[ Published by BusinessWorld Online ] [Vol. XXI, No. 126 ]
Monday, January 28, 2008 | MANILA, PHILIPPINES
LOPEZ-OWNED property developer Rockwell Land Corp. has allotted P16 billion for two projects that are set to be launched this year, company officials said.
In a briefing last week, Rockwell officials said the company would start on the one-hectare Lopez Center in Makati City and the 5.5-hectare The Grove along C5 Road, Pasig City.
The projects, company officials said, would push through even if Rockwell’s planned $100-million initial public offering (IPO) is shelved, as the firm could tap private equity for funding.
"We have that flexibility to source our funding from the banking sector. I guess funding for the projects is not a main issue. We have been approached by equity investors... even private equity is an option," Rockwell Land Assistant Vice-President for Business Development Ninalyn S. Cordero said.
The Grove will transform the former site of General Milling Corp. along C5 Road into a residential haven that will target the mid-range market.
It will feature five towers of high-rise condominiums.
"It is going to be our major project. The quicker we can do it, the better. We will start construction early next year but we will launch it this year. We are still in the finalization stage. Development will take five to seven years," Ms. Cordero said, adding that Rockwell might still expand the project.
Meanwhile, The Lopez Center will be the last project to be constructed in Rockwell Land’s 15.5-hectare Rockwell Center in Makati City.
The office space will be fully operational by 2011.
Valerie L. Soliven, vice-president for sales and marketing, said the Lopez Center would house the headquarters of the Lopez-led companies.
"We are hoping most of the companies in the Benpres building will transfer. We don’t know what we are going to do with it (Benpres building). But the plan was to move as soon as the Lopez Center is built," she said.
Rockwell Vice-President for project development Bong C. Filart said the Lopez Center would be the "iconic tower" at Rockwell Center.
"It is supposed to be the tallest building in the Philippines. But it won’t be as tall as the original plan. We are still looking at 50 plus storey building," he said.
Ms. Cordero said the company’s IPO plans would depend on market conditions.
Earlier, two firms — Cebu Air, Inc., and Petrolift, Inc. decided to defer their planned IPOs due to unfavorable market conditions.
"If we are making preparations, it is to go for the soonest possible time we can list. But no one can tell. No one will be spared from the subprime as we see it happening globally. Because our local fundamentals are very sound, we are still very optimistic," Ms. Cordero said.
Rockwell Land plans to sell 25% to 30% of its shares on the stock exchange.
It has appointed CLSA, a brokerage, investment banking and equity group under France’s Credit Agricole, as underwriter for its public offering.
"We are looking at floating 70% to the international market and 30% locally," Ms. Cordero said.
Lopez-led First Philippine Holdings, Inc. owns 24.5% of Rockwell Land, while power distribution utility Manila Electric Co. (Meralco) — also a Lopez-led firm — owns 51%.
The remaining 24.5% stake is owned by Benpres Holdings Corp.
Ms. Soliven said Rockwell Land saw a 30% increase in sales last year at P5.7 billion.
"For this year, mostly local residents are buying [condominium projects]. There is a lot of familiar names. There is a lot of our clients who bought initially then bought their second and third units," she added.
Meanwhile, the construction of three business process outsourcing (BPO) facilities in the Meralco compound in Ortigas Avenue, Pasig City is proceeding, Jose Luis F. Matti III, general manager of Rockwell Integrated Property Services, Inc., said.
"We plan to have it ready for fit-out by fourth quarter this year," he said.
"We are temporarily calling it as The Business Center," he added.
The development will have three towers with a total leasable area of 76,000 square meters.
"It is going to be campus-type. It is something different as it will have a lot of greenery. The site itself is over a hectare," Mr. Matti said.
The BPO project, which broke ground last August, is a joint venture between Meralco and Rockwell Land.
Mr. Matti said they would secure approval from the Philippine Economic Zone Authority so locators will enjoy tax incentives.
There are already three locators for The Business Center but he declined to disclose their identities due to confidentiality.
Mr. Matti said he was optimistic that the BPO market in the Philippines won’t be significantly affected by US woes.
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