City targets two more South Road Properties deals before December

Saturday, October 4, 2008

Cebu City Mayor Tomas Osmeña is optimistic that the city government can close substantial deals with two more investors within the year for the South Road Properties.

While he refused to name these investors, the mayor claimed they are among the top ten largest real estate developers in the country.

“Aside from Filinvest, I am expecting to make two more deals within the year. But as to when are we going to be paid, I don’t know. You know the government’s bureaucratic red tape,” Osmeña said in a news conference yesterday.

Osmeña’s statement was confirmed by Joel Mari Yu, managing director of Cebu Investment and Promotion Center, the SRP’s marketing arm.

Yu said one investor proposed to develop a medical-tourism business while the other plans to develop an entertainment center, a shopping mall, condominiums, and an information technology center.

“Yes, that’s true. But as of now, I am not at the liberty to divulge the names of these companies. It is for the mayor to say it,” Yu said in a separate interview with The FREEMAN.

Osmeña earlier explained that as much as he wanted to be transparent about the negotiations on the sale of the SRP, he could not reveal the details because it might create a misunderstanding because the investors had asked him not to talk about it.

Recently, the Filinvest Land Inc., one of the largest real estate companies in the Philippines, submitted its proposal to the city for the “outright purchase” of 10-hectare lot worth P2 billion and another joint venture agreement of the remaining 40 hectare of lot which will house high-rise buildings and condominiums. The offer got a positive response from the mayor and the city officials.

Osmeña said that as of now, no investor has tried to compete with FLI’s offer.

Aside from the two other prospective investors that the city hopes to close deal with within this year, he said the city has also received offers from other buyers who eye different portions of the 295-hectare property. — Mitchelle L. Palaubsanon/WAB

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Filinvest may collect cost refund fees: Tomas (South Road Properties)

Saturday, October 04, 2008


CEBU City Mayor Tomas Osmeña will allow Filinvest Land Inc. (FLI) to collect a minimal project development cost refund if the contract for its unsolicited proposal is awarded to another developer.

But Osmeña is almost sure there will be no need for a project development cost refund because FLI is bent on matching any higher offer by a challenger when their proposal goes through a bidding, specifically the Swiss challenge.

Osmeña expects to close a deal within the year, but is non-committal on when the City will be paid, since this depends on bureaucratic procedures, he said.


In the bidding, the City Government’s 10-percent share in the joint venture (JV) is expected to be the most contentious provision of the proposal.

Other developers will have a chance to compete with FLI’s offer and propose to give the City a bigger share in the JV, which the developer can match.

As of yesterday, the City has not received any feelers from developers of their intent to join the bidding.

Development

“If there is any refund to be collected from the winning bidder, it will be very minimal. It will not be hundreds of millions. It’s only fair because if you accept the designs of a proposed development, I think there should be some compensation to the proponent,” he told reporters yesterday.

“It will be nothing if you compare it to the P80 billion they will be investing... If you want me to make a wild guess, it will be less than P5 million... but Filinvest is intent on matching any better challenge,” he said, when asked what amount will be acceptable.

In 2006, Osmeña opposed the Ayala consortium’s unsolicited proposal on the Carmen Bulk Water Supply because of the project development cost refund provision in the terms of reference for the Swiss challenge.

He had said that the project development cost refund cannot be justified in an unsolicited proposal because “they were not asked to make the proposal.”

In his news conference yesterday, Osmeña said he is expecting to close one or two more transactions before the year ends.

“We expect closing two additional transactions aside from Filinvest within the year. When we say within the year, it means we will make a deal, but when we will get paid depends on the bureaucratic red tape,” he said.

Developers who want to challenge FLI’s offer will be pre-qualified to make sure that only real estate developers of the same stature as FLI can challenge the proposal.

FLI has formally presented its offer to buy a 10-hectare portion of the SRP amounting to P2 billion, and develop 40 hectares under a JV agreement with the City.

The real estate giant offered the City a 10-percent share of their annual gross sales if the JV pushes through.

“The share of the City is essentially the point of the bidding. We’re also going to be looking at the track record of the bidders, and they must be able to demonstrate that they are capable of engaging in this project,” the mayor said.

If their pre-qualification standards will be followed, Osmeña said there will only be around 10 developers in the country that can participate in the bidding. (LCR)

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Cebu seeks ADB grant for new projects (South Road Properties)

CEBU — The Cebu City government is planning to implement at least two projects as soon as it starts generating additional revenues from the sale and development of the South Road Properties, a 300-hectare reclaimed area that is envisioned to be a mixed-use complex.

