Posted on October 20, 2015 10:11:00 PM [ BusinessWorld Online]
By Daphne J. Magturo, Reporter
PRIME Orion Philippines, Inc. is converting Tutuban Center in Divisoria into a mixed-use development and is doubling its leasable area, using Ayala Land, Inc.’s P5.6-billion investment.
“Tutuban will be changed into a master-planned development, a station where the south and the north lines will meet and coordinate,” Prime Orion Chairman Felipe U. Yap told reporters on the sidelines of the company’s annual stockholders’ meeting yesterday at the Makati Shangri-La Hotel.
Prime Orion is improving the mall complex to accommodate the transfer station of the P287-billion North-South Commuter Rail project, which will have a 56-kilometer (km) commuter rail from Tutuban to Calamba, Laguna, and a 478-km long haul rail from Tutuban to Legazpi, Albay.
The rail project is expected to boost the area’s daily foot traffic by 400,000 from the current 100,000.
“It will cater to the same kind of market, but it will have some improvements where the people will enjoy more privileges for the same price,” Mr. Yap said.
In August, Ayala Land said it is infusing P5.6 billion into Prime Orion in exchange for a majority stake in the company.
“It seems to me that the entire proceeds will be quite sufficient...to finance the project... but we don’t know until we get there,” Mr. Yap said.
Tutuban Complex, which sits on a 20-hectare property, currently has a 60,000 square meter gross leasable area that generates P400 million in annual revenue. The leasable area “can be more than double” once the the expansion is completed.
“If there are no regulatory requirements that will delay the project, as long as it’s within our control, then [we will do it] as quickly as possible,” Mr. Yap said.
Ayala Land is set to finalize the plan by mid-November, Prime Orion Corporate Secretary Daisy Parker said in the same event.
The property will likely have residential and commercial components, although it will “depend on the concept of Ayala,” he added.
Yesterday, Prime Orion’s shareholders approved Ayala Land’s subscription to 2.5 million common shares that are equivalent to a 51.36% stake. To accommodate the subscription, they also cleared the increase in Prime Orion’s authorized capital stock to P7.5 billion from P2.4 billion.
“The [annual leasing income] will grow very fast,” Mr. Yap said. “There is speculation that the market will be friendly and welcoming to a new development. We feel that we’re starting from the bottom and the entry of Ayala is very positive to us.”
Prime Orion’s shares shed six centavos or 2.96% to close at P1.97 apiece yesterday, while those of Ayala Land lost 55 centavos or 1.55% to P34.85.