January 09, 2014

FLI acquires GSIS property in Ortigas for P771.5m

Various newspapers today reported that FLI has won the bidding conducted by the GSIS for the Philcomcen building standing on a 2,411sqm lot. This translates to an effective price of P319,992/sqm vs. the P104,925 171,860/sqm average valuation by Colliers (based on its 2Q13 report) for Ortigas properties and the P192,625/sqm floor price set by GSIS. GSIS has separately announced a bidding contract for the demolition of the unused building.

Our Take: We think that the property has a very attractive and strategic location, being across Robinsons Land’s flagship mall and some hotels. However, on any reckoning, FLI’s bid seems very aggressive and even hews closer to the upper range of the P283,185 - 325,275/sqm average valuation by Colliers for Makati lots.

Based on GSIS timetable for the demolition contract for the building, the company may not be able to start construction for any project on the property until 1Q15. In this light, we think that FLI might have aggressively bid for the property unless there are other unpublished considerations for the bid. This may not be taken positively by the market.– WealthSec