January 09, 2014

BCDA readies privatization of military camps

Various newspapers today reported that the Bases Conversion Development Authority is eyeing to generate up to P75b from the sale or lease of some military camps and economic zones across Luzon. Among the big-ticket properties up for privatization this year are the1,300 has. in Clark Green City in Pampanga ( P26.3b), 33.5 has. inBonifacio South Pointe in Taguig (P36.3b), 16 has.

in Poro Point in La Union (P2b), 7.2 has. in various Metro Manila camps (P3.5b) and 12 has. in other special economic zones (P6.87b). The BCDA is also reportedly crafting a master plan for other camps, including some portions of the 176-hectare Camp Aguinaldo, which may involve their sale, lease, or development for government retention.

Our Take:Property companies stand to benefit from the sale of these military camps as it will provide them with an immediate source of contiguous landbank for development. Depending on the resulting valuations, the sale of these properties can also trigger revaluation of the land assets of property firms located within these areas and thus can provide a potential boost to net asset valuation estimates.

We just take note though that some of these properties are currently subjects of legal claims. For instance, there is a court restraining order on the BCDA from bidding out the Bonifacio South Pointe pending the resolution of a case filed by the SM group. The latter earlier offered an unsolicited proposal for the property and has asked the court to compel the BCDA to initiate a competitive challenge to the proposal.

Meanwhile, Camp Aguinaldo and Camp Crame (~40has) are reportedly covered by a deed of donation which calls for their reversion to the previous owners (the Ortigas group) the moment they cease to be used for military purposes. Both Ayala Land Inc (ALI, Buy) and the SM group have stakes in the Ortigas company.– WealthSec