Andrea North Skyline Tower

Property developer Philippine Realty and Holdings Corp. (Philrealty) traded its shares at P0.72 on Monday, 18.18 percent lower than its highest traded price of P0.88 on October 5.

Nothing unusual in this activity, but for those who have been closely following Philrealty’s story, it is significant that the shares traded at a level similar to its performance before it succumbed to the Asian financial crisis in 1997.

Philrealty last reached this level on November 26, 2006 when it hit a high of P0.87 per share before closing a few centavos lower at P0.84 per share.

Many observers in the market are closely watching how the company would unravel after it announced intention to move out of its court-approved rehabilitation.

The company recently finished its mothballed Andrea North Skyline Tower in New Manila, Quezon City, ushering the company’s return to the realty business after nearly eight years of rehabilitation that began in December 2002.

The Andrea Tower is a reminder of the crisis that the company faced, forcing it to shed many of its assets that were dacioned to creditors.

The completion of Andrea Skyline Tower, which was 50 percent finished when construction was suspended, is part of the company’s rehabilitation process, and according to company president Amador Bacani, signals its exit from rehabilitation.

The company is now looking at a follow-up project from the other phases of the five-tower Andrea residential complex while looking at other opportunities to become a major player again in the realty sector.

As of end-September, Philrealty reports a total asset of P4.16 billion, up 9.5 percent from the end-2009 asset of P3.8 billion.

With a liability of P913 million, down 2.42 percent from the previous year’s P936 million, the company has a net asset value of P3.25 billion, up 13.63 percent from P2.86 billion last year. At the height of its troubles, the company incurred a total debt of P2.2 billion from a number of banks.

Philrealty reported a nine-month income this year of P35.66 million, up 31.92 percent from the previous year’s P27.04 million.

Jose F. Santos, Jr., Philrealty marketing vice president, said they are looking at a 28-storey tower, with a floorplate of 900 - 1,000 sq.m. to compliment the Skyline Tower of Andrea North. With an estimated development cost of P1 billion, Santos said the company is presently studying how to go about with the project’s design.

Financing of the project is seen to come from the sale of remaining units in North Andrea’s Skyline Tower. The launch of the project is slated towards the end of the year.

Santos earlier said that about 85 percent of units in Skyline tower has been sold with only the small units now available. The project is popular with big families not adequately serviced by current developers, said Santos.

Units range from one-bedroom units with a size of 45-64 square meters to the larger three and four-bedroom units that have an area of 206-220 square meters.

Bacani earlier revealed that Philrealty will be spending about P700 million to P800 million for the third and fourth tower and about P1 billion for the fifth tower of Andrea North.

The launching of three of the four towers is expected in three years at the rate of at least one tower a year while construction of all towers is expected to be fully completed in five to six years, according to Bacani.

Philrealty also expects to construct Ivy League Square near De La Salle University in Manila which is designed mainly for students.

The foundation for the Ivy League Square was built before the company entered rehabilitation.

Bacani expects its next projects to cost as much as P4.5 billion, which will be pursued after it exits corporate rehabilitation later this year.

Bacani said Philrealty is also eyeing interested parties that will enter into joint-venture with them in developing properties other than their own.

"After using up some of our lots for joint development by other property firms, this time we will be the developer of other people’s land," said Bacani, noting that much of Philrealty’s properties were used as payments for obligations.

Philrealty recently entered into joint ventures for the development of its property in Bonifacion Global City which was developed into the Icon Residences and Icon Plaza.

For the new joint ventures, Bacani said they will continue to leverage on their brand which is known for prime developments.

Before it ran into trouble, Philrealty built the Tektite Towers, housing the Philippine Stock Exchange headquarters, in 1996. It also completed in 1991 the luxury residential condominium complex, Alexandra, along Meralco ave. in Ortigas Center. The condominium sits on a 4.2 hectare property and is divided into five clusters with a total of eleven five to 14-storey buildings.

For details on Andrea North Skyline Tower, contact Reby Ramirez @ +63 916.4044.555 / +63 922.883.9308 / +63 919.699.3572 or e-mail her at reby_ramirez@yahoo.com.

Source: Business Insights, 07 December 2010

RA 9646, popularly known as Real Estate Service Act ( RESA ) has been approved for implementation when its Implementing Rules and Regulations ( IRR ) was published on July 24 2010 at Philippine Daily Inquirer and Philippine Star. For details on the RESA Law, visit www.ra9646.com, the central repository of all updates on RA 9646.