Ayala Land: P24B price for FTI 'fair', 'reasonable'

Posted at 08/15/12 5:52 PM

MANILA, Philippines - Ayala Land Inc. (ALI) on Wednesday defended its P24.33-billion winning bid for the government's FTI complex, saying it was a "fair" and "reasonable" price.

Some analysts had earlier questioned ALI's "high" acquisition cost for the FTI property, since it was P9 billion more than the second highest bid of P14.66 billion made by Gokongwei-led property developer Robinsons Land Corp.

Jaime Ysmael, ALI chief financial officer, said the bid price was reflective of the company's overall vision for the 74-hectare property to become the "southern gateway" to Metro Manila. 

"We believe the price is fair. It properly reflects what we envision as the right development formula for the property. We are confident that the price is rational, reasonable and reflects the potential of the property," Ysmael told ANC's Coco Alcuaz on Wednesday.

With the P24.33 billion bid, the FTI property comes out roughly at P32,800 per square meter. ALI earlier said this was a "significant discount" to land values in Makati City and Bonifacio Global City.

While some property developers did not make a bid due to FTI property's lack of accessibility and existing leases, ALI appears to be unconcerned about these issues.

"The accessibility issue has always been there in the past. Based on our familiarity with the property having been involved with the previous bids, as well as our understanding of the plans of the government, there is a definitely a plan to provide access to C5 via FTI and the connection to SLEX that will make the property accessible," Ysmael said.

As for the outstanding leases, Ysmael said there is already a significant part of the property - 50 hectares - that is already free and clear. "The existing leases will expire in the next couple of years. By the time we finish planning, 90% of the entire property can be developed immediately," he added.

The FTI property is being envisioned as another business district that will complement other Ayala developments in Makati, Bonifacio Global City and Quezon City.

"We envision this as a major transportation hub serving as gateway to the south. With the access to C-5 and SLEX, we believe it can serve as another business district to anchor the south and complement nicely what we have in Bonifacio, Sta. Ana and Vertis North," Ysmael said.

Ayala Land is currently developing several major projects, such as the P30-billion urban hub One Bonifacio High Street in Bonifacio Global City; and the P65-billion Vertis North, envisioned as the central business district in Quezon City. The company is also working on a deal to acquire OCLP Holdings, the property firm owned by the Ortigas family.

"It will be a lot of work. I believe it will be quite challenging and exciting for the organization. We expect to leverage on all of those resources available to us, working smarter and being able to execute simultaneously and still deliver properly on all of these projects," Ysmael said.

The company, however, will have to reevaluate its budget to determine the need for additional funding for these projects.

"The balance sheet is quite strong. We have access to resources we can tap to fund these acquisitions," Ysmael said.