The Privatization and Management Office, an attached agency of the Finance Department, plans to sell the 2.2-hectare Mile Long property in Makati City in four blocks before President Rodrigo Duterte steps down from office in 2022.
Chief privatization officer Gerard Chan said in a news briefing the PMO”•an agency tasked to dispose of the government’s idle assets”•divided the controversial property into four blocks.
“We divided it into four blocks. The initial plan is to bid it out in phases: phase one, phase two, phase three, and phase four to get a better price. We will not bid it out in one phase. We may chop it into four developments, four phases,” Chan said.
Chan said the sale could be done before 2022. He said the plan was already presented to President Rodrigo Duterte.
Chan did not rule out the possibility of doing an outright sale of the property but said the policy direction of Finance Secretary Carlos Dominguez III was more of a joint venture.
“What will happen is joint development. The government will contribute the land, then the developer will develop the buildings there and later on they will share the income,” Chan said.
He said Dominguez wanted to tap the services of state-run Bases Conversion and Development Authority which has the mandate and experience in bidding out assets via joint venture or private-public partnership.
“So we’re trying to look at the possibility of the BCDA entering the picture and the disposition in conjunction with PMO,” Chan said.
Chan said that as a part of the preparation for Mile Long’s eventual disposition, the PMO hired a world-class architect and urban planner Felino Palafox Jr. to prepare the masterplan for the whole complex.
“The proposal of Palafox is a mixed-use [development], mixed residential and commercial. Of course, we will bid this out later on. We will guide the bidder that this is the idea for the development so the bidder will have to follow,” Chan said.
Chan said PMO also talked to the Makati City government on the possibility of putting one subway stop near Mile Long near the entrance of the Skyway.
“Then we can put a transport hub there. The idea is this could be another gateway to Makati,” Chan said.
Chan said Mile Long is one of the biggest assets of the government given its very prime location. He said PMO started leasing out spaces to private tenants two years ago.
He said the net income for the property reached P160 million in two years of operation at a 70-percent occupancy rate. “We’re leasing it out preparatory to the disposition. Our objective is to dispose [the property],” Chan said.
“The lease agreement is month to month. It is very clear with the tenants that this is a short-term month-to-month basis until we finalize this whole thing,” Chan said.
Chan said part of the proceeds from the privatization “would be used to fund the military pension that is why BCDA is entering the picture but I don’t know the specifics.”
Chan also said PMO needed to get a financial adviser to ascertain the potential revenues for the asset disposition.
Chan said the government’s net earnings of P142 million in rent over a 21-month period for the Mile Long Property represented an average profit of around P6.7 million per month.