After ending their squabble over the Ortigas landbank, the SM and Ayala groups have buckled down to collaborate on another multibillion-peso real estate project: The 26-hectare reclaimed land in the eastern coast of Cebu City called the South Road Properties (SRP) that the duo recently won in a public auction.
Top officials from Ayala Land Inc. and SM Prime Holdings told reporters at the sidelines of the Philippine Property Awards 2015 on Thursday night that they decided to work together on this big project to hasten the development of this area, which the Cebu City government was grooming to be a new central business district.
“We joined forces to take advantage of the location,” ALI chief finance officer Jaime Ysmael said.
“We decided to collaborate rather than doing it on our own because we wanted to make sure that the area will be developed faster,” SM Prime chief finance officer Jeffrey Lim said in a separate interview. “In a way, we also managed the capital expenditures.”
A consortium led by ALI and SM Prime won the new landbank at SRP (lot number 8-B-1) with a winning bid of P10 billion.
The economic interest was almost equally split between the two groups, Ysmael said. But it was not really a joint venture in the true sense of the word. After pooling resources to win the bidding, the next move is to carve out the areas to be respectively developed by the two property groups.
The master plan is still being developed. “It will have to be [finalized] soon. We intend to develop the property right away,” Ysmael said.
Lim said the joint master plan would hopefully be finished in the next few weeks.
SM Prime, for its part, has an existing 30-hectare landbank in SRP that it is already developing. The new landbank expands its presence in the SRP.
Any new retail development in the new landbank, Lim said, would likely be strip-type rather than the big malls.
For ALI, Ysmael said its real joint venture partner in the SRP project was affiliate Cebu Holdings Inc. (CHI), developer of two of Cebu’s prime business and lifestyle districts—the Cebu Business Park and the Cebu I.T. Park. Its master-planned estates are key locations for traditional office, business process outsourcing (BPO) office and shopping center leasing.
Cebu City is also drawing up a master plan that seeks to interconnect all the plans of investors participating in the development of SRP.
Another big investor in SRP, the Filinvest group led by the Gotianun family, also acquired an additional landbank in this area. Filinvest Land Inc. won the bidding for a separate 19.2-hectare lot in SRP for P6.76 billion.
FLI said the property would be developed and owned by FLI together with its wholly owned subsidiary Cyberzone Properties Inc., affiliate Filinvest Alabang Inc. and other strategic partners or investors. FLI’s new development is seen to complement its ongoing P25-billion “City di Mare” project in SRP.