (whether private or government), and acceptable
to HLURB;

2. a real estate mortgage executed by the applicant developer as mortgagor in favor of the Republic of
the Philippines, as represented by HLURB as mortgagee over property other than that subject of the
application, free from any liens and encumbrance and provided that the value of the property,
computed on the basis of the zonal valuation of the Bureau of Internal Revenue, shall be at least 20%
of the total development cost; or

3. other forms of security equivalent to 10% of the development cost of the unfinished portion of the
approved plan which may be in the form of the following:

a) a cash bond;
b) a fiduciary deposit made with the cashier and/or disbursing officer of HLURB;
c) a certificate of guaranty deposit issued by any bank or financing institution of good standing
in favor of HLURB for the total development cost;
d) a letter from any bank of recognized standing certifying that so much has been set aside from
the bank account of the developer in favor of HLURB, which amount may be withdrawn by
HLURB at any time the developer fails or refuses to comply with its duties and obligations
under the bond contract; or
e) any irrevocable credit line to be utilized in the development of the project from any bank of
recognized standing and a refinancing re-structuring program indicating sources of funding
from duly accredited funding institutions.

The HLURB is vested with quasi-judicial powers and regulatory functions necessary for the enforcement and
implementation of PD 957. Among these regulatory functions are: (i) regulation of the real estate trade and
business; (ii) registration of subdivision lots and condominium projects; (iii) issuance of license to sell
subdivision lots and condominium units in the registered units; (iv) approval of performance bond and the
suspension of license to sell; (v) registration of dealers, brokers and salesman engaged in the business of selling
subdivision lots or condominium units; (vi) revocation of registration of dealers, brokers, and salesmen; (vii)
approval of mortgage on any subdivision lot or condominium unit made by the owner or developer; (viii)
granting of permits for the alteration of plans and the extension of period for completion of subdivision or
condominium projects; (ix) approval of the conversion to other purposes of roads and open spaces found within
the project which have been donated to the city or municipality concerned; (x) regulation of the relationship
between lessors and lessees; and (xi) hear and decide cases on unsound real estate business practices, claims
involving refund filed against project owners, developers, dealers, brokers or salesmen, and cases of specific
performance.

The HLURB is also authorized, motu proprio or upon verified complaint filed by a buyer of a subdivision lot or
condominium unit, to revoke the registration of any subdivision or condominium project and the license to sell
any subdivision lot or condominium unit in said project upon showing that the owner or dealer:

a) is insolvent;
b) has violated any of the provisions of PD 957, or any applicable rule or regulation of HLURB,
or any undertaking under his/its bond;
c) has been or is engaged or is about to engage in fraudulent transactions;
d) has made any misrepresentation in any preliminary prospectus, brochure, circular, or other
literature about the subdivision project or condominium project that has been distributed to
prospective buyers; or
e) does not conduct his business in accordance with law or sound business principles.

Project permits and licenses to sell may be suspended, cancelled or revoked by the HLURB, by itself or upon a
verified complaint from an interested party, for reasons such as involvement in fraudulent transactions,
misrepresentation, and/or failure to conduct business in accordance with law or sound business principles. A

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license or permit to sell may only be suspended, cancelled or revoked after a written notice to the developer has
been served and all parties have been given an opportunity to be heard in compliance with HLURBs rules of
procedure and other applicable laws.

Pursuant to its regulatory functions, HLURB recently issued Memorandum Circular No. 3, Series of 2016, or
the 2015 Guidelines on Time of Completion (Guidelines). Under the Guidelines, every owner or developer is
required to complete a project, including the construction and provision of amenities and facilities,
improvements, infrastructures and other forms of development such as water supply and electrical facilities,
which are offered and indicated in the approved project plans, brochures, prospectus, printed matters, letters or
any form of advertisement, within one (1) year from the date of the issuance of the license to sell of the project,
or such other period of time as may be fixed by HLURB.

In the case of residential subdivision project with house and lot package, there are separate periods of
completion for land development and house construction. For land development, the work program or program
of development submitted for approval by the owner or developer upon application for the projects Certificate
of Registration and License to Sell shall primarily be the basis for fixing the period of completion. Subdivision
or condominium amenities and facilities included in the approved project plans, brochures, prospectus, printed
matters, letters or any forms of advertisement, should also be developed and completed within the submitted
and approved period for the projects land development.

On the other hand, for projects with housing components, the period of completion and delivery of any housing
unit purchased shall be explicitly provided in the contract to sell or any purchase agreement, and in the absence
of such provision or in case of failure to indicate the same, the period of completion and delivery of the housing
unit shall in no case exceed one (1) year from the date of purchase.

Generally, no extension or additional period of time may be granted by HLURB to develop and complete the
project unless such failure or inability of the owner or developer to complete the project within the original
period is caused by any of the following exceptional circumstances:

1. Existence of sub-soil conditions discoverable only after actual excavation works in the project and
would necessarily require additional excavation time;

2. Occurrence of an event which is independent of the will of the owner or developer, unforeseeable or
unavoidable, and causes damage to the on-going project that requires reconstruction or causes delays
which are directly attributable to the event and renders its completion within the original approved
period impossible in a normal manner; provided, that the owner or developer did not participate or
aggravate the damage sustained by the project; or

3. An issuance of a lawful order of the court, government agency or local government unit resulting to
the temporary enjoinment or stoppage of the construction or development of the project, except when
the issuance of such order is attributable to any fault, mistake, or negligence on the part of the owner
or developer, or by reason of any dispute between the owner and developer in the development and
completion of the project.

In such exceptional circumstances, the project owner or developer is required to report the event to the
Regional Field Office (RFO) of HLURB where the project is registered within thirty (30) days from its
occurrence to put on record such event and its effect on the project, and also to notify all lot or unit buyers or
owners of its intent to apply for additional time to complete the development of the project. The grant of
additional time to complete the project is only effective upon posting by the owner or developer of an
acceptable performance bond or security in accordance with existing HLURB rules and guidelines.

Except in cases falling under the exceptional circumstance enumerated above, the non-completion of the
project within the approved time of completion shall entitle an affected buyer to exercise its rights in
accordance with PD 957 and the Civil Code of the Philippines, in addition to other rights and remedies
provided for by other laws.

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The non-completion of the project within the approved period time of completion may also subject the owner
or developer to administrative fines and sanctions such as the suspension of its license to sell and issuance of a
corresponding Cease and Desist Order enjoining the owner or developer from further selling any lot, building
or improvement or any unit in a project, from advertising the project, and from collecting amortization payment
until the project shall have been completed and a Certificate of Completion has been issued by HLURB for the
project.

B.P. 220: An Act Authorizing the Ministry of Human Settlements to Establish and Promulgate Different Levels
of Standards and Technical Requirements for Economic and Socialized Housing Projects in Urban and Rural
Areas from those Provided under Presidential Decrees Numbered Nine Hundred Fifty-Seven, Twelve Hundred
Sixteen, Ten Hundred Ninety-Six, and Eleven Hundred Eighty-Five

The Act and its Implementing Rules and Regulations (Act-IRR) apply to the development of economic and
socialized housing projects in urban and rural areas. Likewise, they apply to the development of either a house
and lot or a house or lot only (covered project).

