City in ‘most critical stage’ of South Road Properties lot talks
Sun.Star
Tuesday, December 04, 2007
NEGOTIATIONS for the sale of three lots at the South Road Properties (SRP) have reached its “most critical” stage, but Cebu City Mayor Tomas Osmeña remains tight-lipped about it.
Osmeña said they are now discussing the price of the lots with three big investors and he is optimistic they will be able to finalize the sale before the year ends.
If all goes well, the City may even close the three deals at the same time, he said.
“We’re getting into the stage of pricing the lots that is why it’s very sensitive. It’s supposed to be done this year. I’d rather not say anything about it because it can create a misunderstanding. This is a very critical point,” he told reporters yesterday.
The mayor assured Cebuanos, though, that he will give the details of the sale once everything is finalized.
Request
In a news conference, he said he gave in to requests of the investors not to divulge their names and details of the transaction at this point so as not to jeopardize what would be the City’s first sale at the multi-billion peso SRP.
The investors, considered as the biggest names in the commercial development business, will put up mix-use development projects that will have commercial, residential and tourism components.
“The customer is always right so if a little confidentiality is what they’re asking for, then we’ll give them consideration... We can’t survive without customers.
But I assure the public we will be more transparent once it is finalized,” said the mayor.
Price range
Joel Mari Yu, director of the Cebu Investments Promotion Center (CIPC), the marketing arm of the SRP, said they are currently at the height of negotiations on the maximum floor price for lots within the 290-hectare facility.
At this point, he said, the price being discussed ranges from P10,000 to P15,000 per square meter.
Like the mayor, he is hopeful they can finalize the sale before the year ends but if it does not happen in the next three weeks the City will surely make a sale by the first quarter next year.
What has been agreed on with the buyer so far are the amount of space each investor will buy, their business proposal and the timetable of the project implementation.
“The City has agreed on all three, on the size of the lot, what they want to do in the area and when they will start and finish. Once the floor price is established as valid, we will bid it out and the price can go higher than P15,000 depending on the winning bid,” he told Sun.Star Cebu.
On the negotiation table, Yu said they will be pricing the SRP lots according to zones and three maximum floor price, with the Pond F area getting the highest price tag.
The Pond F is on the waterfront where an artificial white sand beach, swimming pool and a boardwalk are being constructed.
Pond F will command the highest price followed by properties fronting the South Coastal Road and the Mambaling access road. All other areas of the SRP will be ranked third in the pricing.
“So the price will really depend on what area you are bidding on. Even if it’s a prime space but it’s outside Pond F, it will not command the same price as Pond F,” Yu explained.
Last week, Osmeña said the sale will be of a magnitude that will relieve the City of its loan obligations on the SRP.
The first sale will also allow the City to provide new social services by next year, including cash gifts for all senior citizens in the city, which the City will give on their birthdays and on Christmas.
Twelve years after the City made the 12.292-billion yen loan (P5.958 billion as of August 2006) to fund the SRP, it has only earned P25 million from the project, which represents Bigfoot Global Solutions Inc.’s 25-year lease payment for a two- hectare lot. (LCR)