By Ayen Infante
08/13/2010 [ tribune.net.ph ]
After the successful sale of the former Joint US Military Advisory Group (Jusmag) property, the state-owned Bases Conversion and Development Authority (BCDA) said it is readying the disposition through joint venture of another significant parcel in Bonifacio South.
BCDA has published a notice of invitation to firms seeking to challenge the unsolicited proposal of SM Land Inc. (SMLI) for the 33.1-hectare military area in Bonifacio South.
The property is composed of lands presently occupied in part by the Army Support Command and Special Services Unit of the Philippine Army and in part by the Bonifacio Naval Station and Philippine Marine Corps of the Philippine Navy.
These lands were transferred and subsequently titled to BCDA for disposition or sale. The property lies outside the areas earlier identified by President Aquino for long-term lease to generate funds to be used in augmenting the AFP modernization budget in his State of the Nation Address.
The joint venture proposal submitted to BCDA by SMLI would be subject to competitive challenge as required under the National Economic and Development Authority joint venture Guidelines.
SMLI’s proposal offers an upfront cash of P2 billion upon signing of the JV contract and secured yearly revenues, totaling P25.9 billion for 20 years, for a present value of P36,900 per square meter. Investment commitment of SMLI for the project stands at a minimum of P20 billion.
SMLI has also committed to advance the funds for and undertake the replication of military facilities affected by the development of the property. Final determination of the replication cost of affected military facilities is currently being undertaken.
Under the BCDA law, bulk of the disposition proceeds from Fort Bonifacio and Villamor Air Base will go to the AFP Modernization Fund which urgently needs more cash infusions as well as the AFP replication and relocation expenses. As of December 31, 2009, BCDA has generated P46.495 billion in disposition proceeds.
Under the Bonifacio South master plan, the proposed area for disposition would be developed into a medium- to high-density residential and mix use complex, with a strong institutional component and has a maximum allowable gross floor area of 1.355 million sq.m.
The property is located along Lawton Avenue and is separated from the JUSMAG property by the NAMRIA area and a sic-hectare strip of land retained by the Philippine Army.
The 2009 bidding for the JUSMAG property under Annex A of the NEDA JV Guidelines yielded a present value of secured net cash inflows of P31,111 per sq.m., under which the upfront cash was P1.5 billion upon contract signing, secured yearly revenues totaling P20 billion over 22 years and P700 million will be advanced for the replication of the military quarters occupying the JUSMAG property. Minimum investment for the development of the JUSMAG property is P22 billion.
The projected yields under proposals submitted by interested private sector proponents for both JUSMAG and the new area are way above third party appraisals of P15,000 per sq.m. and P8,000 per sq.m., respectively, conducted on the properties in 2009.
BCDA is confident that in this disposition, the government will be able to take advantage of the strong real estate sector at present. The disposition will also answer in part the urgent need for funds for the AFP Modernization Program and other government projects.