Biz Buzz: Cebu’s real estate scene sizzles

Cebu’s real estate scene sizzles

As more of the country’s property giants shift their attention and resources to Cebu, amid stiff competition in Manila, the Queen City of the South’s traditionally low-key homegrown players, too, have become more aggressive especially when it comes to snapping up prime pieces of real estate.

The most recent, and probably more exciting, transaction for Cebu locals was last week’s sale of a 20-hectare bayside property in Mandaue City, just beside the provincial capital.

The property was sold by controlling shareholder International Container Terminal Services Inc., led by billionaire Enrique Razon Jr., and minority shareholders for about P3.2 billion.

The buyer was regional property giant Hong Kong Land together with a little known company, Cebu Asian Rim Property and Development Corp., which a source privy to the transaction said was owned by the Gaisano clan, famous for their namesake retail chain.

This isn’t the first time the Gaisanos have entered into a high-profile joint venture. They signed last year a partnership with Ayala Land to develop a 12-hectare leisure-oriented project just across the Shangri-La Hotel on Mactan Island.

The Mactan project will be developed over the next three years, as soon as the master plan is finished in 2014, the source told BizBuzz.

But the Mandaue project presents an even bigger opportunity for the Gaisanos to make their mark on Cebu’s property scene, where top developers like Ayala, Aboitiz, SM, Robinsons and Filinvest continue to battle it out.

“It’s a very opportunistic type of scenario in the sense that it’s in Cebu, a place we are strong at, and with a formidable and credible partner,” our source said.

It was too early for the company to provide concrete details, but its partnership with Hong Kong Land could provide a preview given the latter’s success in the region—from a huge chunk of Hong Kong’s Central Business District (CBD) to another CBD in Singapore’s Marina Bay.

The developments are coming as the Gaisanos continue to evaluate their options for going public.

According to our source, the plan “is moving.” For those wondering if the Gaisanos would pursue a backdoor listing, which seems to be the trend nowadays, it appears that the Filipino-Chinese group still prefers the “most cost-efficient method, which is to go front-door” or an initial public offering. Let’s see.  Miguel R. Camus

GMA7’s new suitors

Like bees attracted to nectar, it seems that the list of suitors for GMA Network Inc. is growing.

It’s no secret, of course, that PLDT honcho Manuel Pangilinan has the country’s second largest television network in his acquisition crosshairs. This time, we hear he’s really bent on acquiring it after two unsuccessful attempts in recent years.

In fact, we’ve heard that a tentative meeting of the minds has been reached between the potential buyer and sellers—to the tune of P48 billion—while a mechanism would be drawn up to allow Pangilinan to sidestep difficult legal issues (he would end up with two television networks, post deal, if ever this happens).

But wait…. What’s this we hear that there is a second suitor for GMA7?

According to our source, one conglomerate that has taken “a close look” at the Gozon-Duavit-Jimenez family-controlled corporation is now back, wooing the owners and singing sweet songs that sound like billions of pesos.

“This group has always been interested in media, and even more so now,” said our source. (This conglomerate is also interested in a closer partnership with another television network, but that’s another story.)

And what’s this we hear? Is there a third suitor?

Indeed, word on the street is that there is another party which is interested in GMA7. This party—this tycoon—we we’re told, is particularly close to one of the controlling families of the network, possibly the same branch that has been stalling the network’s sale to MVP.

So, which of the three groups will emerge victorious?

“Ultimately, it will be a matter of price,” our source said.

But of course.  Daxim L. Lucas

Mighty rivalry

Shares of LT Group Inc. led by tycoon Lucio Tan recently sizzled (up by 15.02 percent last week from the previous week’s level) as the market prices in a potential improvement in the cigarette business under Philip Morris Fortune Tobacco Corp. (PMFTC), following an increase in the selling price by a key competitor.

This key rival is the controversial Mighty Corp., a Bulacan-based manufacturer of low-priced cigarettes, which has raised a lot of eyebrows for selling below its break-even price. It was earlier reported that the Department of Finance had checked whether there were unaccounted volumes for which taxes might not have been paid.

Mighty, for its part, has vehemently denied resorting to tax evasion.

Recently, however, Mighty announced a 24.5-percent increase in the prices of popular brands Mighty Filter Kings and Mighty Menthol, a move seen to bring prices closer to the products of PMFTC. Dealers said this meant that Mighty—whose pricing scheme has gnawed sharply at PMFTC and was a key concern of LTG—could lose some market share in favor of the latter. According to some, it may be that certain segments of Mighty’s consumers have acquired the taste for its products and are no longer mindful of the price increases.

Meanwhile, some stock pundits said it would also depend on PMFTC’s own forthcoming adjustments, given this year’s excise tax increase, once stockpiled inventories run out.  Doris C. Dumlao

Moving out

After the devastating earthquake in Cebu and Bohol, and amid talks of a “big one” due to hit Metro Manila soon (based on the historical frequency of the movement of the West Valley faultline, which is every 400 or 500 years), the Securities and Exchange Commission is finalizing plans to transfer to a new building by the middle of the year.

As earlier mentioned, its building in Ortigas has been identified as among those not strong enough to withstand a big earthquake.

Teresita Herbosa, Chair of the Securities and Exchange Commission, told BizBuzz that, thanks to Senators Chiz Escudero, Serge Osmeña and Teofisto “TG” Guingona III, the commission had acquired the money for rent, at least.

“Before June, we should have transferred already,” she said.

The SEC has formed a committee which is now looking at five locations in the metropolis, most of which are in Bonifacio Global City (where the SEC has been planning to build its future headquarters). There is a prospective location on Edsa, while another is in Makati City.

The most urgent move, Herbosa said, would be for the SEC to immediately vacate the higher floors of the old building at the corner of Edsa and Ortigas Avenue while the ground floor may still be used for some operations.  Doris C. Dumlao

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