SM-Federal Land’s ultra-luxury project sees strong sales

June 28, 2019 | 12:07 am [ bworldonline.com ]

AT a height of 276.8 meters, The Estate will become the tallest building in the country. — COMPANY HANDOUT

PROPERTY firms SM Development Corp. (SMDC) and Federal Land, Inc. have already sold about 40% of The Estate, an ultra-luxury residential project which offers units valued at around P600,000 per square meter (sq.m.).

ST 6747 Resources Corp. (STRC) — the joint venture firm established for the project — is developing The Estate, located within the upscale Apartment Ridge area along Ayala Avenue and described as one of the last pieces of prime real estate in Makati.

“There’s a lot of interest within domestic market, you have certainly people and individuals who’ve made that choice, and then of course we have our investors and expats and we see that coming in through the pipeline in September, especially when we launch,” STRC Chief Operating Officer Bernie C. Casilan said during a media roundtable in Makati yesterday.

The 54-storey building will house 188 residential units with two to four bedrooms each. A two-bedroom unit covering 151 sq.m is priced at about P90-95.5 million, while a three-bedroom unit sized from 178-224 sq.m will cost anywhere from P112-153 million.

Mr. Casilan said they started selling the project at around P500,000 per sq.m., which has since increased to north of P600,000.

The Estate will offer eight penthouse suites with three bedrooms each, spanning from 407-497 sq.m. Four penthouse suites will have four bedrooms each, with sizes ranging from 617-764 sq.m.

Federal Land President Pascual M. Garcia III noted that they have already sold out all penthouse units, one of which was sold for around P400 million. He added that one buyer alone purchased an entire floor for the lower level units.

“It’s targeted to be the future home of not just the captains of industry, but perhaps even new investors into the country,” Mr. Garcia said in the same briefing.

STRC has engaged British architectural firm Foster + Partners led by world-renowned architect Norman Robert Foster to design the project. Mr. Garcia said this is seen to attract buyers from Asia as well.

“There are very prominent people in Asia who always want the opportunity to be part of a Norman Foster project so we do hope this is going to be achieved. Right now domestically, it’s much better success than we had even anticipated so we are very encouraged by this initial reception,” Mr. Garcia said.

At a height of 276.8 meters, Mr. Casilan said The Estate will become the tallest building in the country. It will also have 618 parking slots, with allocations of two to eight slots per unit.

The Estate will be the second joint venture project between the Sy and Ty families. They first joined forces for Ritz Towers also along Ayala Avenue.

“With the history that we’ve had between both families, this concept would be a good opportunity for now the second generation led by the chairman of SMDC, Mr. Henry Sy, Jr., and our chairman Mr. Alfred Ty to collaborate in this particular effort,” Mr. Garcia said.

Units are expected to be turned over by 2023. — Arra B. Francia

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Villar’s Starmalls to be renamed Vistamalls amid expansion

June 25, 2019 | 12:08 am [ bworldonline.com ]

STARMALL EDSA-SHAW BRANCH — WWW.STARMALLS.COM.PH

VILLAR-LED Starmalls, Inc. is changing its name to Vistamalls, Inc., aligning itself with parent Vista Land & Lifescapes, Inc.’s (VLL) mall expansion.

In a disclosure to the stock exchange on Monday, the mall operator said its shareholders have approved its plan to change the company’s name to Vistamalls, Inc.

The company will file the amendment with the Securities and Exchange Commission for final approval.

Incorporated in 1969, Starmalls was folded into the Villar group in 2015 when VLL agreed to buy 88.34% of the company’s shares for about P33.54 billion.

The listed firm operates malls in San Jose del Monte, Bulacan; Imus, Cavite; Balanga, Bataan; Taguig, Alabang, and along EDSA-Shaw Boulevard, among others. VLL President and Chief Executive Officer Manuel Paolo A. Villar earlier said that they have plans to renovate various Starmalls branches in the following years.

At the parent level, VLL is targeting to have 60 malls by 2020. It ended 2018 with a total of 31 malls, 52 commercial centers, and seven office buildings, covering a total of 1.4 million square meters in gross floor area.