Under these issuances, the covered project must be approved by the HLURB or the LGU, as the case may be,
before it commences. The approval of the Preliminary Subdivision Development Plan is valid only for a period
of 180 days from approval. Further, the development design and plans must undergo survey and evaluation
conducted by HLURB. The Act-IRR adopted the rules set out by P.D. 957 and its Implementing Rules.

It also sets forth minimum design standards and technical guidelines which are different from those under P.D.
957 (The Subdivision and Condominium Buyers Protective Decree), P.D. 1216 (Defining Open Space in
residential Subdivision), P.D. 1096 (National Building Code of the Philippines, and P.D. 1185 (Fire Code of
the Philippines). However, possible variations of the guidelines and standards may be allowed by the HLURB
should the strict observance of such cause unnecessary hardship based on specific regional, cultural and
economic setting.

A developer who intends to sell the subdivision or condominium should register the project and obtain a
License to Sell (LTS) from HLURB. The notice on Application for Certificate of Registration must be
published at the expense of the applicant, and a billboard notice must be posted on the project site until the
issuance of the LTS. Failure to publish the notice within 2 weeks from receipt of notice to publish by HLURB
will require the developer to re-file the application for the Certificate of Registration.

In addition to the requirements of registration and LTS, the Act-IRR also requires the submission of a
performance bond and payment of prescribed fees. The Act-IRR also proscribes any sale within two weeks
from the registration of the project.

The Rules also provides for several obligations of the developer, such as the initiation of organization and
registration of a homeowners association, and the donation of roads and open spaces found in the project to
LGUs of the area after their completion had been certified by the Board.

It must be noted that failure on the part of the developer to develop the project in accordance with the approved
project plans within the time specified shall subject the developer to administrative sanctions and penalties. The
above-mentioned Guidelines on Time of Completion is also applicable to the projects under this Act.

Further, HLURB mandates subdivision and condominium developer to submit a copy of the special/temporary
permit from the Professional Regulation Commission and of the separate permit from the Department of Labor
and Employment for foreign architects who signed on plans required under the IRR of PD 957 and B.P. 220.

Executive Order No. 71, Series of 1993

Under Executive Order No. 71, Series of 1993, cities and municipalities assume the powers of the HLURB over
the following:

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 a) approval of preliminary as well as final subdivision schemes and development plans of all
subdivisions, residential, commercial, industrial, and for other purposes;
b) approval of preliminary as well as final subdivision schemes and development plans of all
economic and socialized housing projects;
c) evaluation and resolution of opposition against issuance of development permits for any of
said projects; and
d) monitoring the nature and progress of its approved land development projects to ensure their
faithfulness to the approved plans and specifications.

Republic Act No. 7279: Urban Development and Housing Act of 1992

Republic Act No. 7279, as amended recently by Republic Act No. 10884, or the Urban Development and
Housing Act of 1992, requires developers of proposed subdivision projects to develop an area for socialized
housing equivalent to at least 15% of the total subdivision area or total subdivision project cost, and at least five
percent (5%) of condominium area or project cost, at the option of the developer, within the same city or
municipality whenever feasible, and in accordance with the standards set by HLURB and other existing laws.
Alternatively, the developer may opt to buy socialized housing bonds issued by various accredited government
agencies or enter into joint venture arrangements with other developers engaged in socialized housing
development.

Republic Act No. 9646: Real Estate Service Act

Real estate dealers, brokers and salesmen are also required to register with HLURB before they can sell lots or
units in a registered subdivision or condominium project. Furthermore, no person shall practice or offer to
practice real estate service in the Philippines unless he/she has satisfactorily passed the licensure examination
given by the Professional Regulatory Board of Real Estate Service. Under Republic Act No. 9646, or the Real
Estate Service Act, the real estate service practitioners required to take the licensure examination are:

1. Real estate consultants duly registered and licensed natural persons who, for a professional fee,
compensation or other valuable consideration, offer or render professional advice and judgment on: (i)
the acquisition, enhancement, preservation, utilization or disposition of lands or improvements
thereon; and (ii) the conception, planning, management and development of real estate projects;

2. Real estate appraisers duly registered and licensed natural persons who, for a professional fee,
compensation or other valuable consideration, perform or render, or offer to perform services in
estimating and arriving at an opinion of or act as an expert on real estate values, such services of
which shall be finally rendered by the preparation of the report in acceptable written form; or

3. Real estate brokers duly registered and licensed natural persons who, for a professional fee,
commission or other valuable consideration, act as an agent of a party in a real estate transaction to
offer, advertise, solicit, list, promote, mediate, negotiate or effect the meeting of the minds on the sale,
purchase, exchange, mortgage, lease or joint venture, or other similar transactions on real estate or any
interest therein.

Republic Act No. 4726: The Condominium Act

Under the Condominium Act, the owner of a project shall, prior to the conveyance of any condominium
therein, register a declaration of restrictions relating to such project, which restrictions shall constitute a lien
upon each condominium unit in the project, and shall insure to and bind all condominium owners in the project.
Such liens, unless otherwise provided, may be enforced by any condominium owner in the project or by the
management body of such project. The Register of Deeds (RD) shall enter and annotate the declaration of
restrictions upon the certificate of title covering the land included within the project.

The declaration of restrictions shall provide for the management of the project by anyone of the following
management bodies: a condominium corporation, an association of the condominium owners, a board of
governors elected by condominium owners, or a management agent elected by the owners or by the board

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 named in the declaration. It shall also provide for voting majorities, quorums, notices, meeting date, and other
rules governing such body or bodies.

Further, any transfer or conveyance of any unit or an apartment, office or store or other space, shall include the
transfer or conveyance of the undivided interests in the common areas, or, in a proper case, the membership or
shareholdings in the condominium corporation. A condominium corporation shall not, during its existence, sell,
exchange, lease, or otherwise dispose of the common areas owned or held by it in the condominium project
unless authorized by the affirmative vote of a simple majority of the registered owners with prior notification to
all registered owners. Further, the condominium corporation may expand or integrate the project with another
upon the affirmative vote of a simple majority of the registered owners, subject only to the final approval of
HLURB.

Real estate sales on installments

Republic Act No. 6552: Maceda Law

The provisions of Republic Act No. 6552, or the Maceda Law, apply to all transactions or contracts involving
the sale or financing of real estate on installment payments (including residential condominium units but
excluding industrial and commercial lots).

Under the provisions of the Maceda Law, where a buyer of real estate has paid at least two years of
installments, the buyer is entitled to the following rights in case he/she defaults in the payment of succeeding
installments:

1. To pay, without additional interest, the unpaid installments due within the total grace period earned by
him, which is fixed at the rate of one month for every one year of installment payments made. However,
the buyer may exercise this right only once every five years during the term of the contract and its
extensions, if any.

