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At the end of 2023, what is the footprint of Los Portales in Peru?

We currently have a geographic presence in 23 cities located in 10 regions. We have five business units, with urban development being the one that represents the highest level of sales in the business. We consider that our mission is to create formal housing in a country where 95% of housing is informal.

What was the turnover result achieved last year?

With preliminary results, among all business divisions, the company in 2023 will total sales of S/1,023 million, a profit for the year of S/124 million and an Ebidta of S/242 million. An important issue for us is the growth in the company’s assets. It has grown by 32% compared to 2019. We do have a very aggressive investment policy. We have a land bank of approximately 400 hectares. These are diversified in different places and that allows us to grow. Today Los Portales has a fairly healthy balance sheet that allows us to continue investing.

In all their years of history, they have had strong expansion processes. Is this the one that stands out the most compared to previous years?

I would tell you that, in terms of financial health, Los Portales is at its highest levels. This allows us to say that, moving forward, we want to have greater growth. Go from S/1,000 million to S/1,600 million in turnover in the next five years. Los Portales today has significant financial health and, despite the headwind of 2023, we have been able to deliver good results.

Where will business bets be in 2024?

The focus is mainly on social housing and apartments. We also want to invest and grow as hotel operators, but that will suddenly take more than a year. For that business division, the goal is to have 300 new rooms in the coming years. I wouldn’t tell you that it is a very long term, because we are already starting to work on having new hotel units as operators.

How much has the urban development division grown in 2023?

Last year we delivered more than 6 thousand lots, a total of 2,345 social housing and 427 apartments. In Peru, 40,000 formal housing units have been delivered in 2023 and we will deliver 7% of those formal homes. This data does not consider urban authorization.

The lack of water is one of the main problems when enabling urban land. How have you dealt with it?

That is one of the main problems. This is generated in two ways: with formal companies that carry out the studies and make the water drinkable or Sedapal when it covers the gap. Los Portales has developed 67 water schemes in recent years and we have transferred more than 300 water works to the EPS. What we are doing is assuming an active role, which is what the private sector should do today.

What is the investment level for this?

In the last 20 years, this represents an investment level of S/ 400 million. With this, we managed to deliver a volume of produced drinking water of 1.3 m3 per second. This is 4% of the water consumption in Lima (20 m3 per second). On average, we have provided drinking water to 380 thousand inhabitants nationwide.

“We are the most decentralized real estate company, with more billing and operations in regions”

Los Portales also provides direct financing to clients who cannot obtain it in the financial system. This year, how many loans were disbursed?

In Peru there is no mortgage banking for lots of land. So, we give it. Our current portfolio is US$442 million in 16,941 clients. It is important to say that the delinquency of this portfolio is controlled and is in the order of 0.5%. In 2023 alone, we have granted more than 6,500 direct loans.

And are the majority of clients from Lima or from the regions?

I would tell you that we are 55% in Lima and 45% in the province. We are the most decentralized real estate company.

We are still waiting for what may happen with the El Niño Phenomenon. What provisions are they taking regarding this?

We have a plan B already developed. We have estimated how much our sales could be affected, how much our collections could be affected and how our works could be affected. All of this implies an adjustment budget B. Already with experience, we have anticipated it and have it ready to execute. It goes into collections, sales, expenses and so on.

For the granting of direct financing, has refinancing been considered?

Yes. There is the possibility in some cases of applying refinancing, providing facilities. But, we will see it case by case.

Los Portales sold its stake in the parking unit last year. What decisions are you making as a company after leaving this business?

We sold a majority percentage to AC Capitales and the other of our partners, the Raffo Group, maintains a minority percentage. Of this (parking) unit, the ‘backoffice’ continues to be operated by Los Portales on a temporary basis. It has been a valid strategic decision by the shareholders. With this, we have redirected this strategic effort to other units such as housing, hotels or rentals in search of business maturity.

Under that logic, how are they strengthening the other divisions?

We are advancing in digital transformation. It has implied a cultural change within the company. Today, Los Portales has developed ‘business intelligence’ in all its business units. With this, we can identify where the main buyers come from. Based on this – and not on one’s intuition – we define where, for example, we place advertising. We are today in what we have called grade 3, which is the massive use of our systems. We hope that this will be fully integrated into the business soon. Instead of talking about sales, we will talk about the leads we generate. We have a convertibility of ‘leads’ into visits. And the visits, later, become sales. At some point, the idea is to think not only about how many sales we achieve but how many leads we generate.

In 2023, Los Portales also obtained financing, which business divisions will be prioritized?

Basically in urban development, social housing and apartments. We have two loans with multilateral organizations. Both are with the IDB: one is a loan and the other is a bond. They are in full compliance and we are analyzing new financing schemes.

Los Portales today has a plan B for the events that El Niño could bring, maintains Velaochaga. (Photo: Hugo Pérez)

In the social housing business, how much have they grown in 2023?

We have three products framed in the State’s housing programmes: Mivivienda, Techo Propio and Techo Propio direct. In 2023 we have had a growth of 17% in sales versus 2022. And, we project to grow 9% by 2024. Why don’t we project more? For The Child. So we are conservative.

There is also uncertainty over funding for housing subsidies. Does that worry you?

In the 2024 budget there is no bonus for Mivivienda, but there is for Techo Propio. The issue is that this should already be housing policy. It should be as a multi-year framework. Every year we have these problems. The private sector must be given predictability at this point. In principle, there is an unused part of last year’s budget that is going to be used this year. That covers you until April or May. Afterwards, an increase in the budget will have to be requested.

“In the social housing business, we project to grow 9% in 2024. Why not more? For The Child”

In the apartment business, how many more projects do you expect to add this year?

Our goal is to have between 7 and 10 projects developing during the year. We are in segments B and C with apartments between 35 and 100 m2 with prices of no more than S/ 440 thousand. Since 2021, Los Portales projects have had an Edge certification and in 2023 we obtained the Edge Champions, a certification granted by the World Bank. Our goal is to reach a turnover of S/300 million in the next two years.

“In the hotel business, our goal is to have 300 new rooms in the coming years”

To date, five hotels operate. Given the situation in the sector, how much has this business been affected?

Our vision in this business is to grow by 300 rooms in the coming years. This is a very hard-hit business, but I would tell you that we have a countercyclical vision. This is the moment where we see that there are opportunities in the market because there are companies and assets at affordable values. The issue of COVID and the protests have done a lot of damage. At the beginning of last year, all this took Peru off the tourism route. This business is very sensitive to this type of damage. However, in this division, we are generating a higher Ebidta compared to 2019. Our turnover in 2023 was S/51 million.



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