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Gatchalian firm eyes Avida Land tie-up

Posted on September 24, 2012 10:01:46 PM [ BusinessWorld Online ]

GATCHALIAN-CONTROLLED Philippine Estates Corp. (PHES) hopes to seal a deal soon with Ayala-led Avida Land Corp. for the development of the former’s Metrotech Industrial Park property in Valenzuela City, a top PHES official said yesterday.

“Currently, we are in the final stage of our negotiations with one of the nation’s leading real estate developers, Avida Land, for a possible joint venture inside the 60-hectare property where Metrotech Industrial Park is located. This project will be the first and one of its kind in the bustling city of Valenzuela,” Elvira A. Ting, PHES president and chief executive officer, announced at the company’s annual stockholders’ meeting at One Corporate Center, Ortigas Center, Pasig City yesterday.

“We expect to close and conclude the deal within the next few days,” Ms. Ting added without elaborating.

She declined to give an estimate on project cost, saying the company will make “further disclosures” when ready.

Officials of Avida Land and those of its parent, listed Ayala Land, Inc., were not immediately available for comment.

Metrotech Industrial Park, formerly known as Plastic City Industrial Park, is located in Barangay Calumay in Valenzuela City and is one of the properties PHES currently holds for future development, according to the company’s 2011 annual report.

Last May, PHES authorized the negotiation of the terms and conditions for a possible joint venture with Avida Land for the said property’s development.

“The plan is to develop the area into a mixed-use urban complex consisting of residential condominium and townhouses, single-detached houses, as well as office condominiums that will be constructed to cater to the growing housing needs in that area,” Ms. Ting explained.

“We will also build BPO (business process outsourcing) centers.”

EXPANDING

Ms. Ting said PHES is likely to expand further in provinces north and south of Metro Manila that are now deemed more accessible thanks to recent road improvements there.

“A short drive from Manila using the newly-constructed CavitEx (Manila-Cavite Expressway) is the progressive province of Cavite. In Imus and General Trias, PHES plans to develop properties there into a middle-class residential community,” Ms. Ting said.

“Another growth area is Bulacan. The improvement and expansion of the NLEx (North Luzon Expressway) makes Bulacan an attractive area for future expansion,” she added.

“We are conducting research and best-use studies to ensure the success and viability of our future projects there.”

PHES was first incorporated in 1983 as Philippine Cocoa Estates Corp. to engage primarily in agriculture, shifting its business in 1996 to accommodate the entry of The Wellex Group, Inc. as its primary investor. It currently has one wholly owned subsidiary, Mariano Arroyo Development Corp.

Some of PHES’ completed projects include the Pearl of the Orient Tower in Manila, Pacific Grand Residences in Valenzuela City, Pacific Grand Villas and Pacific Grand Townhomes in Cebu, Jaro Grand Estates in Iloilo City, Pacific Grand Townhomes in Bulacan, and Pacific Grand Residences in Cavite.

PHES widened its first-half net loss to P12.56 million from P6.13 million the previous year, weighed by lower revenues and higher expenses.

Real estate sales fell 9.19% to P15.62 million versus P17.20 million in the same comparative periods, while cost of sales was roughly flat at P9.99 million versus P9.97 million.

“The company is continuously evaluating [a] number of alternatives and measures for generating liquidity to meet material commitments for capital expenditures for the development of projects,” PHES said in its end-June financial report.

Shares of PHES rose five centavos or 7.26% to 74 centavos yesterday from 69 centavos on Friday last week. -- Franz Jonathan G. de la Fuente         
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