MANILA, Philippines — The University of the Philippines is unlocking much more value from its Technohub development deal with property giant Ayala Land Inc. than what some parties suggest.
ALI clarified on Monday that under its development lease agreement with UP for the Technohub property, the premier state university would receive P171 per square meter on a monthly basis. This was much higher than the reported P22-per square meter monthly yield over a 25-year timeframe as suggested by some online report picked up by Presidential spokesperson and chief legal counsel Salvador Panelo.
ALI explained that the P171 per square meter rental rate was derived from P10.23 billion worth of combined lease payments and investment value on the estate.
Specifically, ALI was bound to pay a sum of P4.23 billion in lease payments and pour in P6 billion worth of investment in 16 commercial buildings for a total amount of P10.23 billion over the life of the 25-year contract.
Of total lease payments, P1.1 billion was estimated to have come in from 2008 to 2018 while P3.13 billion would come from 2019 to 2033.
“After 2033, UP as owner will receive 100 percent of the buildings’ rent. UP also continues to own the land which has appreciated in value since the start of the partnership,” ALI said.
ALI entered into a lease agreement with UP for Technohub in 2006. This was after two failed bids and an invitation for a negotiated proposal to nine real estate developers.
“Only ALI submitted a proposal and committed to meet the very specific parameters set out by UP – a campus-type development with a minimum of 10, three to four- story buildings catering to IT companies,” ALI said.
Since the start of operations in 2008, the ALI-UP partnership has created 50,000 jobs in the development, the property giant said.
ALI clarified further that only 20 hectares of the 37-hectare property were available for commercial development given that the remaining four hectares remained with UP while 13 hectares were allocated for open space.
“We believe this development has been fruitful and beneficial for UP, ALI and the community,” ALI said. “We welcome a transparent review and assessment of our partnership with UP.”
One year before UP and Ayala signed the Technohub deal, the administration of then-President Gloria Macapagal-Arroyo had declared that the government was in a fiscal crisis.
/atm