One of the projects is the proposed 5.6-kilometer highway that will connect the reclaimed area to the villages of Pardo and Toong, where a proposed "urban poor city" is being planned.

City administrator Francisco Fernandez said the city government might be able to secure a grant from the Asian Development Bank, whose representatives visited the proposed site last Friday. The ADB is looking at providing a grant for the opening of the road from the South Road Properties to the proposed housing site.

Filinvest Land, Inc. formally submitted last week its unsolicited proposal to purchase a 13-hectare lot for about P2 billion and develop a 35-hectare lot in a joint venture with the city government.

The South Road Properties is a 300-hectare development that was reclaimed by the Cebu City government using a 12-billion-yen grant from the Japan Bank of International Cooperation. — GRMT
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which is which? 10 hectares for 2 billion and 40 hectares for joint venture with the city OR 13 hectares for 2 billion and 35 hectares for joint venture?

by the way, this article is from businessworld..

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Tom opposes South Road Properties authority

Wednesday, October 1, 2008

Cebu City Mayor Tomas Osmeña said yesterday that will not allow the creation of an authority to manage the multi-billion South Road Properties.

“It can become a monster. SRP is owned by the city, it should be controlled by the city. Even if I will be chosen to head that authority, no way. It should never be,” he said in a press conference yesterday.

Osmeña said that he is now asking the people of Cebu to support his plan in making SRP a big plus for Cebu.

“SRP is not going back to the sea. Since it’s already there, we have to maximize what we have. Profit is not the main consideration but economic development. No matter what, SRP is always a big plus for Cebu,” the mayor said.

The mayor even said if a prestigious organization like the United Nations or the Japanese Embassy would like to put up a building at SRP, he can give a portion of the lot for free.

“Why not? Can you imagine, the United Nation having its building at SRP. That would make Cebu prestigious. We should not have a stagnant mind and bureaucrats are like that,” the mayor said.

But as of now, Osmeña said that the main priority of the city once SRP sales are made is to pay its loan.

Osmeña said that the city will be paying P700 million this year as payment of its SRP loan.

The mayor admitted that it has been hard paying for the loan but the city has survived although some of the services were sacrificed in the name of development.

Among the benefits they had to hold off to pay the loan was the P2,000 promised to 28,000 senior citizens in the city per month.

But the mayor said that starting next year this will already be implemented provided that the senior citizens are registered voters of the city.

The city government is currently negotiating with Filinvest Land Inc. for a possible joint venture. The latter is proposing to develop at least 50 hectares at the SRP. – Mitchelle L. Palaubsanon/BRP

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'City to get share of Filinvest's dev't' (South Road Properties)

By Chris Ligan
Cebu Daily News
First Posted 15:25:00 09/30/2008

CEBU CITY, Philippines - Cebu City Mayor Tomas Osmena on Monday assured that the joint-venture agreement it may enter into with Filinvest Development Corp. over the South Road Properties (SRP) would be advantageous to the city.

Osmena said that whether Filinvest sells or rents out property that it develops in the SRP, the city gets a share of revenues.


Under the joint venture agreement, for any property that Filinvest sells in the SRP, the city gets a fraction of gross sales based on the phase of Filinvest's development. For phase 1, the city gets a 20-percent share. The share increases to 30 percent in phase 2, 40 percent in phase 3, and 50 percent in phase 4.

For properties that Filinvest rents out, the city will get a fixed 10-percent share of rental fees.

Osmena said that under Filinvest's P80-billion development plan, the company will develop at least 40 hectares of land at the SRP. The land is the city government's counterpart in the joint-venture agreement with Filinvest, while the company puts up residential condominiums, commercial complexes and office buildings, among others.

In addition, Filinvest will also buy additional properties in the SRP worth at P2 billion, amounting to 10 to 12 hectares, depending on the area's location. Seaside lots cost P11,000 per square meter, while inner lots cost P8,000 per square meter.

The mayor said he expected the economic development at the SRP to increase once Filinvest completes its P80-billion project. The mayor said this would increase employment in the city.

VIP treatment

The mayor said he envisions the SRP to be the “second home” of the country's wealthy.

He said he would make it easy for the rich to live in the reclaimed land, like putting up a transport system that would make it unnecessary for those living at the SRP to buy cars or hire drivers.

Occupants of the SRP would also have an easier time going to key areas of the metropolis, such as the airport.

Osmena said he would put up a bus service that would provide easy transport between the SRP and the Mactan Cebu International Airport. This bus service will be given priority on city streets and provided with police escorts that would allow them to bypass heavy traffic.

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