Property giant Ayala Land Inc. has signed a deal to buy a 51.36-percent stake in publicly listed holding firm Prime Orion Philippines Inc. (Popi)—owner and developer of Divisoria’s popular bazaar hub Tutuban Center—for P5.6 billion.
In a disclosure to the Philippine Stock Exchange Friday, both ALI and Popi announced a deal for ALI to acquire 2.5 billion Popi shares subject to certain terms and conditions. The deal signified ALI’s entry into smaller and more mass-based retail center formats.
The new shares to be acquired by ALI will come from Popi’s increase in authorized capital stock.
Through its subsidiary Tutuban Properties Inc., Popi owns Tutuban Center, a retail complex with a gross leasable area of about 60,000 square meters, offering various concepts from wholesale and bargain stalls to regular retail and food outlets.
“This acquisition is aligned with ALI’s thrust of expanding its leasing business,” ALI said in its disclosure.
In a text message, ALI president Bernard Vincent Dy said the “focus for now will continue to be the Tutuban parcel.”
With the deal, Popi said it would be able to benefit from the expertise and resources of ALI and optimize the development of its property assets, especially Tutuban Center.
Tutuban Center, which sits on a 20-hectare property, will be the location of the North-South railway project transfer station, which will interconnect with the LRT 2 west station. Tutuban Properties signed last April a memorandum of understanding with the Department of Transportation and Communications (DOTC) and the Philippine National Railways (PNR) on the railway project.
“The landbank’s location doesn’t seem to be in the usual market of ALI despite Tutuban being the real example of the Filipino consumer. This area is quite depressed so you can’t expect an East or West gallery (upscale apartments)-like project here,” said Jose Mari Lacson, head of research at local stock brokerage Campos Lanuza & Co.
“So we can speculate that this forms part of a broader strategy involving PNR and the railway system. Remember ALI has major projects landbank in both the north and south that can be enhanced of we have an efficient railway system linking north and south Luzon,” Lacson said.
Formerly known as Guoco Holdings (Philippines) Inc., Popi has interests in real estate and property development, nonlife insurance and other allied services, organized under several intermediate holding companies.
Popi has total assets of P4.5 billion as of end-March this year while market capitalization stood at around P5.5 billion.