The company also said it has commercial centers that are currently under construction in Taguig City, Las Piñas City, Pampanga, Cavite, Davao, Iloilo, Naga, Cagayan de Oro, and Iloilo, which are scheduled to be completed by 2020.

Starmalls booked a net income attributable to the parent of P651 million in the first quarter of 2019, 13% higher year on year. This came after a 15% increase in revenues to P1.77 billion in the same period.

The company attributed the positive performance to higher occupancy and rental rates of its existing malls, as well as the additional gross floor area of new commercial assets at the time.

Shares in Starmalls jumped 5.25% or 33 centavos to close at P6.62 each at the stock exchange on Monday. — Arra B. Francia

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SEC tweaks rule on REIT property manager

SEC tweaks rule on REIT property manager

June 21, 2019 | 12:31 am [ bworldonline.com ]

THE Securities and Exchange Commission (SEC) has proposed to amend rules covering the property manager of a real estate investment trust (REIT), in time for the issuance of such a product within the year.

In a notice posted on its website, the SEC said the amendments will cover Rule 7 of the Implementing Rules and Regulation of Republic Act No. 9856, otherwise known as the REIT Law.

Under the rule, a REIT is tasked to appoint a property manager that should be “independent of the REIT, its promoter/s or sponsor/s.”

The SEC is seeking to add provisions that would ensure the independence of the property manager, saying that “majority of the members of the board of the REIT property manager must be independent directors with working knowledge of the real estate industry.”

“The directors (including independent directors) of the REIT and its sponsors/ promoters cannot occupy more than 49% of the board of directors of the property manager,” according to the proposed amendment.

The commission also added a section that defined the “related party transactions committee,” which will review such deals.

“Majority of its members must be independent directors who shall vote unanimously in approving such related party transactions.”

The commission is requesting all interested parties to comment on the proposed amendments until July 4.

SEC Commissioner Ephyro Luis B. Amatong earlier said they can finish the consultation process within 15 days, after which they can approve the guidelines.

Issues on the independence of the REIT’s property manager have been one of three factors that dissuaded real estate industry players from launching such a product. The other two factors are the high minimum public ownership requirement of 40-67%, and the 12% value-added tax on transfer of real properties into the REIT vehicle.

The taxation issue has been removed following the passage of the Tax Reform for Acceleration and Inclusion law last year. On the other hand, while some companies have complained of the high MPO requirement, Mr. Amatong noted that there are some who are willing to comply with this.

For instance, Ayala Land, Inc. said it is prepared to file for a REIT offering under existing rules. It earlier announced that it wants to raise P25-26 billion through a REIT anchored on its prime office assets in the Makati Central Business District.

Once rules on the REIT property manager have been resolved, Mr. Amatong is optimistic that the first REIT listing in the country may finally hit the ground this year. — Arra B. Francia

DoubleDragon readies assets for REIT offer

June 24, 2019 | 12:30 am [ bworldonline ]

CRECENCIO I. CRUZ

DOUBLEDRAGON Properties Corp. is anchoring its next stage of growth on the hospitality and industrial sectors, after it completes its target of having 1.2 million square meters (sq.m.) in gross floor area involving mall, office, hotel and industrial space by next year.

“We still have a lot of growth beyond 2020 which we see coming from the hospitality and industrial sectors,” DoubleDragon Chief Investment Officer Marianna H. Yulo told reporters on the sidelines of the 3^rd Asia Pacific REIT Investment Summit in Parañaque City last week.

Ms. Yulo said this in line with the company’s preparations for a real estate investment trust (REIT) offering, noting that the capital they raise from the activity can be used to finance their expansion moving forward. “We’ll redeploy them (the funds) in the Philippines to further expand because I don’t think we’ve revealed yet our plans beyond 2020.”

The listed property developer is waiting for the release of final REIT guidelines, with the Securities and Exchange Commission (SEC) expected to lower the minimum public ownership requirement to 33% from 40-67% currently.

Ms. Yulo said the company is looking to place its more mature assets into a REIT, such as malls, office properties or a combination of both.

“We’re about 93% leased out on average for all our retail and we’re actually 100% leased out for all our office buildings as well…” Ms. Yulo explained.