2. If the contract is cancelled, the seller shall refund to the buyer the cash surrender value of the payments on
the property equivalent to 50% of the total payments made, and in cases where five years of installments
have been paid, an additional 5% every year (but with a total not to exceed 90% of the total payments);
Provided, that the actual cancellation of the contract shall take place after 30 days from receipt by the
buyer of the notice of cancellation or the demand for rescission of the contract by a notarial act and upon
full payment of the cash surrender value to the buyer.

The computation of the total number of installment payments made includes down payments, deposits, or
options on the contract.

In the event that the buyer has paid less than two years of installments, the seller shall give the buyer a grace
period of not less than 60 days from the date the installment became due. If the buyer fails to pay the
installments due at the expiration of the grace period, the seller may cancel the contract after 30 days from
receipt by the buyer of the notice of cancellation or the demand for rescission of the contract by a notarial act.

Zoning and land use

Republic Act No. 7160: Local Government Code of the Philippines

A city or municipality may, through an ordinance passed by the Sanggunian, after conducting public hearings
for the purpose, authorize the reclassification of agricultural lands and provide for the manner of their
utilization or disposition in the following cases: (i) when the land ceases to be economically feasible and sound
for agriculture or (ii) where the land shall have substantially greater economic value for residential, commercial
or industrial purposes, as determined by the Sanggunian concerned; provided that such reclassification shall be
limited to the following percentage of total agricultural land area at the time of the passage of the ordinance:

1. For Highly Urbanized and Independent Component Cities, fifteen percent (15%);

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2. For Component Cities and First to Third Class Municipalities, ten percent (10%);

3. For Fourth to Sixth Class Municipalities, five percent (5%).

Zoning ordinances may also limit land use. Once enacted, a comprehensive land use plan approved by the
relevant local government unit may restrict land use in accordance with such land use plan. Zoning ordinances
may also classify lands as commercial, industrial, residential or agricultural. Lands may also be further re-
classified based on a local government units future projection of needs.

Republic Act No. 6657: Comprehensive Agrarian Reform Law of 1988

Under Republic Act No. 6657, as amended, or the Comprehensive Agrarian Reform Law of 1988, and such
other rules and regulations currently in effect in the Philippines, however, land classified for agricultural
purposes as of or after June 1, 1988 cannot be converted to non-agricultural use without the prior approval of
the DAR.

Property registration and nationality restrictions

Presidential Decree No. 1529: Property Registration Decree

The Philippines has adopted a system of land registration, which evidences land ownership that is binding on
all persons. Once registered, title to registered land becomes indefeasible after one year from the date of entry
of the decree of registration except with respect to claims noted on the certificate of title. Title to registered
lands cannot be lost through adverse possession or prescription. Presidential Decree No. 1529, as amended, or
the Property Registration Decree, codified the laws relative to land registration and is based on the generally
accepted principles underlying the Torrens System.

After proper survey, application, publication, service of notice and hearing, unregistered land may be brought
under the system by virtue of judicial or administrative proceedings. In a judicial proceeding, the Regional
Trial Court within whose jurisdiction the land is situated confirms title to the land. Persons opposing the
registration may appeal the judgment to the Court of Appeals and ultimately to the Supreme Court within 15
days from receiving notice of judgment. Upon finality of judgment, the appropriate RD may issue an Original
Certificate of Title (OCT). The decree of registration may be annulled on the ground of actual fraud within
one year from the date of entry of the decree of registration. Similarly, in an administrative proceeding, the land
is granted to the applicant by the DENRs issuance of a patent. The patent becomes the basis for issuance of the
OCT by the RD. All land patents (i.e. homestead, sales and free patents) must be registered with the appropriate
RD since the conveyance of the title to the land covered thereby takes effect only upon such registration.

The act of registration shall be the operative act to convey or affect the land insofar as third persons are
concerned, and in all cases under the said decree, the registration shall be made in the office of the RD for the
province or city where the land lies. Every conveyance, mortgage, lease, lien, attachment, order, judgment,
instrument or entry affecting registered land, if filed or entered in the office of the RD for the province or city
where the land to which it relates lies, shall be constructive notice to all persons from the time it is registered,
filed, or entered in the records of the RD.

All interests in registered land less than ownership (such as liens created by mortgages and leases) shall be
registered by filing with the RD the instrument which creates or transfers or claims such interests and by a brief
memorandum thereof made by the RD upon the certificate of title, and signed by him. A similar memorandum
shall also be made on the owners duplicate.

Any subsequent transfer or encumbrance of the land must be registered in the system in order to bind third
persons. Subsequent registration and a new Transfer Certificate of Title in the name of the transferee will be
granted upon presentation of certain documents and payment of fees and taxes.

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All documents evidencing conveyances of subdivision and condominium units should also be registered with
the RD. Title to the subdivision or condominium unit must be delivered to the purchaser upon full payment of
the sales price. In the event a mortgage over the lot or unit is outstanding at the time of the issuance of the title
to the buyer, the owner or developer shall redeem the mortgage or the corresponding portion thereof within six
months from such issuance in order that the title over any fully paid lot or unit may be secured and delivered to
the buyer. To evidence ownership of condominium units, the RD issues a Condominium Certificate of Title.

Article XII, Section 7 of the Constitution; Commonwealth Act No. 141

Article XII, Section 7 of the Constitution, in relation to Chapter 5 of the Commonwealth Act No. 141, states
that no private land shall be transferred or conveyed except to citizens of the Philippines or to corporations or
associations organized under the laws of the Philippines at least 60% of whose capital is owned by such
citizens. While the Philippine Constitution prescribes nationality restrictions on land ownership, there is
generally no prohibition against foreigners owning buildings and other permanent structures. However,
pursuant to Republic Act No. 4726 (as amended), with respect to condominium developments, the ownership
of condominium units where the common areas in the condominium project are co-owned by the owners of the
separate units or owned by a corporation is limited to up to 40% foreign equity.

Environmental laws and safety standards

Development projects that are classified by law as environmentally critical or projects within statutorily defined
environmentally critical areas are required to obtain an Environmental Compliance Certificate (ECC) prior to
commencement. The DENR, through its regional offices or through the Environmental Management Bureau
(EMB), determines whether a project is environmentally critical or located in an environmentally critical
area. As a requisite for the issuance of an ECC, an environmentally critical project is required to submit an
Environmental Impact Statement (EIS) to the EMB while a project in an environmentally critical area is
generally required to submit an Initial Environmental Examination (IEE) to the proper DENR regional office.
In the case of an environmentally critical project within an environmentally critical area, an EIS is required.
The construction of major roads and bridges are considered environmentally critical projects for which EIS and
ECC are mandatory. In determining the scope of the EIS System, two factors are considered: (i) the nature of
the project and its potential to cause significant negative environmental impacts, and (ii) the sensitivity or
vulnerability of environmental resources in the project area.

