SM bags seafront property for P18B

The SM group has sealed a deal to buy a seafront property situated between its sprawling Mall of Asia shopping complex and the Solaire Resort and Casino from UK-based investment fund Ashmore and its local partner Eric Recto.

The transaction—worth at least P18 billion, or P180,000 per square meter for the 10-hectare prime parcel of reclaimed land —will give the real estate giant additional space on which to build residential condominium towers under the SMDC brand.

Speaking on condition of anonymity, an official involved in what is one of the biggest property deals in recent years said SM needed the property to “replenish its stock of condominiums” in the Manila Bay area due to the strong demand that has seen its current projects being taken up “almost 100 percent.”

“The demand for residential units in this area is so strong, including from Chinese buyers who have business interests in the country,” the official said.

The deal also marks the formal end of Ashmore’s involvement in the country in the private equity space, which started with a partnership with businessman Roberto Ongpin a decade ago and ended up in a divorce that saw both parties carving up a multibillion-peso business empire to settle the dispute.

Another source said the Ayala group, which is also building a mixed-use development on an adjacent property in partnership with the Wenceslao family who owns the land, first approached the Ashmore-Recto group in a bid to buy the property to expand their commercial project’s footprint.

A successful bid for the property would have given the Ayala-Wenceslao development a “commercially attractive” direct access to Manila Bay, the source said.

“But we understand their bid was a little conservative, and they refused to go higher,” said another official, who said the Ayala group’s offer price stood at “about half” of what the SM retail conglomerate eventually bought the property for.

“When the [SM] owners say ‘go,’ they really mean go,” the official said, explaining the aggressive acquisition price.

The property was formerly under a joint-venture agreement between Ongpin’s Alphaland Corp. and the Wenceslao family and was originally slated to become an exclusive yacht club called “Alphaland Marina Club.”

An ensuing dispute between Ongpin and the Wenceslaos resulted in the former partners dividing the property, with the former ending up owning the seafront portion.