“We don’t really intend to sell majority of our assets. We just want to show the investing public what the real value of the assets are in terms of the cash flows that we receive.”

SEC Commissioner Ephyro Luis B. Amatong had said investors should see the first REIT offer within the year, even as he had noted that an MPO requirement of up to 67% may still be in force.

Ayala Land, Inc. has already announced its intention to conduct a REIT offer under existing rules within the year, while other firms such as Megaworld Corp. and Robinsons Land Corp. said they will wait for the SEC to lower the MPO requirement.

DoubleDragon is scheduled to finish the year with 800,000 sq.m. of leasable space, on track to meet its goal of having 1.2 million sq.m. by 2020. This will come from a combination of 100 CityMalls, 5,000 hotel rooms carrying brands Hotel101 and JinJiang Inn, eight industrial projects under Central Hub, and office projects mostly in Pasay City.

It grew net income attributable to the parent by 46% to P767.30 million last quarter, as gross revenues increased by 33% to P2.44 billion in that period. — Arra B. Francia

REIT rules to be released by July

June 20, 2019 | 12:31 am [ bworldonline.com ]

By Arra B. Francia

Senior Reporter

THE Securities and Exchange Commission (SEC) said it can release guidelines on the issuance of real estate investment trusts (REITs) as early as July, without changing the minimum public ownership (MPO) requirement.

The commission is set to conduct another round of public discussions this month to finalize the qualification requirements of a REIT fund manager, which is one of three provisions that has dissuaded property players from issuing such a product.

“Kung wala masyadong tanong on the rules… by July finalize na (If there are not many questions on the rules… by July, we can finalize it),” SEC Commissioner Ephyro Luis Amatong told BusinessWorld on the sidelines of the 3rd Asia Pacific REIT Investment Summit in Parañaque on Tuesday.

Mr. Amatong said there is a pending issue regarding how much interest a fund manager can have in a REIT. The fund manager is tasked to implement the investment strategies of the REIT, oversee and coordinate its property acquisition, leasing, and operational and financial reporting, among others.

Rule 6 of the Implementing Rules and Regulations of Republic Act No. 9856 or the REIT law states that a fund manager must be independent of the REIT, its promoters, or sponsors. 

“Nakalagay sa batas ay independent, but I think what it really meant was external, na yung fund manager ay hiwalay from the REIT…so pwede naman palang may ownership stake yung REIT or yung sponsor in the property (Under the law, it says the fund manager should be independent, but I think it meant that it should be separate from the REIT… So it can have an ownership stake, the REIT or the sponsor in the property),” Mr. Amatong explained.

However, the rules that are being readied by July will still include the 40-67% MPO for REIT vehicles, against the 33% requirement that property players have said is the ideal public ownership level.

Mr. Amatong said the SEC decided to iron out the rule on REIT fund managers first since it was a concern for all industry players, whereas some companies are already comfortable with the existing MPO requirement.

“Ang lumalabas, may mga willing to comply with the MPO. Pero the issue of the property manager, issue siya for all. So inuna namin kasi applicable to all, lahat gusto may stake sila in the property manager or the fund manager (It turns out, there are some who are willing to comply with the MPO. But the issue on the property manager, it’s an issue for all. So we prioritized that, everyone wants to have a stake in the property manager or fund manager),” he said.

With the amendment for the rule on REIT fund managers, Mr. Amatong is optimistic that the country will see the first REIT issuance this year.

Ayala Land, Inc. (ALI) said last April that it is preparing a REIT offering where it could raise about P25-26 billion within the year. This comes a decade after the REIT law was enacted in 2009.

Mr. Amatong also said that “about one or two” companies have already expressed interest that in conducting a REIT offering with the current MPO requirement.

Aside from issues on the REIT fund manager and high MPO requirement, property players were previously concerned with the 12% tax on the transfer of real properties once they place their assets in a REIT. This rule however has been removed following the passage of the Tax Reform for Acceleration and Inclusion Act last year.

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Clark sports complex to be completed by Aug.

June 20, 2019 | 12:09 am [ bworldonline.com ]

New Clark Sports Complex 2019 SEA GAMES FACEBOOK ACCOUNT

CLARK, Pampanga — AlloyMTD Philippines, the contractor of the 9,450-hectare New Clark City, is expected to complete the 40-hectare sports complex by Aug. 31, ahead of the government’s target of Oct. 15.