The EIS refers to both the document and the study of a projects environmental impact, including a discussion
of the direct and indirect consequences of the project to human welfare and ecological as well as environmental
integrity. The IEE refers to the document and the study describing the environmental impact, including
mitigation and enhancement measures, for projects in environmentally critical areas.

While the EIS or an IEE may vary from project to project, as a minimum each contains all relevant information
regarding the projects environmental effects. The entire process of organization, administration and
assessment of the effects of any project on the quality of the physical, biological and socio-economic
environment as well as the design of appropriate preventive, mitigating and enhancement measures is known as
the EIS System. The EIS System successfully culminates in the issuance of an ECC. The issuance of an ECC is
a government certification that the proposed project or undertaking will not cause a significant negative
environmental impact, that the proponent has complied with all the requirements of the EIS System, and that
the proponent is committed to implement its approved Environmental Management Plan in the EIS or, if an
IEE was required, that it shall comply with the mitigation measures provided therein.

Project proponents that prepare an EIS are required to establish an Environmental Guarantee Fund (EGF)
when the ECC is issued for projects determined by the DENR to pose a significant public risk to life, health,
property and the environment or where the project requires rehabilitation or restoration. The EGF is intended to
meet any damages caused by such a project as well as any rehabilitation and restoration measures. Project
proponents that prepare an EIS are required to include a commitment to establish an Environmental Monitoring
Fund (EMF) when an ECC is eventually issued. In any case, the establishment of an EMF must not be later
than the initial construction phase of the project. The EMF shall be used to support the activities of a multi-

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partite monitoring team organized to monitor compliance with the ECC and applicable laws, rules and
regulations.

While a development project may not fall under the categories wherein an ECC is required, it is still required to
obtain a Certificate of Non-Coverage (CNC) from the EMB or the DENR Regional Office. The applicant
must submit a Project Description to the EMB, which will then evaluate whether or not an ECC is required for
the project. If an ECC is not required, then the EMB will issue a CNC to be submitted to HLURB.

Aside from the EIS and IEE, engineering, geological and geo-hazard assessments are also required for ECC
applications covering subdivisions, housing and other land development and infrastructure projects.

All buildings or structures as well as accessory facilities thereto shall conform in all respects to the principles of
safe construction under the National Building Code. Aside from the building permit under the National
Building Code, an applicant in specific instances may be required to secure a Height Clearance Permit from the
Civil Aviation Authority of the Philippines.

Real property taxation

Republic Act No. 7160: Local Government Code of the Philippines

Real property taxes are payable annually or quarterly based on the propertys assessed value. Assessed values
are determined by applying the assessment levels (fixed by ordinances of the concerned Sanggunian) against
the fair market values of real property. Under Republic Act No. 7160, as amended, or the Local Government
Code of the Philippines, the assessed value of property and improvements varies depending on the location, use
and nature of the property. Land is ordinarily assessed at 20% to 50% of its fair market value; buildings may be
assessed up to 80% of their fair market values; and machinery may be assessed at 40% to 80% of its fair market
value. Real property taxes may not exceed 2% of the assessed value in municipalities and cities within Metro
Manila or in other chartered cities and 1% in all other areas. A province or city, or a municipality within Metro
Manila may also levy and collect an annual tax of one percent (1%) on the assessed value of real property
which shall be in addition to the basic real property tax to accrue exclusively to the Special Education Fund of
the local government unit where the property is located.

Construction license

A regular contractors license is required to be obtained from the Philippine Contractors Accreditation Board
(PCAB). In applying for and granting such license, PCAB takes into consideration the applicant-contractors
qualifications and compliance with certain minimum requirements in the following criteria: (i) financial
capacity, (ii) equipment capacity, (iii) experience of the firm, and (iv) experience of technical personnel.
Philippine laws also require a contractor to secure construction permits and environmental clearances from
appropriate government agencies prior to actually undertaking each project.

Board of Investments

The Board of Investments (BOI), an agency attached to the Department of Trade and Industry, was created
under the Omnibus Investment Code of 1987 (Executive Order No. 226, as amended). The BOI is responsible
for promoting and assisting local and foreign investors to venture in desirable areas of business or economic
activities.

Under the Omnibus Investment Code, preferred areas of activities or projects specified by the BOI in the
Investment Priorities Plan (IPP) enjoy tax exemption and other benefits to enterprises which venture into
such projects. Generally, these incentives include the grant of income tax holiday, the duty-free importation of
capital goods, exemption from wharfage dues and export tax, and other non-fiscal incentives such as the
employment of foreign nationals, streamlined customs procedures, and the importation of consigned
equipment.

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Depending on whether the activity is classified as a pioneer or a non-pioneer project and provided the
registered enterprise meets the project targets, the income tax holiday incentive may be granted for a period of
4 years to a maximum of 6 years. However, for eligible mass housing projects in the National Capital Region,
Metro Cebu and Metro Davao region, the BOI limits the Income Tax Holiday incentive granted to such
registered project to three years.

Based on the latest BOI guidelines, economic and low-cost housing projects must meet the following criteria to
qualify for registration: (a) the selling price of each housing unit shall be more than Four Hundred Fifty
Thousand Pesos (P450,000.00) but not exceeding Three Million Pesos (P3,000,000.00), (b) the project must
have a minimum of 20 livable dwelling units in a single site or building, (c) the project must be new or
expanding economic/low-cost housing project, (d) for vertical housing projects, at least 51% of the total floor
area, excluding common facilities and parking areas, must be devoted to housing units.

All economic/low-cost housing projects are required to comply with socialized housing requirement by
building socialized housing units in an area equivalent to at least 20% of the total registered project area or total
BOI registered project cost for horizontal housing and 20% of the total floor area of qualified saleable housing
units for vertical housing projects.

Philippine Economic Zone Authority

The Philippine Economic Zone Authority (PEZA) is an agency attached to the Department of Trade and
Industry that promotes investment in areas designated special economic zones around the Philippines.

Under R.A. No. 7916, as amended, or the Special Economic Zone Act of 1995, activities eligible for
registration with the PEZA are export-oriented enterprises in the fields of manufacturing, information
technology service, agro-industrial, tourism and medical tourism, economic zone development and operation,
and logistics and warehousing services for PEZA-registered Export Manufacturing Enterprises.

Generally, enterprises registered with PEZA and PEZA facility developers and operators enjoy fiscal and non-
fiscal incentives such as income tax holiday, and duty free importation of equipment, machinery and raw
materials. However, the PEZA Board issued PEZA Resolution No. 12-329 on 6 July 2012, excluding
information technology (I.T.) facilities projects approved after the said resolution from enjoying PEZA
incentives if the projects are located in the first four (4) PEZA-registered I.T. Parks in Metro Manila (i.e.
Eastwood City Cyberpark in Quezon City, Northgate Cyber Zone in Alabang, Muntinlupa City, Robinsons
Cyberpark in EDSA, Mandaluyong City and E-Square I.T. Park in Bonifacio Global City, Taguig City) and in
Cebu City (Cebu I.T. Park). Notwithstanding, developers and operators of new I.T. Parks and Centers located
outside Metro Manila and Cebu City remain entitled to the special five percent (5%) tax on gross income
incentive and other fiscal incentives as may be provided by PEZA.

