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SM keen to buy state-owned FTI complex

Posted on April 25, 2011 09:37:00 PM [ BusinessWorld Online ]
BY NEIL JEROME C. MORALES, Reporter
THE SM group of companies has been the latest developer to renew its interest in acquiring the state-owned Food Terminal, Inc. (FTI) complex in Taguig City for commercial and residential projects.
Officials of the conglomerate said they were keen to buy the lot measuring over 100 hectares rather than just leasing it from the government.
“I like to purchase land because there is land appreciation,” Henry T. Sy, Jr., vice-chairman and chief executive of property firm SM Development Corp., said in a chance interview.
“We will check it out. Of course at the rate that we are expanding, we might need more and more land,” Mr. Sy said.
Jose T. Sio, the chief finance officer of SM Investments Corp., confirmed this.
“We are interested in knowing the terms,” Mr. Sio told BusinessWorld at the sidelines of a press briefing last week.
“We would like to buy because our balance sheet is strong enough to absorb it,” Mr. Sio said.
If government privatization efforts push through, the SM group could end up competing with companies that have similarly expressed interest in the lot: Ayala Land, Inc., Empire East Land Holdings, Inc. of property tycoon Andrew L. Tan, Filinvest Land, Inc. and Robinsons Land Corp.
FTI has long been in the list of properties the government wants to privatize in a bid to trim its budget deficit. Plans to sell it for at least P13 billion were scrapped in late 2009 and March last year due to unfavorable market conditions arising from the global financial crisis.
The SM group had expressed interest in the site back in 2009 but no deal pushed through.
Empire East Land, meanwhile, offered to buy the site for P14 billion early this year.
But the Finance department has yet to issue the terms for bidding out the site to the private sector.
“[We have] not decided yet. Definitely [we will have a decision] this year but not necessarily in the first half,” Finance Undersecretary John Phillip P. Sevilla said in a text message yesterday when asked whether government was amenable to selling the lot outright instead of just leasing the space out.
The FTI property is advantageous to property firms “because it is the last large track of land” in the area, Lindsay Orr, chief operating officer of global property consultancy firm Jones Lang LaSalle Leechiu, said in a phone interview.
Mr. Orr said the FTI property is strategic location being adjacent to the Terminal 3 of the Ninoy Aquino International Airport.
Mr. Sy went on to note that the site is suitable for a long-term mixed-use development.
“Everything should be complete from shopping center to residential to commercial and offices that will be mostly call centers,” Mr. Sy said.
Shares in holding firm SM Investments Corp. closed P1 lower at P555 each yesterday.
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