“We are on track of meeting the actual deadline set by the government of finishing it by Oct. 15. And we are actually eyeing to meet our self-imposed deadline of Aug. 31, or within the next 73 days,” AlloyMTD President Patrick Nicholas P. David told reporters on Wednesday.

“We just want to be ahead of the curve,” he said, noting that work on the project began on March 15, 2018.

To recall, Malaysian firm MTD Capital Berhad won the bid to develop a 220-hectare National Government Administrative Center (NGAC) in New Clark City. AlloyMTD is the Philippine unit of MTD Capital.

Phase 1 of the project involves the construction of the sports complex — the venue of the Southeast Asian Games, which will run from Nov. 30 until Dec. 11, 2019. It will have an open field stadium with 20,000 seats, an aquatic center with 2,000 seats, and an athletes’ village.

According to Mr. David, they have 8,000 workers assigned to the project. Construction is on-going seven days a week. 

Meanwhile, Mr. David noted some countries have approached the company to inquire if their athletes can train at the sports complex, in preparation for the upcoming 2020 Olympic Games in Tokyo, Japan.

“We were also approached by some countries to train their athletes here before heading to Tokyo for the Olympics,” he said, without identifying the countries.

Parts of the complex will be opened to the public, while majority of the facilities will be available by reservations, Mr. David said.

There are five phases of development for the NGAC project, which was patterned after Putrajaya in Malaysia, and Sejong City in South Korea. The government is planning to transfer some department offices and agencies to Clark, in an effort to decongest Metro Manila.

“The government offices in Manila are scattered all over the city, and for the public, it’s very difficult for them if they have to deal with several ministries, to go from one place to another…You know I think, we own the land, it is available, it will be accessible through rail, train, highways, so I think it really makes sense to consider moving here. In fact Indonesia is going to move their capital outside of Jakarta,” Finance Secretary Carlos G. Dominguez III said.

As an example, Mr. Dominguez said the Department of Agriculture (DA), located in Quezon City, is not very accessible for farmers.

“For instance, why should the DA be in Metro Manila? How many farmers can they actually access there? Not a lot, di ba? That’s just one example,” he said. — Reicelene Joy N. Ignacio

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Local property mart ready for REITs

June 19, 2019 | 12:31 am   [ bworldonline.com ]

A man looks at a screen displaying news of markets update inside the Bombay Stock Exchange (BSE) building in Mumbai, India, May 23. -- REUTERS

THE Philippine property market is well-prepared for the introduction of real estate investment trusts (REITs), as demand for more office spaces, residential projects, and commercial centers complements regulatory authorities’ willingness to amend rules that initially hampered its implementation.

At the third Asia Pacific REIT Investment Summit yesterday, industry executives discussed how regulations for REITs have come a long way in the Philippines since they were first crafted by local authorities a decade ago.

“The Philippines is ready, all the fundamental components are there to go: tax authorities and Securities and Exchange Commission (SEC) are working on it,” real estate consultancy firm Santos Knight Frank Chairman and Chief Executive Officer Rick Santos said during the panel discussion.

While the REIT law, or Republic Act No. 9856 was passed in 2009, taxation issues and a higher public float requirement have dissuaded companies from participating in the investment vehicle.

The current rules state that REITs must have a minimum public ownership level of 40-67%, which the SEC has recently resolved to bring down to 33%. On the other hand, the implementation of the Tax Reform for Acceleration and Inclusion Act has removed the supposed 12% tax on transfer of real properties.

The SEC however has yet to issue the final rules reflecting the promised amendments.

“I understand that the SEC and BIR (Bureau of Internal Revenue) are very close to these amendments. Whether or not they (companies) can do it under existing rules, we want to see the regulators make good on their moves,” ING Bank Country Manager Hans B. Sicat said during the panel discussion.

So far, Ayala Land, Inc. is the only firm that has expressed its interest in conducting a REIT offering under existing rules. The listed property developer wants to raise about P25-26 billion from the offering anchored on its prime office assets in Makati.