Philippine Competition Act

R.A. No. 10667, or the Philippine Competition Act (PCA), is the primary competition policy of the
Philippines. It aims to enhance economic efficiency and promote free and fair competition in trade, industry
and all commercial economic activities.

The PCA prohibits and imposes sanctions on:

1. Anti-competitive agreements between or among competitors, which restrict competition as to price, or

other terms of trade and those fixing price at an auction or in any form of bidding including cover
bidding, bid suppression, bid rotation and market allocation and other analogous practices of bid
manipulation; and those which have the object or effect of substantially preventing, restricting or
lessening competition;

2. Practices which are regarded as abuse of dominant position, by engaging in conduct that would
substantially prevent, restrict or lessen competition; and

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3. Merger or acquisitions which substantially prevent, restrict or lessen competition in the relevant
market or in the market for goods or services.

Moreover, the parties to a merger, acquisition or joint venture are required to comply with the compulsory
notification requirements of the Philippine Competition Commission (PCC), the agency responsible for the
implementation of the PCA, before consummating the transaction where:

1. In a merger or acquisition of assets, the value of the transaction exceeds One Billion Pesos (P
l,000,000,000.00), and the gross revenue and assets of the ultimate parent entity of one of the parties
to the transaction exceeds (P l,000,000,000.00); or

2. As a result of a proposed acquisition of voting shares of a corporation or of an interest in a non-

corporate entity, the acquiring entity, together with its affiliates, would own thirty-five percent (35%)
of the voting shares or shares entitled to profits, or increase the said shareholdings to fifty percent
(50%);

3. In a notifiable joint venture transaction, if either (i) the aggregate value of the assets that will be
combined in the Philippines or contributed into the proposed joint venture exceeds One Billion Pesos
(Pl,000,000,000.00) or (ii) the gross revenues generated in the Philippines by assets to be combined in
the Philippines or contributed into the proposed joint venture exceed One Billion Pesos (
l,000,000,000.00).

An agreement consummated in violation of the compulsory notification requirement shall be considered void,
and shall subject the parties to an administrative fine of one percent (1%) to five percent (5%) of the value of
the transaction.

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 TAXATION

The following is a general description of certain Philippine tax aspects of the investment in the Offer
Shares. This discussion is based on laws, regulations, rulings, income tax conventions (tax treaties),
administrative practices and judicial decisions in effect at the date of this Prospectus, and is subject to any
changes in law occurring after such date. Subsequent legislative, judicial or administrative changes or
interpretations may be retroactive and could affect the tax consequences to the prospective investor.

The tax treatment of a prospective investor may vary depending on such investors particular situation and
certain investors may be subject to special rules not discussed below. This summary does not purport to
address all tax aspects that may be important to an investor, or to deal with the tax consequences applicable to
all categories of investors, some of which (such as dealers in securities) may be subject to special rates

This general description does not purport to be a comprehensive description of the Philippine tax aspects of the
investments in shares and no information is provided regarding the tax aspects of acquiring, owning, holding
or disposing the shares under applicable tax laws of other applicable jurisdictions and the specific tax
consequence in light of particular situations of acquiring, owning, holding and disposing the shares in such
other jurisdictions.

EACH PROSPECTIVE HOLDER SHOULD CONSULT WITH HIS OWN TAX ADVISER AS TO THE
PARTICULAR TAX CONSEQUENCES TO SUCH HOLDER OF PURCHASING, OWNING AND
DISPOSING OF THE OFFER SHARES, INCLUDING THE APPLICABILITY AND EFFECT OF ANY
LOCAL AND NATIONAL TAX LAWS.

As used in this section, the term resident alien refers to an individual whose residence is within the
Philippines and who is not a citizen thereof; a non-resident alien is an individual whose residence is not
within the Philippines and who is not a citizen of the Philippines; a non-resident alien who is actually within
the Philippines for an aggregate period of more than 180 days during any calendar year is considered a non-
resident alien engaged in trade or business in the Philippines; otherwise, such non-resident alien who is
actually within the Philippines for an aggregate period of 180 days or less during any calendar year is
considered a non-resident alien not engaged in trade or business in the Philippines. A resident foreign
corporation is a foreign corporation engaged in trade or business within the Philippines; and a non-resident
foreign corporation is a non-Philippine corporation not engaged in trade or business within the Philippines.

The term non-resident holder means a holder of the Companys shares:

who is an individual who is neither a citizen nor a resident of the Philippines or an entity which is a
non-resident foreign corporation; and

should a tax treaty be applicable, whose ownership of the Companys shares is not effectively
connected with a fixed base or a permanent establishment in the Philippines.

CORPORATE INCOME TAX

Republic Act No. 8424, as amended, or the National Internal Revenue Code (the Philippine Tax Code),
generally subjects a domestic corporation to a tax of 30% of its taxable income from all sources within and
outside the Philippines except, among others, (i) gross interest income from currency bank deposits and yield
from deposit substitutes, trust funds and similar arrangements as well as royalties from sources within the
Philippines which are generally taxed at the lower final withholding tax rate of 20% of the gross amount of
such income; (ii) interest income from a depository bank under the expanded foreign currency deposit system
which is subject to a final tax rate of 7.5% of such income, (iii) capital gains tax from sales of shares of stock
not traded in the stock exchange which are taxed at a rate of 5% on gains up to 100,000 and 10% on gains in
excess of the first 100,000, and (iv) capital gains realized from the sale, exchange or disposition of lands and
buildings, which is subject to a final tax of 6%.

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A minimum corporate income tax of 2% of the gross income as of the end of the taxable year is imposed on a
domestic corporation beginning on the fourth taxable year immediately following the year in which such
corporation commenced its business operations, when the minimum corporate income tax is greater than the
regular corporate income tax for the taxable year.

Nevertheless, any excess of the minimum corporate income tax over the regular corporate income tax shall be
carried forward and credited against the latter for the three immediately succeeding taxable years. Further,
subject to certain conditions, the minimum corporate income tax may be suspended with respect to a
corporation which suffers losses on account of a prolonged labor dispute, force majeure or legitimate business
reasons.

TAX ON DIVIDENDS

Cash and property dividends received from a domestic corporation by individual shareholders who are either
citizens or residents of the Philippines are subject to a final withholding tax at the rate of 10%. Cash and
property dividends received from a domestic corporation by domestic corporations or resident foreign
corporations are not subject to income tax.

