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Mall operator sues Robinsons

Posted on August 23, 2012 10:48:04 PM [ BusinessWorld Online ]

A QUEZON CITY mall operator is suing Robinsons Supermarket Corp. for ending its lease at the retail complex contrary to prior agreements, thus allegedly costing the site a major anchor that would have drawn in shoppers and smaller tenants.

Baesa Redevelopment Corp., a 60%-owned subsidiary of listed Philippine Tobacco Flue-Curing and Redrying Corp. (PTFCRC) is claiming over P37.620 million in damages after Robinsons terminated its lease agreement at the so-called Baesa Town Center, a disclosure yesterday showed.

The case has been filed with the Quezon City Regional Trial Court, it said.

“In particular, Robinsons Supermarket violated the no-termination clause in its lease agreement with Baesa Redevelopment,” it claimed.

The amount sought comprises of compensatory and exemplary damages, as well as attorney’s fees, suit costs, and litigation expenses.

“The filing of the subject case is expected to improve the financial standing of [PTFCRC],” the disclosure stated further.

In 2009, Baesa Redevelopment had completed the construction of mall, a 7,000-square-meter commercial property located on a 2.2-hectare lot on Quirino Highway, Quezon City.

The commercial complex had signed on major anchors such as Robinsons Supermarket and Handyman, but since its opening, business had not picked up as expected, PTFCRC had said.

This poor showing was mostly caused by Robinsons Supermarket’s pre-termination of its lease agreement in August last year, the firm alleged.

As a result, Baesa Town Center’s occupancy rate has only settled at 69% as of end-September last year.

Representatives of Robinsons Supermarket were not immediately available for comment.

Robinsons Supermarket is a unit of Robinsons Retail, which in turn forms part of Robinsons Land Corp., the listed property arm of Gokongwei-led JG Summit Holdings, Inc.

PTFCRC, for its part, was incorporated in 1951, consolidating its tobacco operations in Candon, Ilocos Sur in 1994. However, the company phased out its tobacco business in 2002, citing incurred losses due to declining export and domestic volumes and prices.

It has since leased out tobacco facilities to third-party groups on short-term lease or tolling arrangements.

PTFCRC had been listed under the local bourse’s Industrial (Food, Beverage, & Tobacco) sector until January this year, when it was reclassified to the property sector following the change in the firm’s principal business.

For the nine-month period ending May, PTFCRC hiked its net income by 26.80% to P13.53 million versus P10.67 million last year, as lower rental costs and general expenses offset the dip in revenues.

Revenues, mostly from rental income from the firm’s warehouses, fell by 3.15% to P63.75 million. PTFCRC shares were last traded on Aug. 2 at P14.58 apiece. -- Franz Jonathan G. de la Fuente     
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