“We’ve been waiting for over 10 years, so retail (investors) and certainly institutional investors will look forward to it,” Mr. Sicat said.

Mr. Santos added that the strong demand for office spaces driven by the business process outsourcing sector and Philippine offshore gaming operators is bound to continue in the following years.

“I think there is a lot of momentum and I hope to see the first successful REIT off the ground soon. Office will probable lead the way, then retail will follow. We’re optimistic, we’re hopeful, and we’ve been patient,” Mr. Santos said.

The introduction of the final REIT rules is seen to boost investments in the local property market, which Mr. Sicat said was affected by the slow regulatory environment.

Atchison Consultants Managing Director Ken Atchison said emerging markets in the region, including Vietnam, Thailand, and the Philippines are already drawing investor interest.

“In property investment per se, nominal GDP growth drives property returns. Where is the growth of nominal GDP? It’s in the Philippines, Thailand, Vietnam. That’s where it’s taking place, and that’s where the property returns will come from,” Mr. Atchison said during the same panel discussion.

Mr. Atchison said that investors should watch out for emerging sectors such as student housing, which he noted would be needed in fast-growing cities.

For his part, UBS Investment Bank Global Head of Real Estate Fergus Horrobin cited logistics as one of the trends that are becoming popular in the Asia Pacific region because of the rise of the e-commerce industry.

“(Logistics) has become very intensive and attractive to investors,” Mr. Horrobin said. — Arra B. Francia

Empire East to develop condo complex in Pasig-Cainta area

June 13, 2019 | 12:07 am [ bworldonline.com ]

OFFICIALS of Empire East Land Holdings, Inc. (ELI), led by (second from left) Director Kevin Andrew L. Tan, Chairman Andrew L. Tan, and President and CEO Anthony Charlemagne C. Yu, attend the company’s annual stockholders’ meeting on Tuesday. — COMPANY HANDOUT

EMPIRE EAST Land Holdings, Inc. (ELI) will unveil over 3,000 residential condominium units this year within a recently launched township in the Pasig-Cainta area.

In a statement issued Tuesday, the listed property developer said it will build a 38-tower, high-rise residential complex in Empire East Highland City. This is the company’s 24-hectare township being jointly developed with parent Megaworld Corp.

Located along Felix Avenue at the boundary of Pasig City and Cainta, Rizal, Empire East Highland City will feature an elevated city concept in order to adjust to its uphill location.

The development will have an elevated green park that will lead residents to the Highland Mall and to ELI’s residential complex project.

“Our property offerings have made the residents’ comfort and convenience a true priority, upgrading their experiences in a way that contributes directly to their happiness and well-being,” ELI President and Chief Executive Officer Anthony Charlemagne C. Yu said in a statement.

Megaworld earlier said it will spend P20 billion over the next 10 years to develop Empire East Highland City with ELI. The first phase of the township will involve the Highland Mall, which will have a gross floor area of 58,000 square meters (sq.m.) and is scheduled to open by the end of 2020.

The township will also include mixed-use towers, retail areas, an 8,000-sq.m. green and open park, and a 500-seating capacity church.

Megaworld earlier said that it is banking on the large population in Cainta to boost the demand for the residential units to be launched in the township.

In 2018, ELI said it sold projects covering almost 184,000 sq.m. of floor area. At the same time, the company completed the construction of about 95,000 sq.m. of living space and turned over more than 2,700 condominium units across nine residential towers.

Since its establishment in 1994, the company said it has completed 110 towers with about 17,000 condominium units. This is in addition to 7,700 residential lots at its horizontal developments.

The listed firm’s net income attributable to the parent grew eight percent to P215.76 million in the first quarter of 2019, on the back of a five percent increase in gross revenues to P1.23 billion.

ELI is part of the property business of tycoon Andrew L. Tan. His holding firm Alliance Global Group, Inc. also has core investments in liquor through Emperador, Inc., gaming through Travellers International Hotels Group, Inc., quick-service restaurant through Golden Arches Development Corp., and infrastructure through Infracorp Development, Inc.

Shares in ELI stood at 47 centavos each on Tuesday, 1.05% lower compared to the previous session. — Arra B. Francia

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