Cash and property dividends received from a domestic corporation by non-resident alien individuals , engaged
in trade or business in the Philippines, are subject to a 20% final withholding tax on the gross amount thereof.
A non-resident alien who comes to the Philippines and stays in the country for an aggregate period of more
than 180 days during any calendar year will be deemed a non-resident alien engaged in trade or business in the
Philippines. On the other hand, cash and property dividends received from a domestic corporation by non-
resident alien individuals not engaged in trade or business in the Philippines are subject to a 25% final
withholding on the gross amount. In either case, cash and property received by non-resident aliens whether or
not engaged in trade or business in the Philippine may be subject to the applicable preferential tax rates under
tax treaties executed between the Philippines and the country of residence or domicile of such non-resident
foreign individuals. As a matter of prudence, a prior application for tax treaty relief should be properly filed
with the BIR. (But please see discussion below on BIR Revenue Memorandum Order No. 27-2016 regarding
tax treaty relief applications.)

Finally, cash and property dividends received from a domestic corporation by a non-resident foreign
corporation are generally subject to a final withholding tax at the rate of 30%, which may be reduced to 15%
(under the tax sparing rules) when the country in which the non-resident foreign corporation is domiciled (i)
imposes no taxes on foreignsourced dividends or (ii) allows a 15% or greater credit against the tax due from
the non-resident foreign corporation taxes deemed to have been paid in the Philippines. Alternatively, non-
resident foreign corporations may avail themselves of the preferential tax rates applicable to cash and property
dividends received from a domestic corporation under tax treaties executed between the Philippines and the
country of residence or domicile of such non-resident foreign corporations provided that a prior application for
a tax treaty relief has been properly filed with the appropriate office of the Philippine tax authorities. (See
discussion, however, in Revenue Memorandum Order 27-2016, which is currently suspended by Revenue
Memorandum Circular No. 69-2016.)

The following table lists some of the countries with which the Philippines has tax treaties and the tax rates
currently applicable to non-resident holders who are residents of those countries:

Capital gains tax due

Stock transaction tax on on disposition of
Dividends sale or disposition effected shares outside the PSE
(%) through the PSE(%)(12) (%)
(1)
25 0.5 May be exempt(9)
Canada .............................................................................................................................................................................................
15(2) May be exempt(9)
China ................................................................................................................................................................................................
0.5
(3)
15 0.5 May be exempt(9)
France ..............................................................................................................................................................................................
(4)
15 0.5 5/10(10)
Germany ..........................................................................................................................................................................................
(5)
15 0.5 May be exempt(9)
Japan ................................................................................................................................................................................................
(6)
25 0.5 May be exempt(9)
Singapore .........................................................................................................................................................................................

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 Capital gains tax due
Stock transaction tax on on disposition of
Dividends sale or disposition effected shares outside the PSE
(%) through the PSE(%)(12) (%)
(7)
25 0.5 Exempt(11)
United Kingdom ..............................................................................................................................................................................
(8)
25 0.5 May be exempt(9)
United States ....................................................................................................................................................................................

(1) 15% if the recipient company controls at least 10% of the voting power of the company paying the dividends.

(2) 10% if the beneficial owner is a company which holds directly at least 10% of the capital of the company paying the
dividends.

(3) 10% if the recipient company (excluding a partnership) holds directly at least 10% of the voting shares of the company
paying the dividends.

(4) 5% if the recipient company (excluding a partnership) owns directly at least 70 %of the capital of the company paying
the dividends; 10% if the recipient company (excluding a partnership) owns directly at least 25% of the capital of the
company paying the dividends.

(5) 10% if the recipient company holds directly at least 10% of either the voting shares of the company paying the
dividends or of the total shares issued by that company during the period of six months immediately preceding the date
of payment of the dividends.

(6) 15% if during the part of the paying companys taxable year which precedes the date of payment of dividends and
during the whole of its prior taxable year at least 15% of the outstanding shares of the voting shares of the paying
company were owned by the recipient company (including partnership).

(7) 15% if the recipient company is a company which controls directly or indirectly at least 10% of the voting power of
the company paying the dividends.

(8) 20% if during the part of the paying corporations taxable year which precedes the date of payment of dividends and
during the whole of its prior taxable year, at least 10% of the outstanding shares of the voting shares of the paying
corporation were owned by the recipient corporation. Notwithstanding the rates provided under the Republic of the
Philippines-United States Treaty, residents of the United States may avail themselves of the 15% withholding tax rate
under the tax-sparing clause of the Philippine Tax Code provided certain conditions are met.

(9) Capital gains are taxable only in the country where the seller is a resident, provided the shares are not those of a
corporation, the assets of which consist principally of real property situated in the Philippines, in which case the sale
is subject to Philippine taxes.

(10) Under the tax treaty between the Philippines and Germany, capital gains from the alienation of shares of a Philippine
corporation may be taxed in the Philippines irrespective of the nature of the assets of the Philippine corporation. Tax
rates are 5% on the net capital gains realized during the taxable year not in excess of 100,000 and 10% on the net
capital gains realized during the taxable year in excess of 100,000.

(11) Under the tax treaty between the Philippines and the United Kingdom, capital gains on the sale of the shares of
Philippine corporations are subject to tax only in the country where the seller is a resident, irrespective of the nature
of the assets of the Philippine corporation.

(12) Exempt if the stock transaction tax is expressly covered by the applicable tax treaty or is deemed by the relevant
authorities as an identical or substantially similar tax to the Philippine income tax. In BIR Ruling No. ITAD 22-07
dated February 9, 2007, the BIR held that the stock transaction tax cannot be considered as an identical or
substantially similar tax on income, and, consequently, ruled that a Singapore resident is not exempt from the stock
transaction tax on the sale of its shares in a Philippine corporation through the PSE.

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Stock dividends distributed pro-rata to any holder of shares of stock are not income, and hence not subject to
Philippine income tax. A stock dividend does not constitute income if the new shares confer no different rights
or interest than did the old. However, a stock dividend constitutes income if it gives the shareholder an interest
different from that which his former stockholdings represented. The declaration of stock dividends, if it results
in an increase in interest, is treated as property dividends, subject to the tax consequences on cash and property
dividends, as outlined above. On the other hand, if the stock dividends result in a decrease in interest, to such
extent, it is treated as liquidating dividends subject to regular income tax on the gain in liquidation.

Any availment of tax treaty relief should, as a matter of prudence, be preceded by an application for tax treaty
relief filed with the International Tax Affairs Division of the BIR as required under the BIR Revenue
Memorandum Order No. 72-2010, including any clarification, supplement or amendment thereto and, once
available, a BIR-certified certificate, ruling or opinion addressed to the relevant applicant or shareholder
confirming its entitlement to the preferential tax rate under the applicable treaty. The current requirements for a
tax treaty relief application in respect of capital gains tax on the sale of shares are set out in the applicable tax
treaty and in BIR Form No. 0901-C. The BIR has prescribed, through administrative issuances, certain
procedures for the availment of preferential tax rates or tax treaty relief. (See discussion, however, in Revenue
Memorandum Order 27-2016, which is currently suspended by Revenue Memorandum Circular No. 69-2016.)

