With little fanfare, one of the last two vacant lots along Ayala Avenue in Makati City has, in recent months, quietly hosted construction activities for the next gleaming skyscraper along the street that hosts the country’s most expensive business addresses.
We’re talking about what used to be a vacant lot between Rufino Tower and the 6788 building which hosts the Philippine office of Standard Chartered Bank.
Presently under construction on that site is a 28-story building called the NEX Tower. Now, before you scoff at its seemingly relative low height, note that this building will be taller than 6788 on its left, but slightly shorter than Rufino Tower on its right.
Once completed by the fourth quarter of 2018, NEX Tower will have 31,173 square meters of gross leasable space with a typical floor plate of 1,400 square meters. With the demand for office space from the business process outsourcing industry plateauing (as many have their own purpose-built buildings nowadays), what industry could possibly pick up the slack and maintain the demand for A-1 grade Makati office space?
Here’s where it gets interesting. Biz Buzz learned that NEX Tower is being eyed as a base of operations for many firms in one of the country’s “up and coming” industries. We’re talking about a subset of the gaming industry known as offshore (and online) gaming.
That’s right. We understand that as much as 50 percent of the building’s leasable floor area will most likely be taken up by offshore gaming firms, which operate virtual casinos locally for players overseas. We say virtual because they’re not really casinos in the conventional sense of the word, since most involve having a table dealer — usually an attractive lady dressed equally in an eye-catching manner — dealing cards in front of cameras which then project the images to bettors overseas. Believe us when we say that the setup is more elaborate than it sounds and involves a substantial investment in space and equipment.
Anyway, with that market in the bag, NEX Tower will have no problem filling up its 28 floors.
But now, for the most important detail: Whose project is it?
Biz Buzz learned that the project — which involves an avant garde architecture akin to those of buildings designed by Toshiko Mori — is being built by a relatively unknown firm called Nex Development Group. And behind it is businessman Ricardo “Richie” Cuerva. He’s the man who’s in charge of building all the vertical developments of the Century Properties Group under Jose Antonio (but we understand he’s doing this on his own).
Incidentally, the last vacant lot along Ayala is situated just a few meters away, on the other side of 6788, and right next to the unfinished Jaka Tower that has since been acquired by Ayala Land Inc.
Of course, industry observers are keenly awaiting the plans for that vacant property and, once development works start, will mark the first time that Ayala Avenue properties will be fully occupied on either side of the pricey road that is still considered the center of Philippine business.
In any case, expect the landscape of Ayala Avenue to look different — and better — once NEX Tower is completed next year. —Daxim L. Lucas
Middle East routes lose luster
The Middle East, a long-running employment magnet for Filipino professionals of all stripes, has lost some of its luster—at least as far as domestic carriers are concerned.
Following a combination of depressed oil prices and the rapid buildup of capacity by aggressive Gulf carriers, some routes between Manila and the Middle East have simply turned too unprofitable to sustain.
This week alone, Philippine Airlines said it would suspend Abu Dhabi flights in July while Cebu Pacific Air announced a deeper cut: it would suspend Doha, Riyadh and Kuwait through July (it will still keep Dubai).
PAL president Jaime Bautista singled out the region for its seat oversupply concerns. But PAL, he said, would continue to maintain its other routes there and may even benefit in areas such as those left behind by Cebu Pacific.
But the larger rivals are the massive Gulf carriers, state-owned entities that have executed an aggressive if not brilliant plan to channel global traffic through their strategically located desert hubs.
Bautista noted that up to 70 percent of flyers taking these Middle Eastern carriers were in fact heading beyond those airport hubs, utilizing so-called fifth freedom rights.
PAL’s big challenge is to simply offer better value and services, including newer, more fuel-efficient planes such as the Airbus A350s arriving next year. It’s not always easy, Bautista admitted.
“Filipinos, as much as possible, would like to take Philippine Airlines. They want the food and the service. But sometimes, because of fares, they make the decision to fly using other carriers,” he said.
“We will compete with them [Gulf carriers] through better products and services. This is what we are working on now,” he said. —Miguel R. Camus
Financing firms banking on BSP
Exactly a month ago, Biz Buzz took up the issue about Philippine National Police pensioners who are allegedly being lured by non-stock savings and loan associations (NSSLAs) to avail of “double loans” — new loans given to retirees — using pensions that are already tied-in to existing debt obligations.
Logically, of course, one pension cannot be used to secure two or more loans. As if that weren’t bad enough, the borrowers also get the shock of their lives when they discover that deductions of up to P200,000 are made on their new loans. Given that many of those victimized are from the Visayas and Mindanao, these deductions are supposedly for “travel expenses”, “board and lodging”, “commissions” and “processing fee” for unnamed officials.
Because of mounting concerns about this unscrupulous practice, a group of financing firms reiterated their request to the Bangko Sentral ng Pilipinas (BSP) to put an end to this system. They called on newly named BSP Governor Nestor Espenilla Jr. to issue a cease-and-desist order against the NSSLAs, and thus protect more retired servicemen from a cycle of crushing debt.
Even before he was named BSP head, Espenilla was already aware of this matter and had, in fact, referred it to the supervising department for immediate action. That was almost three months ago, but investigations of this nature apparently take time.
In a matter of weeks, however, this issue may finally be freed from limbo. Under the New Central Bank Act (R.A. 7653), the BSP Governor is directly empowered to enforce and implement laws pertaining to institutions supervised by the Bangko Sentral, as well as regulations, policies or instructions issued by the Monetary Board. By July, therefore – when Espenilla officially takes over the office – the no-nonsense bank regulator can finally apply the brakes and review the operations of these NSSLAs.
In the meantime, many are hoping that it does not take that long. —Daxim L. Lucas
New ANZ PH head
ANZ has announced the appointment of Anna Green as Philippines CEO, reporting to David Green, CEO of Singapore and head of South East Asia, India and Middle East markets. Ms. Green, who joined ANZ in 2004, is currently CEO for ANZ Laos. Prior to this, she held senior risk and regulatory roles with ANZ across the region and also practiced international banking and finance laws in Sydney and London.
“We have a strong franchise in the Philippines where local corporate and financial institutions are increasingly looking for business opportunities across ANZ’s network in Australia, New Zealand and Asia,” her boss Mr. Green said.
“Anna’s country leadership experience and strong connections across the Asean region make her the ideal candidate to lead the team here,” he added. “Her skills and experience will be extremely valuable in driving our business in the Philippines.”
Subject to regulatory approval — which means assuming the BSP gives her the green light (as they do a pro forma review of all CEO appointments) — Ms. Green will commence her new role on Aug. 1, 2017. —Daxim L. Lucas