Biz Buzz: Trident consortium members part ways

As the dust clears, it is becoming apparent that the Laguna Lakeshore Expressway Dike, a public private partnership (PPP) project with the potential to help millions of Filipinos affected by flooding, is not going to happen under this administration.

As investors move on, so too will the unprecedented consortium formed by some of the country’s biggest property developers in the Philippines to undertake the massive PPP deal.

Of course, we’re talking about the parting of ways at Team Trident, whose name in no way suggests it has four very large members. These are Ayala Land Inc., SM Prime Holdings Inc., Megaworld Corp. and Aboitiz Equity Ventures Inc.

Team Trident,  San Miguel Corp. and the Alloy Pavi Hanshin LLEDP Consortium did not submit any bid for the dike project this week, citing unresolved issues and its lack of viability.

Team Trident’s members represent a major slice of the country’s property business, not to mention about P1.6 trillion worth of market capitalization on the Philippine Stock Exchange.

It would have been a high-powered boardroom meeting four times over when Team Trident got together for meetings. One insider said the four-way partnership, while “not always perfect,” was a cordial affair up to the very end.

Apparently, Trident made the decision not to participate a week before March 28.

Moreover, all decisions were always made through a consensus—several times this was unanimous—and there was great respect for each member’s strengths.

Can such an alliance ever be resurrected?

If anything, the partnership proves that four giants can work together toward a common objective, more so if that goal is lucrative enough. Miguel Camus

‘Inhibition king’

IF YOU think the fight between businessmen Reghis Romero II and his son Michael (better known in social circles as “Mikee”) is over, think again. Apparently, the father-versus-son battle for control of Harbour Centre Port Terminal Inc. was just lying dormant out of the harsh limelight, but had never really gone away.

After Biz Buzz published the side of the younger Romero recently—basically saying he could do anything with the company as he pleases, including entering into business partnerships with other investors—it was the turn of the father’s camp to air its side. And it is this: That Michael cannot enter into business deals with other parties on behalf of Harbour Centre simply because he has no right to do so.

“As a matter of fact, there is a standing valid and effective writ of preliminary injunction issued by the Court of Appeals against Michael Romero enjoining him from representing Harbour Centre in any capacity, including entering, and taking control, management and possession of Harbour Centre,” said the lawyers of the father, Reghis.

More importantly, they pointed out that Reghis was not notified of any board meeting where the authorized capital stock of another Romero firm, Manila North Harbour Port Inc., was supposedly increased, resulting in what would be a dilution of the father’s stake in it.

“Michael Romero is not the controlling stakeholder of Harbour Centre,” the father’s lawyers stressed.

So what’s in store for this tit-for-tat saga of corporate control? Most likely, more legal action ahead.

This early, Reghis’ lawyers are already bracing for more moves by Michael to have more court judges recuse themselves (allegedly because of biases and conflicts of interest) from hearing the various cases in various courts.  The running total of motions for inhibition the younger Romero has filed is now 19, and more are expected, earning him the monicker “Inhibition King” in his father’s camp.

Stay tuned for further developments, folks. Daxim L. Lucas

New BGC benchmark

TWO years ago, people raised eyebrows at how much property investors paid for two parcels of land in Bonifacio Global City (BGC). In one of those public auctions held by the state-owned pension fund Government Service Insurance System, the Focus Palantir group paid a record-high valuation of close to P500,000 a square meter for a 1,600-square-meter lot.

But that’s all history, folks. A new land price milestone in BGC was just set two weeks ago. A property deal was closed at around P50,000 “accommodation” value a square meter of gross floor area (GFA). If the floor area ratio (FAR) were at par with the FAR 12 used for the Focus Palantir deal, then the latest land deal will translate to about P600,000 a sqm.

FAR, which is used by local governments in zoning codes, refers to the total square feet of a building divided by the total square feet of the lot the building is located on. Higher FARs tend to indicate more urban (dense) construction but in some areas, local governments impose high restrictions.

The property deal was sealed in a negotiated sale brokered by real estate veteran David Leechiu, who has set up his own property consulting firm called Leechiu Property Consultants after leaving Jones Lang Lasalle group. “What used to scandalize people at P500,000 a square meter has now gone up by 20 percent,” said Leechiu, who said he was not at liberty to disclose the buyer or even the seller. On this valuable land the buyer plans to put up a new office property tower, which is slated for completion by 2018, optimistic that the Philippine office property segment is still in a sweet spot.

Why was such record pricing achieved? Leechiu explained: “This is the only property for sale in the market. No other properties are for sale right now and there are too many buyers.” Doris Dumlao-Abadilla

A ‘more accurate’ survey

PARTIES associated with the most recent Pulse Asia survey, which exhibited a narrower margin of error than their previous survey, got in touch with Biz Buzz to explain exactly why it was so.

“Please note that the margins of error decreased because the sample size or number of respondents increased,” said one person familiar with the inner workings of the survey.

“It’s a tight race so surveys with a lower margin of error and a larger sampling size that accurately reflect the choices of the voting public will be needed,” he said.

The first survey had a sample size of 2,600 registered voters 18 years old and above, with biometrics, yielding a margin of error of plus or minus 1.9 percent. The second survey had a sample size of 4,000 voters and a corresponding margin of error of 1.5 percent.

In other words, the most recent survey was simply more accurate than the first, the source said. Daxim L. Lucas

Single malt demand up

DEMAND for old and rare single malts is rising around the world, but there is just not enough supply to slake the thirst of whisky lovers, thus driving prices up. This presents a great opportunity for tycoon Andrew Tan to squeeze even more dividends from his company’s investment in the Whyte & Mackay liquor group, which owns the Dalmore whisky brand.

Tan’s group acquired Whyte & Mackay last year for P31 billion and the company still has stock of 18-year-old whisky that will soon command a hefty price. “Yes, we still have stock at the moment. But it is limited. This is something that we cannot produce easily, just like that,” says Tan.

Dalmore is one of the few brands that still have in stock single malts at least 18 years old. This means that Dalmore prices will go up soon with the expected depletion of the global inventory of single malt down the road. Demand for aged single malt whisky has gone up in recent years due to the shift in consumer preference from regular blended scotch.

If reports are to be believed, the shortage and the price escalation could last for at least the next 10 years. So stock up and drink up while you still can. Tina Arceo-Dumlao

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