If the regular tax rate is withheld by the paying corporation instead of the reduced rates applicable under a tax
treaty, the nonresident holder of the shares may file a claim for refund from the BIR. However, because the
refund process in the Philippines requires the filing of an administrative claim and the submission of supporting
information, and may also involve the filing of a judicial appeal, it may be impractical to pursue such a refund.

On June 23, 2016, the BIR issued BIR Revenue Memorandum Order No. 27-2016 (RMO 27-2016), which
amends BIR Revenue Memorandum Order No. 72-2010. RMO 27-2016 provides that in lieu of filing a tax
treaty relief application, preferential treaty rates for dividends, interests and royalties shall be granted outright
by withholding final taxes at the applicable treaty rate. As of the date of this Prospectus, the effectivity of RMO
27-2016 has been suspended.

SALE, EXCHANGE OR DISPOSITION OF SHARES

Sale, Exchange or Disposition of Shares through an Initial Public Offering (IPO)

The sale, barter, exchange or other disposition through an IPO of shares of stock in closely held corporations is
subject to an IPO tax at the rates below based on the gross selling price or gross value in money of the shares of
stock sold, bartered, exchanged or otherwise disposed.

Up to 25% ..............................................................................................................................................................
4%
Above 25% up to 331/3% .......................................................................................................................................
2%
Above 331/3% .........................................................................................................................................................
1%

A closely held corporation means any corporation at least 50% in value of outstanding capital stock or at
least 50% of the total combined voting power of all classes of stock entitled to vote is owned directly or
indirectly by or for not more than 20 individuals.

The total IPO tax is arrived at after separately computing the IPO tax for primary and secondary offerings. The
IPO tax for the [Offer Shares], if applicable, shall be paid by the Company and the Selling Shareholder.

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Sale, Exchange or Disposition of Shares after the IPO

Capital Gains Tax, if sale was made outside the PSE

Unless an applicable treaty exempts such gains from tax or provides for preferential rates, the net capital gains
realized by a resident or non-resident (other than a dealer in securities) during each taxable year from the sale,
exchange or disposition of shares of stock (i.e. secondary sale of common shares by the holder to another party)
outside the facilities of the PSE are subject to capital gains tax of 5% on gains not exceeding P100,000 and
10% on the gains over P100,000. If an applicable tax treaty exempts the gains from tax, an application for tax
treaty relief must be properly filed with the Philippine tax authorities and should precede any availment of an
exemption under a tax treaty.

The transfer of shares shall not be recorded in the books of a company, unless the BIR certifies that the capital
gains and documentary stamp taxes relating to the sale or transfer have been paid, or where applicable, a tax
treaty relief has been confirmed by the International Tax Affairs Division of the BIR or other conditions have
been met.

Taxes on Transfer of Shares Listed and Traded at the PSE

Unless an applicable treaty exempts the sale from income and/or percentage tax, a sale or other disposition of
shares of stock through the facilities of the PSE by a resident or a non-resident holder (other than a dealer in
securities), is subject to a stock transaction tax at the rate of one-half of 1% (or 0.5%) of the gross selling price
or gross value in money of the shares of stock sold or otherwise disposed. This tax is required to be collected
by and paid to the Philippine Government by the selling stockbroker on behalf of his client. The stock
transaction tax is classified as a percentage tax in lieu of a capital gains tax. Under certain tax treaties, the
exemptions from capital gains tax discussed herein may not be applicable to stock transaction tax.

In addition, VAT of 12% is imposed on the commission earned by the PSE-registered broker from services
provided in connection with the sale of shares. VAT is generally passed on to the client.

The PSE issued Memorandum CN-No. 2012-0046 dated August 22, 2012, which provides that immediately
after December 31, 2012, the SEC shall impose a trading suspension for a period of not more than six months,
on shares of a listed company which has not complied with the Rule on Minimum Public Ownership (MPO)
which requires listed companies to maintain a minimum percentage of listed securities held by the public at ten
percent (10%) of the listed companies issued and outstanding shares at all times. Consequently, the sale of such
listed company shares during the trading suspension may be effected only outside the trading system of the
Exchange and shall be subject to capital gains tax and documentary stamp tax. Furthermore, if the fair market
value of the shares of stock sold is greater than the consideration or the selling price, the amount by which the
fair market value of the shares exceeds the selling price shall be deemed a gift that is subject to donors tax
under Section 100 of the National Internal Revenue Code.

On November 7, 2012, the BIR issued Revenue Regulations No. 16-2012 (R.R. 16-12), which provides that
the sale, barter, transfer, and/or assignment of shares of listed companies that fail to meet the MPO requirement
after December 31, 2012 will be subject to capital gains tax and documentary stamp tax. R.R. 16-12 also
requires publicly listed companies to submit public ownership reports to the BIR within 15 days after the end of
each quarter.

Documentary Stamp Tax

The original issue of shares of stock is subject to documentary stamp tax (DST) of P1 for each P200, or a
fractional part thereof, of the par value of the shares of stock issued. The DST on the issuance of the [Primary
Shares] shall be paid by the Company.

The secondary transfer of shares of stock outside the facilities of the PSE is subject to a documentary stamp tax
of P0.75 for each P200, or a fractional part thereof, of the par value of the share of stock transferred. The DST
is imposed on the person making, signing, issuing, accepting or transferring the document and is thus payable

166
by the vendor or the purchaser of the shares. However, the sale, barter or exchange of shares of stock listed and
traded at the PSE is exempt from documentary stamp tax.

In addition, the borrowing and lending of securities executed under the securities borrowing and lending
program of a registered exchange, or in accordance with regulations prescribed by the appropriate regulatory
authority, are likewise exempt from DST. However, the securities borrowing and lending agreement should be
duly covered by a master securities borrowing and lending agreement acceptable to the appropriate regulatory
authority, and should be duly registered and approved by the BIR.

Estate and Donors Tax

Shares issued by a corporation organized under Philippine laws are deemed to have a Philippine situs, and any
transfer thereof by way succession or donation, even if made by a non-resident decedent or donor outside the
Philippines, is subject to Philippine estate and donors tax, respectively.

The transfer of shares of stock upon the death of an individual holder to his heirs by way of succession,
whether such holder was a citizen of the Philippines or an alien, regardless of residence, is subject to Philippine
estate taxes at progressive rates ranging from 5% to 20%, if the net estate is over P200,000. On the other hand,
individual stockholders, whether or not citizens or residents of the Philippines, who transfer shares of stock by
way of gift or donation are liable to pay Philippine donors tax on such transfer of shares ranging from 2% to
15% of the net gifts during the calendar year exceeding P100,000. The rate of tax with respect to net gifts made
by an individual holder to a stranger (i.e., one who is not a brother, sister, spouse, ancestor, lineal descendant or
relative by consanguinity within the fourth degree of relationship) is a flat rate of 30%. Donations between
business organizations, and between individuals and business organizations are considered donations made to a
stranger. Corporate registered holders are also liable for Philippine donors tax on such transfers, but the rate of
tax with respect to net gifts made by corporate registered holders is always at a flat rate of 30.0%.

