PRIME Orion Philippines Inc. (POPI) plans to redevelop Tutuban Center, its popular bazaar hub in Divisoria, and more than double retail space under the auspices of new strategic investor Ayala Land Inc. (ALI).
Shareholders of POPI approved yesterday the entry of ALI as the new majority investor in the company alongside an increase in authorized capital to P7.5 billion from P2.4 billion.
ALI is buying 2.5 billion in new shares to be issued by POPI out of the increase in authorized capital stock for P2.25 per share, giving it 51 percent control of the company.
POPI chair Felipe Yap told reporters that the fresh capital infusion from ALI would be enough to fund the company’s redevelopment of Tutuban Center.
To date, POPI is earning about P400 million annually in rental income from Tutuban Center, which has about 60,000 square meters in gross leasable area (GLA), offering various concepts from wholesale and bargain stalls, to regular retail and food outlets. The GLA is expected to more than double, in turn resulting in an increase in leasing income, as POPI has so far built only on a eight-hectare portion out of the 20-hectare total landbank.
Last March, the Philippine National Railways (PNR) turned over to POPI’s indirect subsidiary Tutuban Properties Inc. (TPI) about three hectares of leased property along Tayuman and, in June, the PNR also turned over about 5.8 hectares along Dagupan. With the turnover of additional land and air rights, TPI now has control of more than 17 hectares of the 20-hectare PNR property which is vital to the redevelopment of Tutuban Center and its integration with the North South Railway Project of the Department of Transportation and Communications (DOTC) and PNR.
Yap said it’s possible that aside from retail space, ALI may introduce other property formats in the estate.
“It depends on Ayala’s concept but we know that we will put in the best we can do to enhance the value of the company and shareholders without violating the law,” Yap said.
ALI is expected to put in the additional capital into POPI as soon as the increase in capital has been approved by the Securities and Exchange Commission.
Aside from the Divisoria property, POPI has a beachfront property in San Vicente, Palawan. POPI likewise has a 10-percent stake in Cyber Bay Corp.
Formerly known as Guoco Holdings (Philippines) Inc., POPI has interests in real estate and property development, non-life insurance and other allied services. Shares of POPI rose by 2.96 percent on Tuesday to close at P1.97 per share, giving it a market capitalization of P4.8 billion.