Henry Sy’s SM Group is now the biggest office space player in the Bonifacio Global City (BGC) in Taguig City after acquiring 10 property firms that are mainly involved with the development and operation of office buildings in the area.
The estimated value of the acquisition is more than P18 billion. Henry Cabrera, Associate Director in real estate services firm Jones Lang LaSalle (JLL), said on Wednesday that the acquisition of five net office buildings in BGC by the SM Group made the latter the top landlord in the area, pushing property giant Ayala Land, Inc. to second place.
It was reported earlier that SM Investments Corp. (SMIC) purchased the 90 percent interest of CPI Asia Ten B.V. in 10 companies that own five office buildings within a special economic zone located in BGC. CPI Asia is the unit of global asset manager Apollo Global Real Estate owned by billionaire Leon Black.
The office buildings that Cabrera was referring to are the Net Plaza, Net Cube, Net Quad, Net Square, and Net One.
Specifically, the firms that were acquired by SM are Crescent Park 14-678 Property Holdings Inc., 14-678 Property Holdings Inc., Crescent Park 6-24 Property Holdings Inc., 6-24 Property Holdings Inc., Crescent Park 18-2 Property Holdings Inc., 18-2 Property Holdings Inc., Crescent Park 6-3 Property Holdings Inc., 6-3 Property Holdings Inc., Crescent Park 19-1 Property Holdings Inc., and 19-1 Property Holdings Inc.
Cabrera said that the acquisitions may give an income increase from 7 percent to 8 percent before tax for the SM Group.
Because of the deal, the strong interest for BGC among other developers will remain strong.
“There will be more office projects in the BGC,” Cabrera said.
Office space take-up in 2014
Citing several factors including SM’s acquisition of the Net office buildings, JLL officials said that it was a record year for office developments and this will continue until next year.
“We are very optimistic. [The year] 2014 is going to be a good year for the office sector,” Lizanne Tan, another associate director in JLL, said.
Lyla Fronda-Ledonio, also a JLL associate director, cited that the business process outsourcing (BPO) industry remains the main driver for office developments, specifying that BGC and Quezon City are the top locations for BPO developments.
“In three to five years, bulk of the supply will come from BGC. We are also not seeing bubble in office market because the supply is being fully taken up quickly,” Sheila Lobien, a JLL associate director, further said.