BCDA floats payment option to settle land row with Taguig

Posted on June 30, 2013 10:38:04 PM [ BusinessWorld Online ]

THE BASES Conversion and Development Authority (BCDA) is considering various options to settle its row with the city of Taguig on the use of the Bonifacio Global City area which SM Aura Premier now occupies, including outright payment for the land, the head of the agency said in a recent interview.

“One of the options we are looking at is to get Taguig to buy the land so BCDA will be able to get just compensation and the soldiers get what they deserve. Essentially SM [Prime Holdings, Inc.] can advance payment to Taguig,” BCDA President Arnel Paciano D. Casanova said.

Asked on the estimated value of the land on which the mall now sits, Mr. Casanova replied: “P5 billion.”

Neither the city of Taguig nor the SM group would comment on the development, with the city’s public information office saying the Office of the Mayor had yet to receive a formal proposal and SM Investments Corp. (SMIC) -- the parent of SM Prime -- insisting the issue was between BCDA and the local government.

“BCDA has to negotiate with Taguig which is SM’s landlord. SM is just a lessee of Taguig’s land,” Corazon P. Guidote, SMIC vice-president for Investor Relations, replied via text when asked for comment.

BCDA ceded the area concerned to Taguig City in 2008 as part of a 2004 settlement of another land issue between the two parties. Consequently, Taguig City now owns the title to the land.

The agency now argues that building a mall on the land violates Republic Act (RA) 7917, which amends Section 8 of RA 7227, or the Bases Conversion and Development Act of 1992, to read in part: “Approximately 40 hectares of land in Fort Bonifacio, Phase I, shall be retained as national government and local government centers, sports facilities and parks...” and the deed of conveyance between BCDA and Taguig City in January 2008 which states the land should be used for local government centers, sports facilities and parks.

SM Prime won the auction the Taguig City government conducted in 2007 to develop the land.

Mr. Casanova said SM Aura Premier cannot be considered a civic center because public areas of the facility like the rooftop park are “not open anytime to the public.”

He added that BCDA and its “constituents” -- soldiers -- have not benefited from the current situation.

RA 7227 provides, among others, that proceeds from the sale of portions of Metro Manila military camps shall be used partly to finance the transfer of military camps and the construction of new ones; the self-reliance and modernization program of the Armed Forces of the Philippines (AFP); concessional and long-term housing loan assistance and livelihood assistance to AFP officers enlisted men and their families; as well as rehabilitation and expansion of the AFP’s medical facilities.

Hence, Mr. Casanova said, payment for the land on which the mall now stands is one way by which “each one’s interest can be met.”

In an interview last June 12 with ABS-CBN News Channel, a counsel of SM Prime had stressed that it is Taguig City that now holds the title to the land and that the same 2008 deed of conveyance provided, among others, that “BCDA shall not place any restriction on the land use or zoning specified” in the settlement.

SM Aura Premier, which has a gross floor area of 234,892 square meters, is SM Prime’s 47th mall. It incorporates office towers, a chapel, a convention center, and mini-coliseum, among other features.

SM Prime grew its net income by 15% to P2.79 billion in the first quarter from P2.43 billion the previous year. Its shares closed at P16.30 apiece on Friday last week, flat from their Thursday finish. -- E. N. J. David        

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Ayala tops bidding for 5 Apollo towers

By Jenniffer B. Austria | Posted on Jul. 01, 2013 at 12:02am

[ manilastandardtoday.com ]

Property developer Ayala Land Inc. is close to acquiring five office buildings in Bonifacio Global City owned by Apollo Global Real Estate of US billionaire Leon Black.

A highly-placed source said Ayala Land submitted the highest bid to acquire Apollo’s stake in the five office buildings with a total gross leasable area of 147,000 square meters.

The source said Ayala Land’s bid was P5 billion higher than the next offer, which was submitted by Robinsons Land Corp.  The source did not specify the exact bids of Ayala Land and Robinsons Land.

