PHILIPPINE REAL ESTATE and RELATED NEWS in and around the country . . .

P338.8-B reclamation project proposed

Posted on January 31, 2016 10:50:00 PM
By Daphne J. Magturo, Reporter[]

THE SAN MIGUEL group and the developer of the Philippine Arena are proposing a P338.8-billion public-private partnership (PPP) project that will reclaim a part of Manila Bay, as well as build an expressway, a commercial area, a coastal sea barrier and flood control system.

“The project’s main purpose is to protect the Manila Bay coastline against flooding from the sea by means of a city flood barrier and coastal sea barrier, and provide an attractive urban waterfront development with space for new commercial activities. The coastal sea barrier also functions as an expressway that cuts the travel time between Bataan and the National Capital Region,” read a Jan. 11 project brief from the Public Works department.

“Along the barrier, the project also offers reclaimed land for urban and economic development. In between the reclaimed land and the present shoreline are mangrove forests that help develop the ecological value of Manila Bay.”

Information on the size of the proposed project was not immediately available. But at P338.8 billion, that’s triple SM Prime Holdings, Inc.’s reclamation deals covering a combined 600 hectares along Manila Bay.

“This is an unsolicited proposal first submitted by the New San Jose Builders, Inc. and proposed to be implemented through an alternative PPP scheme under the build-operate-transfer law, particularly a build-gradual transfer-build-operate-transfer hybrid modality,” the document read.

New San Jose, which actually filed the proposal back on Nov. 19, 2013, is the company behind the Philippine Arena in Bulacan, Bataan’s historical resort park Las Casas Filipinas de Acuzar, and residential condominiums in Metro Manila under the brand “Victoria,” according to its Web site.

The developer then partnered with San Miguel Holdings Corp. and the original proponent’s name was changed to Coastal Development Consortium on Feb. 2015, according to the project’s timeline.

Asked what drew his interest to partner with the developer, San Miguel Corp. President and Chief Operating Officer Ramon S. Ang replied in a text message yesterday: “[We’re] good friends.”

The department also bared the project cost breakdown in dollar terms: the flood barrier will require upfront investment of $1.4 billion, the expressway will cost $900 million and the coastal barrier, $5.4 billion. The concession period will run for 30 years.

The Philippine Reclamation Authority (PRA) is currently bidding out the P408.43-million consultancy contract to study how Manila Bay and communities around it can be affected by reclamation projects.

Environmental consultants who want to bag the deal will have more time to join the auction after the government extended the deadline to submit eligibility documents to Feb. 2 from Jan. 25, according to a Jan. 19 bid bulletin from the PRA. “In accordance with the maximum allowable period... the deadline for the submission of the eligibility documents is moved to February 02, 2016 at 12:00NN,” the document quoted Bids and Awards Committee Chairman Floro C. Urcia as saying.

Submitted documents will be opened on the same day and the PRA will draw up a short list of consultants composed of up to five groups, according to a Jan. 12 request for expression of interest.

“The consultant must be a reputable firm with at least 10 years of consulting business operation. In case of a joint venture or consortium/consortia, any member firm should have at least 10 years of consulting business,” the PRA said in the same document.

At least four companies have already bought eligibility documents, according to PRA Assistant General Manager for Reclamation and Regulation Joselito D. Gonzales.

Filinvest bags deal to develop Mimosa in Clark

By Iris Gonzales (The Philippine Star) | Updated January 29, 2016 - 12:00am

MANILA, Philippines – The Clark Development Corp. has issued a notice of award to the Filinvest Group for the lease, development, and management of the former Mimosa Leisure Estate in Pampanga.

The consortium of Filinvest Development Corp. and subsidiary Filinvest Land, the lone bidder, bagged the  right to lease the 201.64-hectare estate for a period of 50 years. The contract is renewable for another 25 years.

It submitted a financial bid of P800 million, the minimum acceptable bid.

“We are very bullish about the Clark area and the prospects of Clark as an international airport hub given the growth in this tourism corridor and the congestion experienced in Metro Manila airports,” said FDC president Josephine Gotianun-Yap.

Gotianun-Yap said the estate would be developed through a joint venture company with the consortium and CDC owning 95 percent and five percent, respectively.

Located in Clark Freeport Zone, the former Mimosa estate includes an operating hotel with 303 rooms and 34 villas under the Holiday Inn brand as well as a 36-hole golf course.

FDC has over 1,300 rooms in its portfolio under ownership, management and construction.

Among its portfolio of hotels are the Crimson Resort and Hotel in Mactan, Cebu and the Crimson Hotel in Alabang.

Also under construction is the Crimson Resort and Hotel in Boracay.

In Cebu, FDC manages the Quest Hotel, a development of FLI.

The group currently has 1,027 rooms in the planning stage in various areas around the country.

Gotianun-Yap said the Filinvest group brings its expertise in large-scale real estate development to the table, as it has been responsible for the development of both the 244-hectare Filinvest City in Alabang, Muntinlupa and the 70-hectare City di Mare at the South Road Properties in Cebu City, both as joint ventures with the government.

 “Together, FDC and FLI bring more than five decades of experience to manage and develop the former Mimosa property,” she said.

Earlier this month, FLI signed a joint venture agreement with the Bases Conversion Development Authority for the development of the  288-hectare section of Clark Green City.

