October 12, 2015

BLOOM buys land in Vertis North

Bloomberry Resorts Corp (BLOOM) announced last Friday that its property arm, Sureste Properties Inc (SPI), is purchasing a 15,676sqm land in Vertis North, Quezon City Central Business District. The lot is part of the National Housing Authority’s (NHA) share in its joint venture with Ayala Land Inc (ALI) in the Vertis North project. The total purchase price is P1.98b or P126k/sqm. SPI has paid the 20% down payment of P395m. Another 40% will be paid on 8 Nov 2015, and the remaining balance will be settled upon completion of the necessary documents. SPI proposes to develop the property into a mixed-use development with hotels, commercial and residential features.

 Our take: BLOOM said the acquisition will be funded by internally generated funds of SPI. BLOOM had cash of P12.9b as of end-1H15. While we view this as part of the company’s efforts to diversify its revenue sources, it remains to be seen how this will pan out given stiff competition among property developers in Quezon City and given ALI’s own development plans for Vertis North. It should also be worth monitoring how the company will finance the construction and development of the project alongside the company’s ongoing projects and planned new investments abroad as these will have cash flow implications. – WealthSec