Vol. XXI, No. 179 [ Business World Online ]
Monday, April 14, 2008 | MANILA, PHILIPPINES
SAN MIGUEL Corp.’s new property unit and state-run Government Service Insurance System (GSIS) will jointly develop a P1.7-billion hotel in Makati, the first major property deal for the food and drinks group.
In a statement, GSIS President and General Manager Winston F. Garcia said his company and listed San Miguel Properties, Inc. would share ownership of and income from the hotel.
He said the investment would extend GSIS’s ability to pay benefits to members. The hotel will cater to high-end tourists and businessmen.
The San Miguel group wants to remould itself as a conglomerate with interests in property, power and mining, as well as food and drinks amid rising input costs for consumer companies and a sluggish home market. Last week, it kickstarted the local road show for its $400-million initial public offering for its domestic beer group.
Mr. Garcia said the hotel project would be a service apartment-type hotel. The GSIS is increasing its exposure to the real estate market to boost revenues amid low interest rates.
Property consultancy firms expect the hotel and leisure sector to figure more prominently in tandem with the surge in business process outsourcing (BPO) facilities and condominiums.
The Hotel and Restaurant Association of the Philippines expects hotel occupancy rates to rise to as much as 95% this year.
But a Tourism department report showed that the industry’s overall average occupancy stood at 73.4% at the start of the year, down from last year’s 75.74%.
Adjacent to Greenbelt 1 in Legazpi Village in Makati City, the hotel will have 500 rooms averaging at 50 square meters per room.
Construction is expected to start soon, and the hotel will start operating by January 2011.
GSIS will provide the land and San Miguel Properties will provide the initial funding for the construction and development.
The joint venture earlier tapped Hong Kong-based architectural firm Rocco Design to build the hotel.
San Miguel Properties is the surviving corporation following its merger with Monterey Farms Corp. in January 1998 and another San Miguel subsidiary, HOC Realty, Inc., in December 2002.
The listed property firm is engaged in property development, sale and leasing.
It has completed its Buenavista Homes and Primavera Hills projects in Cebu, Villa de Calamba in Laguna, The Legacy in Parañaque, and Wedge Woods subdivision in Silang, Cavite.
On Friday, shares of San Miguel Properties finished unchanged at P38.50. — Ruby Anne M. Rubio
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