Gaisano-led retailer Metro Retail Stores Group Inc. (MRSGI) has signed a joint-venture agreement with the province of Samar to develop a 22-hectare government property into a commercial complex.
Based on the agreement, MRSGI will develop, construct and operate a department store and supermarket with one movie theater, a convention center and a government center with business process outsourcing (BPO) space and a hotel complex in the provincial property located at Barangay 07, Poblacion, Catbalogan City.
The project is estimated to cost P472.9 million and is expected to be completed over a 30-year period, MRSGI disclosed to the Philippine Stock Exchange.
Within six months from turnover of the property, MRSGI committed to build a transport terminal. It also committed to complete the convention center as well as the government center with BPO space within eight months from turnover.
MRSGI has promised to complete the department store and supermarket with movie theater and leasable space that is expandable to a community mall within 18 to 24 months from turnover of the property. A hotel is also proposed to be built during this timeframe.
“The joint venture will generate additional revenues to MRSGI and increase the existing GFA (gross floor area) footprint of its stores,” the disclosure said.
To fulfill the project, Samar province is bound to contribute to the joint venture a 22,000-square-meter property on which these facilities will be constructed and established.
The parties have agreed to share in the monthly gross revenues and gross rent, without value-added tax, from the operation of the department store and supermarket with one movie theater and with leasable space, the disclosure said.
“All revenues to be derived from the operation of the convention center, government center with BPO Center and terminal will belong to the province. The possession and ownership of the convention center, government center with BPO Center and terminal will be turned over to the province after completion of construction,” the disclosure said.
On the hospitality component of the estate, MRSGI will get a 20-percent share from the hotel operator’s lease rental payments, while the province will get 80 percent.
After the 30-year period, MRSGI is obliged to turn over to the province the possession and ownership of the department store and supermarket, movie theater and leasable spaces.
When it listed on the stock exchange in 2015, MRSGI’s goal was to double in five years its net selling space from 197,873 sqm then. The company is seen on track with this “aggressive but deliberate” expansion plan. —DORIS DUMLAO-ABADILLA