 “We are excited about this addition to our footprint in Northern Luzon. Our interest in this area is a reflection of our confidence in the growth prospects of the Clark Special Economic Zone,” Gotianun-Yap said.

SM sees reclamation projects OK in 2017

Posted on January 24, 2016 08:15:00 PM
By Krista A. M. Montealegre, Senior Reporter [ ]

SM PRIME Holdings, Inc. expects its massive land reclamation deals with the cities of Pasay and ParaƱaque to hurdle all regulatory approvals next year, a company official said last week.

SM Prime Commercial Properties Group Senior Vice-President David L. Rafael told reporters last week the firm is set to present the master plan to the two local government units, which will then endorse it to the Philippine Reclamation Authority for approval.

SM Prime must secure all the permits from the government, the last of which will come from the National Economic Development Authority Board chaired by the President, before it can proceed with the development of the reclamation projects.

A new administration is expected to give the projects’ final approval, as President Benigno S. C. Aquino III is scheduled to step down from office in June.

“Siguro by 2017 okay na ’yan. Plantsado na naman lahat (Hopefully by 2017 it will be okay. Everything is ironed out),” Mr. Rafael said.

“It’s for the benefit of everyone. It’s going to mean progress, more jobs, more taxes. How can anyone oppose it?” he added.

The cities of Pasay and Paranaque, in 2013 and 2014 respectively, both awarded to the SM Group separate contracts to reclaim and develop around 300 hectares (ha) each in Manila Bay under their jurisdiction for P54.5 billion and P50.19 billion, respectively.

The company will spend over P100 billion for the reclamation and development of the two huge parcels of land, SM Prime President Hans T. Sy had said.

SM Prime will release the master plan prepared by US-based engineering and architectural firm Aecom for the 600-ha integrated project after obtaining government clearance.

The master plan incorporated more open space, which will account for 30% of the entire development, and focused on the transportation aspect of the project, Mr. Sy had said.

The SM Group last year won another reclamation deal, a P138-billion 1,500-ha project in Cordova, Cebu.

Meanwhile, SM Prime plans to transform the old Paskuhan Village in San Fernando, Pampanga into a mixed-use development after buying the 9.7-ha property last year, Mr. Rafael said.

The project may incorporate residential and commercial components, but it may no longer house a shopping mall since it is located right across SM City San Fernando, he added.

The real estate firm had purchased the land from the Tourism Infrastructure and Enterprise Zone Authority at P10,000 per square meter.

Also, the company will unveil the Acapulco Manila Galleon Trade Museum at the SM Mall of Asia in Pasay City in the second half of the year, Mr. Sy told reporters last week.

“We will try to revive the whole history of the galleon trade. We’re still in the final stage of coming up with the replica of the first galleon ever built in the Philippines,” Mr. Sy said.

No real estate bubble – BSP

By Lawrence Agcaoili (The Philippine Star) | Updated January 12, 2016 - 12:00am


MANILA, Philippines - Initial results of stress tests conducted by banks validated the assessment made by the Bangko Sentral ng Pilipinas (BSP) that there are no risks from the real estate market.

BSP Deputy Governor Diwa Guinigundo said initial results of the real estate stress tests conducted by banks showed the capital adequacy ratio (CAR) of banks would remain above the central bank requirement even if 25 percent of their real estate loan portfolio turns sour.

“At this point we don’t see any signs of stress in the real estate sector,” Guinigundo said.

The central bank has asked banks to submit data on their real estate portfolio to include exposure in socialized housing as well as debt incurred through the issuance of bonds to finance real estate activities.

“We now have a more comprehensive definition of the exposure to real estate. It’s more dependable,” he said.

Based on the new definition of the exposure of banks to real estate, Guinigundo said stress tests conducted by big banks showed that their CAR would still be above the 10 percent requirement set by the BSP and the eight percent threshold set under the Bank for International Standards (BIS).

“Even if they factored in a 25 percent souring of the loans on real estate, they are still above the 10 percent regulatory capital that we imposed on the banks,” Guinigundo said.

Aside from the BIS methodology, he said the BSP also used the International Monetary Fund (IMF) identification of asset bubbles.

“Those two tests will show that we are far from the so-called danger level,” he added.

The CAR of big banks stood at 15.48 percent on a solo basis and 16.42 percent on a consolidated basis as of end-June last year reflecting their continuous efforts to maintain adequate capital buffer against unexpected losses that may arise during times of stress.

The BSP stepped up its watch over the real estate sector as early as 2012 by ordering banks to disclose more comprehensive reports on their exposures to property industry.

The pre-emptive macroprudential policy measure approved by the BSP required stress tests for banks to determine if their capital will be enough to absorb credit risk that may arise from their exposure to the property sector.

Banks’ exposure to real estate jumped 21.8 percent to P861.22 billion in end-November from P708.88 billion in end-September last year. The sector accounted for 17.5 percent of banks’ total loan portfolio of P4.91 trillion as of end-November.

The BSP has set the cap on real estate loans at 20 percent of the bank’s total loan portfolio.

Guinigundo added that real estate developers are now more prudent after learning their lessons during the Asian financial crisis in 1997.

“We can also say that we are in touch with various real estate developers, the bigger ones, and it is very comforting to know that our developers have become more prudent, more discreet with respect to their expansion plans,” he said.

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