MANILA, Philippines - Publicly-listed Alphaland Corp. is spending at least P16 billion until 2014 on 4 new real estate projects, as the Roberto V. Ongpin-controlled company aims to join the big league in the property sector.
The amount will cover a portion of the developments in one project (Bay City) and does not include the cost for the Boracay project.
“We will never be all things to all people. But what we do will be unique, and will definitely be done well,” Ongpin, Alphaland chairman, said.
Alphaland president Mario Oreta told The STAR that their business model involves raising the funds internally to acquire the land, and then using the land as collateral to secure a loan to finance the project.
For 2011, Alphaland will have a capital expenditure budget of around P3 billion, higher than last year’s P2.2 billion.
The company is developing:
- the P6-billion Makati Place which will include a members-only recreational club called The City Club (which will be ready by end-2012 with membership shares at P500,000 each) as well as residential towers and a mall
- the P3.5-billion Makati Tower which will be an upscale office building
- 424-hectare Balisin Island Resort in Atimonan, Quezon which Oreta said will cost at least P4 billion.
The company has secured a P2.4-billion loan for Makati Tower and is working on another P2.5 billion for the Balisin project. Both are from a consortium of local banks.
Also in the pipeline is the 34-hectare Bay City project to be located near SM Mall of Asia and will have a marina/yacht club. Oreta said they have no estimate yet of the cost of Bay City but the marina/yacht club alone will have a tag price of P2.5 billion (of which around P1 billion will be for the breakwater and about P300 million for an old cruise ship that will be converted into a clubhouse).
The Makati Place, Makati Tower and the marina club are expected to be ready by 2014.
Alphaland will also be developing the 500-hectare Boracay Gateway in Caticlan which will be located near the Caticlan airport. The project will be self-financed.
Company officials said they hope to have the polo field and clubhouse ready in time for the expected start of operations of the expanded Caticlan airport in 2014.
They noted that while their projects look ambitious, behind it is a company that, while relatively new in the Philippine real estate industry is nonetheless backed with strong financials, and more importantly, solid experience.
Alphaland’s net asset value is estimated at P15.87 billion, and its debt-to-equity ratio stands at 20%, making it one of the country’s financially strongest and more liquid real estate development firms.
In addition, a 40% ownership stake by Ashmore Investment Management Ltd., one of the world’s largest investment managers with funds under management of $50 billion, places Alphaland’s financial muscle beyond any doubt, and its capacity to complete its projects, beyond question, they added.
The remaining 60% of Alphaland is controlled by Ongpin.
Alphaland’s first project was the Alphaland HQ, Southgate Tower at the corner of EDSA and Pasong Tamo, a one-hectare, 20-story and P2.4 billion environment-friendly development. Annexed to it is a mall.
Alphaland chief operations officer Ding Santico and executive vice president for sales Belinda Herrera said in an interview that phase one of Makati Place, which will include the club and mall, will be ready by end-2012 while the three residential towers will be up before 2014.
With the unit cuts at 56 to 104 square meters at a price of around P120,000 per sqm, Makati Place will cater to the lower A as well as the B segments.
Makati Place will be a joint venture with the Boy Scouts of the Philippines (BSP) which owns the land. One of its towers will include service apartments that will cater to the needs of the users of the conference center mainly.
Meanwhile, the 34-story Makati Tower along Ayala Ave., with its lease price at P1,000 to P1,200 per sqm, would cater to higher-end entities such as headquarters of multinationals and even embassies for the penthouse. “We can sell, but it has to be the whole floor,” Alphaland officials said.
Meanwhile, the one-of-its-kind Balesin Island Club will have seven clusters of hospitality villas each with its own theme (ie. Filipino, Balinese, Thai, Greek, Italian, French) as well as its own private plane and 1.5-kilometer runway, and high-speed boat for those who want to travel by land and then be shuttled to the island. Alphaland is acquiring two planes.
Around 5,000 club shares will be sold at about P5 million each starting second quarter of this year and will entitle a member 14 days of stay at any villa/cluster.
Of the 400-hectare island acquired by Alphaland, only around 100 hectares will be developed to preserve the forests. Aside from club shares, the company may also sell lots or house-and-lot units.
Alphaland officials also revealed that Bay City will have office and residential buildings, hotels, marina/yacht club (shares will be sold at around P700,000-P750,000 per share), a boardwalk and shops.
Santico explained that unlike other yacht clubs which only serve as berths for private boats, members of the club can use the 10 boats/yachts (50 to 80 footers with crew) that will be acquired by Alphaland. “After all, not everyone can afford or wants to maintain their own boats,” he pointed out.
As for the Boracay Gateway project, it will be in joint venture with Akean Resorts Corp. (of the Albas of Prudential) which owns the 500-hectare property and which will have 40% stake.
Santico said that aside from the polo club/field, it will have a beach clubhouse, residential lots that will be for sales, its own ferry service, among others.