(Source: Rappler | 26 February 2016)
Being the site for the common station of North-South Railway project, Tutuban Center will be strategic for property developer Ayala Land.
Ayala Land, Incorporated has finalized the acquisition of a majority stake in Prime Orion Properties, Incorporated,owner of a Tutuban retail complex in the shopping district of Divisoria in Tondo, Manila.
Ayala Land and Prime Orion on Friday, February 26, said in separate disclosures to the local bourse that they executed a deed of subscription, with Ayala Land subscribing to 2.5 billion common shares of stock of Prime Orion.
This is equivalent to a 51.06% stake in Prime Orion.
The transaction is priced at P2.25 ($0.047) per share, totaling P5.62 billion ($118.38 million).
Ayala Land said it initially paid P1.41 billion ($29.70 million), or 25% of the total subscription price.
The remaining 75% will be paid upon fulfillment of certain terms and conditions, both firms said.
To implement Ayala Land’s subscription, Prime Orion will file with the Securities and Exchange an application to increase its authorized capital stock to P7.5 billion ($157.98 million) from P2.4 billion ($50.54 million), divided into 7.5 million common shares of stock, with par value of P1 ($0.021) per share.
After the transaction, public float of Prime Orion will drop to 32.16% from the current 65.62%.
Ayala Land earlier said the acquisition of Prime Orion is aligned with the company’s strategy to expand its leasing business.
Tutuban Center is a bargain retail complex that sits on a 20-hectare property. This will also be the location of the North-South Railway ProjectTransfer Station, which will interconnect with the Light Rail Transit Line 2 (LRT2) West Station.
Tutuban Center currently has 60,000 square meters of gross leasable space.
The company, however, plans to expand its retail complex by adding another 40,000 square meters of leasable space over the next two to 3 years.
Ayala Land has been strengthening its recurring income business by developing more shopping malls, office and hotels.
By 2020, Ayala Land targets 50% of total revenues to come from recurring business, while the remaining 50% will be sourced from residential sales.
Ayala Land plans to achieve this target by tripling the size of shopping malls to 3.6 million square meters, office space to 1.8 million gross leasable area, and hotel and resorts to 6,000 room keys by 2020.