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Ayala, Aboitiz property units ink Cebu deal

Posted on April 24, 2013 10:00:48 PM [ BusinessWorld Online ]
LISTED DEVELOPER Ayala Land, Inc. has inked an initial joint venture deal with AboitizLand, Inc. for the development of a number of properties in Cebu, AboitizLand’s home base, a disclosure by Ayala Land showed yesterday.
“Please be informed that Ayala Land has agreed in principle with AboitizLand to enter into a 50%-50% joint venture for the development of properties in Cebu. This joint venture with AboitizLand, a well-established and strong partner in Cebu, is consistent with the company’s (Ayala Land’s) growth strategy of establishing more developments in the major urban areas of the country, Cebu being one of the most progressive metropolitan areas in the Philippines,” the disclosure read.
The deal marks the second time the Ayalas and the Cebu-based Aboitizes have joined forces. Ayala Corp. and Aboitiz Equity Ventures, Inc. -- the listed parent firms of Ayala Land and AboitizLand, respectively -- teamed up in September last year for the bidding for the Mactan-Cebu International Airport development and rehabilitation public-private partnership project.
Ayala Land said it hopes to exploit the advantage of joining forces with a local property firm, combined with its own know-how in mixed-use property development, in further expanding the listed firm’s footprint in Cebu. “Through this joint venture, the company (Ayala Land) expects to generate synergies by combining the experience of AboitizLand in developing diverse real estate products in Cebu, with Ayala Land’s expertise in building a full range of real estate formats including large scale, integrated, mixed-use communities,” the disclosure added.
To date, AboitizLand has completed 14 residential and three commercial projects, and manages two leisure and two industrial developments, according to its Web site.
Prior to September last year, AboitizLand was the wholly owned subsidiary of unlisted Aboitiz & Co., Aboitiz Equity’s controlling shareholder.
Aboitiz Equity, however, announced on Sept. 28 last year that its board had approved the 100% acquisition of AboitizLand at a cost of P3.2 billion, in a bid to expand Aboitiz Equity’s earning capacity amid a growing domestic economy.
Shares of Ayala Land slipped by 50 centavos or 1.59% to P31 apiece yesterday from P31.50 last Tuesday. Shares of Aboitiz Equity rose by 95 centavos or 1.73% to P55.95 apiece yesterday from P55 last Tuesday. -- Franz Jonathan G. de la Fuente
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