Property developer Ortigas & Co. Ltd. may tap the stock market to fund expansion plans in the future but it has ruled out doing so using the backdoor route.
Refuting recurring speculations that it will use its publicly listed subsidiary, Concrete Aggregates Corp. (CAC), as backdoor-listing vehicle, Ortigas president and CAC chair Jaime Ysmael said in an interview that if and when the company would decide to go back, it would rather use the front door.
“We don’t really need a backdoor. We have a track record so why do we have to use CAC? It will just be more difficult because of the tax complications,” Ysmael said.
Ortigas, which has been in the property business for the last 88 years, now counts the country’s largest business groups SM and Ayala as its controlling shareholders.
“Doing an IPO (initial public offering) or doing an REIT (real estate investment trust). It’s all within the realm of possibilities depending on our future plans. But right now, we’re funding everything through internally generated cash and so far we’ve been able to manage using our existing balance sheet,” he said.
But going public is an option that’s available in the future, he said.
A long time ago, the Ortigas clan acquired from the Augustinian friars 4,033 hectares of land spanning what we now know as the four cities of Pasig, San Juan, Mandaluyong and Quezon City. As such, Ysmael said the Ortigas could rightfully claim having been part of the development of Metro Manila.
To date, Ortigas is still left with significant real estate within Ortigas and its fringe areas, as well as over 300 hectares of landbank outside but close to the metropolis, Ysmael said.
The crown jewel—and the primary reason why it has attracted the country’s two largest property groups—is the 16-hectare Greenhills complex, which is now undergoing a major redevelopment to unlock values. The company is also developing the 10-hectare Capitol Commons, the 16-ha Frontera Verde (Tiendesitas) and the 10-ha residential-retail complex Circulo Verde.
Ortigas is also uniquely positioned in the way that it holds reversion rights to parts of Camp Crame. Thus, it has exclusive rights if and when the government decides to redevelop or re-privatize these parcels of land.
Reversion rights at the military camp give it a contingent land bank of 35 hectares, but aside from these, many of the private schools in its former estate—La Salle Greenhills, Lourdes and Poveda—have either reversion rights or deeds of restriction favoring the company.