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February 12, 2018

SMC’s P700-B airport project grounded by the ICC

IT looks like the plan of San Miguel Corp. (SMC) to build a P700-billion airport project will have to wait a little longer. The Investment Coordination Committee (ICC) of the National Economic and Development Authority (Neda) needs more time and is asking the conglomerate for its tack on how it will proceed with this big-ticket project. I hope that this is just part of the government’s normal due diligence on unsolicited project tenders, as what Undersecretary Rolando G. Tungpalan says. Indecision could cause the project to be caught in a bureaucratic web. Such delays usually jack up the project cost. That there is an urgent need for state-of-the-art airport is an understatement. The Ninoy Aquino International Airport (Naia) is currently on life-support system, practically on its deathbed. Plans to revive it jointly by the country’s biggest corporations are also still under “close scrutiny,” even as the country’s airport traffic is at saturation point. While lawmakers are busy crafting ways on how to stay in power forever, the public suffers from utter government neglect. Traffic gridlock in Edsa has gotten to be nauseatingly choking, and Metro Rail Transit’s woes have turned for the worst. No worries though, Spox Harry L. Roque Jr. says, because President Duterte still enjoys public support based on latest surveys. This present dispensation can ill afford to pass up SMC’s proposal. Under the build-operate-transfer (BOT) scheme, which this project is going to be undertaken, the government spends nothing. SMC puts up the funding, builds the airport, gets paid by operating it for 50 years and turns over the project to the government.
(Source: Business Mirror, 17 January 2018)

The development of international airports is among the major planks of the Duterte administration’s massive infrastructure program. However, while several airport projects have been proposed, the government has yet to decide on a comprehensive airport development plan for Luzon. Ongoing projects in Luzon include the expansion of the Clark International Airport. The contract has been awarded to Megawide-GMR consortium, the firm constructing the second terminal of Mactan-Cebu International Airport (MCIA). The government has also approved the modernization of the Ninoy Aquino International Airport (NAIA) and seven large corporations, including five with property development units, are considering forming a large consortium for the implementation of the project. Aside from these projects, a couple of holding firms have also submitted unsolicited proposals to develop airports in Bulacan and Sangley in Cavite. Colliers believes that the implementation of these projects should unlock land values in areas outside of the country’s capital. This should bode well especially for developers with massive landbank in these areas. 

Robinsons set to boost land bank

Robinsons Land Corp. of the Gokongwei Group, is boosting its land bank in Metro Manila and parts of Luzon and Visayas and Mindanao, with majority of the P20-billion net proceeds from a proposed stock rights offering funding the lot acquisitions. Robinsons Land said in a regulatory filing it identified properties in Pasig City, Pampanga, other areas in Luzon, Visayas and Mindanao for potential acquisition for all its business segments. In Pasig, Robinsons Land is looking to acquire a 22 hectare lot worth P12 billion while it plans to purchase a 177-hectare land in Pampanga worth P2.25 billion. Robinsons Land said the acquisition of the lands started in the last quarter and that negotiations were ongoing to purchase other parcels. The property company plans to buy a 55-hectare lot worth P2.66 billion in Luzon, another 16-hectare land in Visayas worth P900 million and a 65-hectare property in Mindanao valued at P2.1 billion. Robinsons Land as of end September had a land bank of 36.6 hectares which could support the company’s growth over the next four to five years. The property firm said last week it planned to raise P20 billion from the offering of up to 1.1 billion common shares through a rights offering at a price of between P18 and P21 per share.
(Source: The Standard, 17 January 2018)

Colliers believes that the ushering in of the "golden age of infrastructure" lends support to the government's decentralisation push which should unlock land values in areas outside of Metro Manila and stimulate business activities in the countryside. Given this, we recommend that developers zero in on the thriving opportunities outside of the country's capital. Developers should follow the infrastructure projects lined up by the government and start acquiring land near the planned infrastructure projects. Ultimately, we see the government's infrastructure policy dictating the strategies of both local and national developers such as Robinsons Land. 

Land, Eton to spend P53 billion to develop properties in Pasig

The joint venture (JV) of property developers Ayala Land Inc. (ALI) and Eton Properties Philippines Inc. (EPPI) will spend some P53 billion to develop separate properties along the Pasig and Quezon City areas. The two firms will develop a 35-hectare property, which will be called Parklinks, which is co-owned through a 50-50 JV between ALI and EPPI. One of the properties is a 5-hectare lot along Quezon City’s C-5 area and the other is 30 hectares. The two properties will be connected by a bridge that will also be opened to the public. ALI owned the Quezon City side while Eton owned the property on Pasig City before the two firms combined ownership of the land. The bridge is a 110-meter long and 25-meter wide and will be designed to link Quezon City and Pasig over the Marikina river. This will create a new route that will help ease vehicular traffic in the northeast and east of Metro Manila. The bridge will have dedicated lanes for bikers and pedestrians, allowing a safe and convenient commute within and around the development. “With 50 percent of the 35 hectares devoted to open spaces, Parklinks will provide what is sorely missing along the busy C5 corridor—an abundance of open space,” said Anna Maria Margarita B. Dy, senior vice president and head of ALI’s strategic landbank management group.
(Source: Business Mirror, 18 January 2018)

We see private developers taking the lead in building crucial infrastructure to boost growth within their integrated communities. A key example is the planned construction of a bridge over Marikina River that will connect two parcels of land in Pasig and Quezon City owned by Ayala Land and Eton Properties, respectively. The properties cover the planned 35-hectare mixed-use estate along the C-5 corridor that will be developed by two of the largest property developers in the Philippines. Megaworld has submitted an unsolicited proposal to build a two-kilometer monorail from Uptown Bonifacio to the MRT Guadalupe Station in Makati. The proposed project should improve connectivity for employees and boost consumer traffic within Megaworld’s township development.



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