Ongpin-led Alphaland to spend P4-B on new Makati mall

02/22/2010 | By: Neil Jerome C. Morales, BusinessWorld
MANILA, Philippines – Ongpin-led property firm Alphaland Corp. will spend P4 billion in the next three years for a mixed-use project in Makati.

The project will allow the listed company to take advantage of the recovery in the real estate sector, the head of the firm said.

“We have [in our lineup] the Alphaland Makati Place. We are starting maybe this month,” Alphaland President Mario A. Oreta said in an interview.

The three-tower Makati Place, which will rise on Ayala Avenue Extension, is a partnership with the Boy Scouts of the Philippines. The one-hectare lot will have a sports club, a mall, and condominium units.

Asked on how much is the capital expenditure, Mr. Oreta said: “Initially it’s P2.2 billion [this year]. It will be around P4 billion overall in three years.”

It will be the second project of the property developer, which joined the stock exchange in December after taking over listed Macondray Plastics, Inc.

Alphaland is owned by RVO Capital Ventures Corp., a company owned and controlled by Roberto V. Ongpin and Eric O. Recto, chairman and president, respectively.

In October, Alphaland opened its first project, the Alphaland Southgate Tower in Makati. The building has a 40,000-square-meter office space atop a mall.

“We are looking at a dramatic [recovery] in the properties sector. You have an economic recovery and with it comes the [rise] of the real estate sector,” Mr. Oreta said.

Alphaland will tap bank loans through lead arranger Development Bank of the Philippines. “The money we will borrow will go directly for the project development. We are not going to borrow to [acquire land],” Mr. Oreta said.

But the firm might also tap the local equity market given a large asset base worth an estimated P15 billion.

Meanwhile, Alphaland Heavy Equipment Corp., which is in partnership with China’s largest heavy equipment manufacturer XCMG, will start operations in March.

“We are ready to start our first shipment of heavy equipment from China to here hopefully next month,” Mr. Oreta said. The firm will start with 100 pieces of heavy equipment that will be sold or rented to property developers.

“We are looking at local government units because during [tropical storm] Ondoy, a lot of roads and bridges were destroyed,” he said.

The heavy equipment might also cater to the mining sector, which is expected to recover given the uptick in demand for minerals.

Shares in Macondray Plastics were unchanged Friday at P54.50 apiece.

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