Posted on August 14, 2012 10:17:53 PM
[ BusinessWorld Online ]
BY DIANE CLAIRE J. JIAO, Senior
Reporter
AYALA LAND, INC. (ALI) was named the
highest bidder as a Food Terminal, Inc. (FTI) auction finally pushed through
yesterday, with the developer’s P24.331-billion tender surpassing offers made
by two other leading property firms.
With prior attempts since the ’90s having failed, the Privatization and
Management Office (PMO) claimed the sale, which it described as a success, had
been helped by a rosy investment climate and optimism in the government.
The ALI bid was more than double the
government’s P10.248-billion base price for 74 hectares of the 103-hectare
industrial complex.
Gokongwei-led Robinsons Land Corp. had
the second-highest offer of P14.667 billion, while Andrew L. Tan-controlled
Empire East Land Holdings had the lowest bid of P11.248 billion.
Four other real estate giants --
Gotianun-led Filinvest Land, Inc., Sy-led SM Land, Inc., as well as Rockwell
Land Corp. and Century Properties Group, Inc. -- that had prequalified for the
auction did not submit tenders.
FTI is one of the largest industrial
lots in Metro Manila and it lies in a prime location in Taguig City, near the
South Luzon Expressway and the end of the C-5 highway. Given its proximity to
major thoroughfares, ALI hopes to develop the sprawling property into another
central business district (CBD). The firm already holds a portfolio of CBDs in
the cities of Makati, Taguig, Quezon and Cebu.
"The property will be the
southern gateway into Metro Manila, similar to our Vertis North, our northern
gateway development," ALI Chief Finance Officer Jaime E. Ysmael yesterday
said in a statement.
"With these two developments, we
are now well positioned to capitalize on the development opportunities of these
two growth centers, supplemented by the government’s planned intermodal
transport system," he added.
"Just as we envision Vertis North
to be the first transit-oriented CBD in the north, FTI will serve the same
purpose for the south."
Despite the whopping P24-billion bid,
he claimed that FTI was acquired at a "significant discount,"
especially given land values in nearby Makati and Bonifacio Global City.
Privatization officials were visibly
relieved at the success of yesterday’s auction. The last sale attempt in 2009
failed after the deadline for the submission of offers lapsed without any bids.
Sale plans were likewise scrapped in 2010 due to unfavorable market conditions
arising from the global financial crisis.
"The investment climate today is
positive, with our resilience from the global economic downturn and the dip in
borrowing costs for corporations," PMO Chief Privatization Officer Karen
G. Singson told reporters.
The private sector is also optimistic
given the government’s dedication to transparent bid procedures, she claimed.
The auction took roughly six hours as the PMO checked all bid documents in
front of the prospective investors.
"We are very happy not just with
the ALI bid, but more importantly, with its payment stream," Ms. Singson
said.
ALI pledged an upfront payment of
P19.465 billion by the closing of the auction. The remainder will be paid a
year after.
"This is the upside we wanted for
the government: immediate development in that area. We hope to see increased
employment, access and transportation once Ayala begins its work," Ms.
Singson said.
The government should also expect a
kick in its revenues this year because of the privatization, Ms. Singson said.
At least half of the sale proceeds will go to the National Treasury,
particularly the funds for the Agriculture and Agrarian Reform departments. The
other half will go to FTI for the payment of its liabilities.
Tax collections should also benefit
with the taxes due on ALI’s upfront payment, which will be pegged on zonal
values.
Julius M. Guevara, associate director
of property consultancy firm Colliers International Philippines, lauded the FTI
sale and called it a win-win situation both for ALI and the government.
"The FTI acquisition is a
significant win for Ayala Land since it further bolsters their land bank. The
substantial spread above the minimum bid is also strategic, since it allows
them to secure the property and also deprives their competitors of the
opportunity to develop one of the last parcels of land of this size close to
Manila’s CBDs," Mr. Guevara said in an e-mail.
"This is also a huge success for
the government, which after lowering their minimum bid probably did not expect
to receive a bid as high as they did today," he continued.
The government had considered a
P13-billion price tag last year.
FTI is the first major government
asset to be privatized under the Aquino administration. The PMO will now
conduct one final review of ALI’s bid documents and requirements before it
endorses the offer to the Privatization Council.
This post-qualification process should
be concluded in five business days, Ms. Singson said. The notice of award
should also be issued to the firm in the next 15 business days. Formal turnover
will come no later than Dec. 31 this year.
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