PLDT wants to move out of Makati CBD, sell property
Philippine Long Distance Telephone Co. (PLDT) is renewing a plan to redevelop and eventually sell certain land assets, including its Makati City-based headquarters, as tall office towers have become passé for the telco as it transitions into the digital age, PLDT chair Manuel V. Pangilinan said.
PLDT is, instead, moving forward with the relocation of its headquarters to a sprawling compound with a “campus-style” building in either north or south of Metro Manila, Pangilinan told reporters on Tuesday.
The company’s headquarters are located in the Ramon Cojuangco Building at the corner of Ayala Avenue and Makati Avenue in Makati’s financial district. In the same complex is the MGO building, which houses other companies affiliated with PLDT.
Pangilinan said the buildings occupied almost one hectare of prime real estate.
“In the digital age, you really need to have a flat organization, a flat environment,” he said, referring to many of the office structures of Silicon Valley’s most successful technology companies.
“If you are a tower, the floors simply attenuate your ability to communicate with each other,” he said. “A flat horizontal structure, not dissimilar to Facebook’s headquarters, just forces conversation to happen. Communication, collaboration—everything is open.”
PLDT said in a stock exchange filing on Tuesday that its board had approved the plan, which would be done either by itself or with partner property companies.
Specifically, this will involve the redevelopment of land and air rights to “maximize” their value.
It may also invest funds either in shares of stock of an asset holding company that will enter into a joint venture with a developer and other potential co-investors or a joint venture with the developer, for purposes of the redevelopment, the filing showed.
PLDT said the move still requires shareholders’ approval. Pangilinan said there were no talks with any property developer at this point.
This is not the first time PLDT said it was leaving its Makati City office. It made a similar announcement three years ago.
At the time, the company said it would raise P5 billion from the sale of its idle property as it was looking to acquire the 34-story Alphaland Tower for its new headquarters. That transaction did not push through since the asking price was too high.
Pangilinan declined to say how much PLDT’s property assets were worth, but the figure was likely higher given increasing land valuation in the country’s prime business districts.
The plan is in line with the company’s broader move to “reset” its strategy as earnings continue to decline given the changing telco landscape.
Pangilinan said earlier the company’s transition could last three years. PLDT earlier reported that core profit last year sank 6 percent to P35.2 billion. Its core profit this year is projected to drop further to P28 billion, he said.