Both groups earlier expressed interest in bidding for Apollo’s stake in the five office towers.

Apollo is selling its controlling stake in the five office towers in one of Manila’s prime business districts. The towers were built by The Net Group of businessman Carlos Rufino.

Rufino, president of the Net Group, which owns a 10- percent stake in the five towers, said earlier his company was open to retaining its stake in the buildings, while declining to elaborate.

Apollo Global Real Estate, which has about $9 billion of assets, is the property investment arm of New York-based Apollo Global Management LLC, a global alternative investment manager with $113 billion in assets run by Black, who was a co-founder of the company.

The towers on sale include the Net Plaza, Net Quad, Net Cube, Net Square and Net One Center which are fully leased. The tenants include Accenture Plc, HSBC Holdings Plc, Deutsche Bank AG and JPMorgan Chase & Co.

Strong demand combined with the growing outsourcing industry is expected to drive growth for the Philippine office market, the sales document showed. Bonifacio Global City is positioned to benefit from the tight office supply in the other two central business districts, Makati and Ortigas Center, according to the document.

Both Ayala Land and Robinsons Land are both bullish about the office space sector and are aggressively pursuing their expansion plans.

Ayala Land said earlier it was expanding its portfolio of office buildings with the opening of 60,000 square meters last year, bringing its total available office space to 509,000 square meters.

Strong demand from the business process outsourcing industry has been boosting the growth of the office space sector, supplemented by increasing requirements from the headquarters of multinational companies.

Meanwhile, Robinsons Land is set to complete two office buildings with a combined leasable space of 40,000 square meters. These new office buildings will add 41 percent to its current inventory and end the year with 273,000 square meters.

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Subic seen as new Guam

By Ric Sapnu (The Philippine Star) | Updated June 30, 2013 - 12:00am

MANILA, Philippines - Subic Bay Freeport could be the next Guam, Ronald Wang said in a statement read by Dr. Johnson Yang, chairman of the Subic-based Grand Pillar International Development, Inc.,

Wang, chairman of property developer Century 21 Subic Bay and also chairman and chief executive officer of Century 21 Taiwan, Century 21 Asia Pacific, and Fantai Real Estate Management Co., expressed high hopes for Subic as the next best thing in the real estate business.

“Subic is the next Guam in terms of economic growth,” Wang said.

Wang was the guest speaker in the groundbreaking ceremony for Grand Pillar’s Mi Casa Terrace, a P170 million three-storey commercial and office building project to be constructed in the Freeport Zone.

Wang said that when he was invited by Dr. Yang to Subic several years ago, he felt the passion in Subic and the opportunity that awaited in terms of leisure and commercial development.

“This is the reason why when I attended the 10th Asian Real Estate Association of America Global Summit held in Hawaii in May (2013), I was inspired and had the confidence to present to all the delegates and participants of the summit that Subic could be the next Guam,” he said.

Guam is a tiny island in the Western Pacific, which attracts more than one million tourists annually from Asia and America because of its more than 20 luxury hotels, duty free shops, indoor aquarium, entertainment venues, and several golf courses in what is dubbed as the Pleasure Island District.Subic is said to have the potential to replicate Guam’s real estate boom because of its natural attractions that include mountain forests and the Subic Bay.

Subic Bay Metropolitan Authority (SBMA) chairman and administrator Roberto V. Garcia, meanwhile, said that the proposed three-storey commercial building is another manifestation of the increasing demand for spaces intended for tourism-related businesses.

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Robinsons shelves $800-M IPO of retail group amid volatile mart

By Neil Jerome C. Morales (The Philippine Star) | Updated June 29, 2013 - 12:00am

MANILA, Philippines - The Gokongwei family’s Robinsons Retail Group is postponing its $800-million initial public offering (IPO), making it the second conglomerate to shelve plans of going public amid volatile market conditions.

The country’s second largest retailer is waiting for the right timing for its IPO, intended to accelerate its expansion program, its top executive said.

