Henry Sy’s SM Investments Corp. is acquiring five office towers in Bonifacio Global City (BGC) in Taguig, allowing the Sys to widen their presence in the booming outsourcing industry and challenge the country’s biggest office landlords, a source with knowledge of the matter said.
The towers, built by the Rufino family’s Net Group, are controlled by Apollo Global Real Estate of American billionaire Leon Black, who was reportedly looking to dispose of the assets.
The buildings are Net One Center, Net Square, Net Cube, Net Quad and Net Plaza, with a combined floor area of 148,000 square meters and an estimated annual net income of about P1 billion, the source said.
SM Investments officials declined to comment on Wednesday.
SM Group’s existing office building portfolio amounts to about 257,000 square meters in terms of floor area and it plans to open next year the Three E-com Center, which will add another 125,000 square meters, a company spokesperson said.
The move was seen as an aggressive bid to tap the country’s fast-growing business process outsourcing (BPO) sector. Industry group IT and Business Process Association in the Philippines sees revenues in the sector hitting $25 billion by 2016 from $13 billion last year.
Buying the towers in Bonifacio Global City also gives SM Investments a bigger footprint within the prime business district, where it built the SM Aura shopping center, and would also catapult it among the Philippines’s biggest office building operators.
The biggest is currently Andrew Tan’s Megaworld Corp., which has 450,000 sqm of BPO space at the end of 2012.
The deal was disclosed to the Philippine Stock Exchange on Wednesday as SM Investments said it acquired from CPI Asia Ten B.V. the latter’s “entire stake in 10 privately held property companies in the Philippines.”
It did not add details on the transaction but named the companies.
These are Crescent Park 14-678 Property Holdings Inc., 14-678 Property Holdings Inc., Crescent Park 6-24 Property Holdings Inc., 6-24 Property Holdings Inc., Crescent Park 18-2 Property Holdings Inc., 18-2 Property Holdings Inc., Crescent Park 6-3 Property Holdings Inc., 6-3 Property Holdings Inc., Crescent Park 19-1 Property Holdings Inc. and 19-1 Property Holdings Inc.
“The final amount of the consideration shall be determined at a later date and shall be subject to the execution of the proper implementing agreements,” SM Investments said in its filing.