GSIS inks joint venture with Megaworld
State-run Government Service Insurance System (GSIS) has formed a joint venture with Andrew L. Tan-led Megaworld Corp. for a P3.5-billion residential project in Pasay.
The deal marked the second joint venture property development project of the pension fund.
“Megaworld will put in around P3.5 billion,” GSIS President and General Manager Winston F. Garcia told reporters late last week. “Our equity there is worth P400 million. After that is constructed, our equity will be around P1 billion,” Mr. Garcia added.
Under the deal that was signed two weeks ago, listed Megaworld will build three 20-storey condominium units. The “Palm Bay” project in Pasay will be near the Manila Yacht Club and the Cultural Center of the Philippines, facing the famed Manila Bay sunset. The project will be completed in 2014.
In January 2008, GSIS signed a deal for the property arm of San Miguel Corp. to construct a P1.7-billion hotel in Makati. Listed San Miguel Properties, Inc. and the pension fund will share ownership of and income from operations of the 500-room hotel that will be opened early next year.
For Palm Bay, each tower will have about 300 one-bedroom units.
Forty-three-square-meter (sq. m.) units are being pre-sold at P95,000 per sq. m. The price will likely go up to P120,000 per sq. m.
“It is halfway house. It is accessible to Makati and to SM Mall of Asia,” Mr. Garcia said, adding that the project is aiming to sell to young professionals.
Last year, GSIS awarded the joint venture contract for the 8,000-sq.m. area to Megaworld, which is now finalizing the building plan, Mr. Garcia said.
Asset disposal hiked profits of GSIS by a tenth to P18.5 billion in the first four months of the year. The gain was due to the P6-billion sale of GSIS’ 5.9% stake in Philex Mining Corp., the country’s largest miner.
Mr. Garcia said GSIS’ assets have gone up to P600 billion last year from about P180 billion nine years ago.
State-run GSIS also expects to earn from commercial and parking fees.
Megaworld, which has allotted up to P10 billion for capital expenditures this year to fund five new residential projects, was chosen as the government’s joint venture partner to develop the former Joint United States Military Advisory Group property at Fort Bonifacio in Taguig for P22 billion over a period of 20 years.
Parent Alliance Global, Inc. through Travellers International Group, Inc., has a joint venture with Genting Hong Kong Ltd., to build Resorts World Manila in Newport City and Resorts World Bayshore City within the 90-hectare Bagong Nayong Pilipino Entertainment City Manila.
Shares in Megaworld — whose profits rose by about a tenth to P1.098 billion in the first quarter on the back of stronger revenues from project sales and rentals — went down to P1.18 each yesterday from P1.20 on Friday. BusinessWorld