“I think you have to wait for the right timing,” said Lance Y. Gokongwei, president and chief operating officer of JG Summit Holdings Inc.

“It’s more important that we have a successful IPO, so we’ll wait for the right time.”

Robinsons Retail Group is a unit of property giant Robinsons Land Corp., whose parent firm is the Gokongweis’ investment holding firm JG Summit.

After hitting its 31st all-time high this year at 7,392.20 on May 15, the benchmark Philippine Stock Exchange index has since slipped, ending at 6,465.28 yesterday.

On June 13, the main index plunged 6.75 percent or 442.57 points to finish at 6,114.08, marking its deepest single-day drop since sinking by a record 12.27 percent on Oct. 27, 2008 at the height of the Lehman Brothers’ bankruptcy that resulted in the global financial crisis.

Gokongwei said Robinsons Retail Group has filed an IPO registration with the Securities and Exchange Commission for the share sale, which was previously targeted late this year.

Robinsons Retail Group is planning to sell around 35 percent of the company’s stocks to the public, Gokongwei said.

The retail group claims to be the country’s second largest retailer, next to SM Retail Inc. of the Philippines’ richest man Henry Sy. Robinsons Retail Group owns and operates 35 department stores and 73 supermarkets nationwide.

“Right now, access to capital is important to continue to gain market share in this industry and to participate in its consolidation,” Gokongwei said.

Proceeds from the IPO will be used for store expansion and possible acquisition of new chains or additional stores or brands, he added.

Robinsons Retail Group will focus on multi-format retailing that includes department stores, supermarkets, hardware and convenience stores, Gokongwei said.

Early this week, Travellers International Hotel Group Inc. pushed back its planned P36.8-billion IPO to September given the market’s volatility. Travellers Group, a joint venture between Alliance Global Group Inc. of property tycoon Andrew Tan and Malaysia’s Genting Bhd, is the company behind Resorts World Manila and Resorts World Bayshore along Manila Bay.

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$2-B Casino project in Pagcor City: 2 Phl firms to acquire 60% of Okada lot

By Zinnia B. Dela Peña (The Philippine Star) | Updated June 29, 2013 - 12:00am

MANILA, Philippines - The land ownership issue hounding the group of Japanese gaming tycoon Kazuo Okada may finally be resolved after two unnamed local groups signified interest to acquire majority ownership of  the  property for Okada’s $2-billion casino project.

In a briefing yesterday, Eagle II Holdings Inc. president Jose Leagogo said they have entered into a memorandum of understanding with two leading Philippine corporations, whereby the latter would acquire at least 60 percent of the casino project’s landowner.

The entry of the two firms would help Okada’s group comply with the country’s 40-percent foreign ownership limit.

Leagogo declined to name the two local groups, saying they are bound by a confidentiality agreement with the parties concerned.

He said the two groups have a month to conduct a due diligence  on the property which would be developed into a premier integrated entertainment and resort project in Manila’s future gaming hub.

Tiger Resort Leisure and Entertainment Inc.president Masahiro Terrada said the entry of the two unnamed corporations would allow Okada’s group to complete its gaming complex by the first quarter of 2015 or as scheduled.

The entertainment complex, dubbed Manila Bay Resorts, would comprise three hotels offering a total of 2,000 rooms, state-of-the-art gaming facilities, and an indoor man-made beach club covered in a huge glass dome.

Terrada said two of the hotels would be luxurious, while one would be a four-star hotel.

He said the project would also feature a Las Vegas-style water fountain, high-end and casual dining  restaurants, upscale retail shops,  trade halls, cinemas and ample parking lots.

The MOU follows the failed partnership between Okada and Robinsons Land Corp. of tycoon John Gokongwei after months of negotiations.

Among those earlier reported to have expressed interest in partnering with Okada is Rockwell Land Corp. of the Lopez family.

In July last year, the Okada group also signed  a deal with real estate tycoon Andrew Tan’s Empire East Land Holdings Inc. to build a P45-billion upscale residential condominium complex as a component of the $2-billion entertainment hub.

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