The government earned P142.6 million from the 2.2-hectare Mile Long property in Makati City since it took over the management of the state-owned prime real estate in August 2017, the Finance Department said Wednesday.
Gerard Chan, the chief privatization officer of the DoF-attached Privatization Management Office, said the government’s net earnings of P142 million in rental fees over a 21-month period for the Mile Long property represented an average profit of P6.7 million a month.
He said the government was not able to collect rental fees from the prime Makati lot’s former lessee, Sunvar Realty Development Corp., for 14 years prior to PMO’s takeover in 2017 because of a pending legal case over the property.
Chan said in a report to Finance Secretary Carlos Dominguez III that since the government took over the management of the property from Sunvar in August 2017, the government had earned a gross income of P185 million in rental fees.
He said deducting expenses totaling P42.46 million over the August 2017 to June 2019 period resulted in a net income of P142.6 million.
“That’s roughly [an income of] P7 million a month from zero,” Dominguez said upon hearing Chan’s report during a recent DOF executive committee meeting.
Dominguez was referring to the 14-year period when the government was earning nothing from the Mile Long property because the government was embroiled in a legal battle with Sunvar which refused to vacate the property after its lease contract expired in 2002.
Chan said that as of June 2019, 128 establishments were now occupying 219 of the 309 available units in Mile Long, representing a 71-percent occupancy rate. The government also earns from leasing out the three parking areas in the property, Chan said.
Dominguez said in 2017 the government planned to privatize the controversial Mile Long property as part of an effort to raise more funds for development projects.
Dominguez said the government’s plan was to speed up the privatization of more state assets, starting out with the “big ones” including the Philippine Amusement and Gaming Corp. and Mile Long.
The Makati Regional Trial Court Branch 141 ordered Sunvar Realty in August 2017 to vacate the Mile Long property following the resolution of the Court of Appeals. The order was served by Solicitor General Jose Calida and the court sheriff on Sunvar and other tenants of Mile Long.