Ayala Land Inc. (ALI) is bound to pay a total of more than P10 billion for the lease of land owned by the University of the Philippines (UP) and is paying P171 per square meter per month under its current deal, not P22 as claimed by a pro-Duterte blogger and cited by a ranking Palace official who read the blog.
UP is unlocking much more value from its Technohub development deal with ALI than what had been suggested in a banner story in Philippine Daily Inquirer quoting statements made by presidential spokesperson Salvador Panelo who quoted a blog by the pro-Duterte Thinking Pinoy.
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 per month.
This was much higher than the reported P22-per square meter monthly rate over a 25-year timeframe suggested by Panelo, who got his figures from a blogger.
In a press statement on Monday, ALI explained that the P171 per sqm rental rate was derived from P10.23 billion worth of combined lease payments and investment value it poured into the property.
ALI was bound to pay at least P4.23 billion in lease payments to UP and pour in P6 billion in investments on 16 commercial buildings, which meant shelling out a total amount of P10.23 billion over 25 years, the life span of the 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,” ALI said in its statement.
“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- storey 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 because 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.”
Edited by TSB