The sale, exchange or transfer of shares outside the facilities of the PSE may also be subject to donors tax
when the fair market value of the shares of stock sold is greater than the amount of money received by the
seller. In this case, the excess of the fair market value of the shares of stock sold over the amount of money
received as consideration shall be deemed a gift subject to donors tax.

Estate and donors tax, however, shall not be collected in respect of intangible personal property, such as shares
of stock: (a) if the decedent at the time of his death or the donor at the time of the donation was a citizen and
resident of a foreign country which at the time of his death or donation did not impose a transfer tax of any
character, in respect of intangible personal property of citizens of the Philippines not residing in that foreign
country, or (b) if the laws of the foreign country of which the decedent or donor was a citizen and resident at
the time of his death or donation allows a similar exemption from transfer or death taxes of every character or
description in respect of intangible personal property owned by citizens of the Philippines not residing in that
foreign country.

TAXATION OUTSIDE THE PHILIPPINES

Shares of stock in a domestic corporation are considered under Philippine law as situated in the Philippines and
the gain derived from their sale is entirely from Philippine sources; hence such gain is subject to Philippine
income tax and the transfer of such shares by way of donation (gift) or succession is subject to Philippine
donors or estate taxes, respectively as stated above.

The tax treatment of a non-resident holder of shares of stock in jurisdictions outside the Philippines may vary
depending on the tax laws applicable to such holder by reason of domicile or business activities and such
holders particular situation. This Prospectus does not discuss the tax considerations on non-resident holders of
shares of stock under laws other than those of the Philippines.

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 LEGAL MATTERS

All legal issues relating to the issuance of the Offer Shares shall be passed upon by Angara Abello Concepcion
Regala & Cruz for the Company and by SyCip Salazar Hernandez & Gatmaitan for the Issue Manager and
Joint Lead Underwriters. Angara Abello Concepcion Regala & Cruz and SyCip Salazar Hernandez &
Gatmaitan have no direct or indirect interest in the Company. Each of these law firms may, from time to time
be engaged by the Company to advise in the transactions of the Company and perform legal services on the
same basis that they provide such services to their other clients.

168
 INDEPENDENT AUDITORS

Punongbayan & Araullo, through its partner Christopher M. Ferareza, audited the financial statements of the
Company annexed to this Prospectus, namely the Consolidated Audited Financial Statements for December 31,
2016, 2015, and 2014.

The Company has not had any material disagreements on accounting and financial disclosures with our current
external auditors for the same periods or any subsequent interim period. Punongbayan & Araullo has neither
shareholdings in the Company nor any right, whether legally enforceable or not, to nominate persons or to
subscribe for the securities in the Company. Punongbayan & Araullo will not receive any direct or indirect
interest in the Company or in any securities thereof (including options, warrants or rights thereto) pursuant to or
in connection with the Offer. The foregoing is in accordance with the Code of Ethics for Professional
Accountants in the Philippines set by the Board of Accountancy and approved by the Professional Regulation
Commission.

The following table sets out the aggregate fees billed for each of the last two fiscal years for professional
services rendered by Punongbayan & Araullo, excluding fees directly related to the Offer.

2015 2016
(in P)
Audit and audit-related fees
Audit services 790,782.71 2,022,092.80
Tax fees* 234,080.00 -
All other fees** - 12,544.00
Total 1,024,862.71 2,034,636.00
*Tax fees were paid to Punongbayan & Araullo as compensation for their conduct of a full tax compliance review in 2015.
**All other fees correspond to payment for the Audit Report prepared by Punongbayan & Araullo in support of CLIs increase in
authorized capital stock in 2016.

Under the Manual, the Audit Committee shall perform the following functions in relation to the audit and
review of the Companys financial statements: (i) provide oversight of the Companys external auditors; (ii)
review and approve audit scope and frequency and the annual internal audit plan; (iii) discuss with the external
auditor before the audit commences the nature and the scope of the audit, and ensure coordination where more
than one audit firm is involved; (iv) consider the appointment of an independent external auditor, the audit fee,
and any question of resignation or dismissal; (v) receive and review reports of external auditors and regulatory
agencies, where applicable, and ensure that management is taking appropriate corrective actions, in a timely
manner in addressing control and compliance functions with regulatory agencies; (vi) review the quarterly, half
year and annual financial statements before submission to the Board of the Directors; and (vii) evaluate and
determine non-audit work by external auditor and keep under review the non-audit fees paid to the external
auditor both in relation to their significance to the auditor and in relation to the Companys total expenditure on
consultancy.

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 ANNEXES

1. Audited Financial Statements of the Company as of and for the years ended December 31,
2016, 2015 and 2014

Report of Independent Auditors

Statements of Financial Position as at December 31, 2014, 2015 and 2016
Statements of Comprehensive Income for the years ended December 31, 2014, 2015
and 2016
Statements of Changes in Equity for the years ended December 31, 2014, 2015 and
2016
Statements of Cash Flows for the years ended December 31, 2013, 2014 and 2015
Notes to Audited Financial Statements
Independent Auditors Report on Supplementary Schedules

2. Santos Knight Frank Real Estate Industry Study dated September 16, 2016

170
 CEBU LANDMASTERS, INC.
10th Floor, Park Centrale Tower
Cebu I.T. Park, J.M. Del Mar Street
Lahug, Cebu City
Tel: +63 32 401-1120
www.cebulandmasters.com

ISSUE MANAGER

BDO Capital & Investment Corporation

20th Floor South Tower, BDO Corporate Center
7899 Makati Avenue
0726 Makati City
Philippines

JOINT LEAD UNDERWRITERS AND BOOKRUNNERS

BDO Capital & Investment Corporation BPI Capital Corporation

20th Floor South Tower, BDO Corporate Center 8/F, BPI Building
7899 Makati Avenue Ayala Avenue cor. Paseo de Roxas
0726 Makati City 1226 Makati City
Philippines Philippines

LEGAL COUNSEL TO THE ISSUER

Angara Abello Concepcion Regala & Cruz

22/F ACCRALAW Tower Second Avenue Corner 30th Street
Crescent Park, West Bonifacio Global City
0399 Taguig Metro Manila
Philippines

LEGAL COUNSEL TO THE

ISSUE MANAGER AND JOINT LEAD UNDERWRITERS

SyCip Salazar Hernandez & Gatmaitan

SyCipLaw Center
105 Paseo de Roxas
Makati City 1226
Philippines

INDEPENDENT AUDITOR
Punongbayan & Araullo
20/F, Tower 1, The Enterprise Center,
6766 Ayala Avenue
1226 Makati City
Philippines

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