Ayala Land cashes in on FTI
Property firm starts selling lots at former gov’t complexBy Doris C. Dumlao |Philippine Daily Inquirer
Property giant Ayala Land Inc. has started to unlock values from the Food Terminal Inc. property in Taguig City, now called “Arca South,” selling a number of commercial lots to ignite development in the 74-hectare landbank it acquired from the government last year.
In a briefing last week, ALI chief finance officer Jaime Ysmael said ALI sold about 17 commercial lots in varying sizes—typically ranging between 2,500 and 3,000 square meters—based on a headline price of P150,000 to P155,000.
“It’s intended not only to generate liquidity and monetize part of what we paid for FTI but, at the same time, accelerate the rate of development … this is what we’ve been doing in previous developments,” Ysmael said.
ALI earlier estimated that its acquisition price of FTI per square meter was a little over P32,000—a significant discount to Makati and BGC land values. ALI won the property through a public bidding with a net present valuation of P23.9 billion. Including value added tax, total cost is estimated at P27 billion.
FTI is the single biggest landbank acquired by ALI since taking over the Bonifacio Global City project in 2003. This accounted for bulk of the company’s landbanking cost last year.
“In Fort Boni, when we took over in 2003, the first order of business for us was to sell off [commercial lots] in peripheral areas. That way … we can actually pay down debt which, at that time, was quite substantial. At the same time, [this is to] encourage other people to build faster and help in timing the development. That’s really the development model,” he said.
ALI gave an average discount of 10 percent to the commercial lot buyers because a lot of them availed of an early payment package, Ysmael said. The buyers can use these lots to put up offices, a vertical school, hotel, retail center or even a residential project. “It’s flexible,” he said.
Ysmael said the FTI master plan, which would likely take 10 to 15 years to develop, was similar to ALI’s “Vertis North” project, a large-scale mixed-use urban hub comprising about 45 skyscrapers at the heart of what is envisioned to be the central business district of Quezon City.
He said the recently sold 17 commercial lots would accommodate new buildings, while ALI itself would put up its own, likely at least 10 to 20 buildings. But unlike the skyscrapers in nearby BGC, typical height of the FTI buildings will only be around nine stories. The height restriction is due to its proximity to the Ninoy Aquino International Airport, at present the main international gateway to Metro Manila.
“The development model in FTI is kind of unique. To gain additional areas, we’ll have a below-ground type of main highway, something that has been done in other countries. This will allow us to recover, maximize space,” Ysmael said, estimating a one-kilometer length for this underground highway.
While planned as a mixed-use development, ALI’s projects in Arca South will be “predominantly” residential, Ysmael said.
Also, the lack of access points to FTI will be addressed by an intermodal transportation terminal hub that the government plans to implement in the complex. This six- to seven-hectare terminal hub is expected to be a government project, but if it were to be offered under the public-private partnership framework, Ysmael said it would be something that ALI would be interested to bid for.
“We’ve operated terminals in the past,” he said.
ALI assumes that the transportation hub would be finished within the term of President Aquino, which expires in 2016.