By Ayen Infante
The Daily Tribune, Friday, August 13, 2010
After the successful sale of the former Joint US Military
Advisory Group (Jusmag) property, the state-owned Bases
Conversion and Development Authority (BCDA) said it is
readying the disposition through joint venture of another
significant parcel in Bonifacio South.
BCDA has published a notice of invitation to firms seeking
to challenge the unsolicited proposal of SM Land Inc. (SMLI)
for the 33.1-hectare military area in Bonifacio South.
The property is composed of lands presently occupied in part
by the Army Support Command and Special Services Unit of the
Philippine Army and in part by the Bonifacio Naval Station
and Philippine Marine Corps of the Philippine Navy.
These lands were transferred and subsequently titled to BCDA
for disposition or sale. The property lies outside the areas
earlier identified by President Aquino for long-term lease to
generate funds to be used in augmenting the AFP modernization
budget in his State of the Nation Address.
The joint venture proposal submitted to BCDA by SMLI would be
subject to competitive challenge as required under the National
Economic and Development Authority joint venture Guidelines.
SMLI’s proposal offers an upfront cash of P2 billion upon
signing of the JV contract and secured yearly revenues, totaling
P25.9 billion for 20 years, for a present value of P36,900 per
square meter. Investment commitment of SMLI for the project
stands at a minimum of P20 billion.
SMLI has also committed to advance the funds for and undertake
the replication of military facilities affected by the
development of the property. Final determination of the
replication cost of affected military facilities is currently
Under the BCDA law, bulk of the disposition proceeds from Fort
Bonifacio and Villamor Air Base will go to the AFP Modernization
Fund which urgently needs more cash infusions as well as the AFP
replication and relocation expenses. As of December 31, 2009,
BCDA has generated P46.495 billion in disposition proceeds.
Under the Bonifacio South master plan, the proposed area for
disposition would be developed into a medium- to high-density
residential and mix use complex, with a strong institutional
component and has a maximum allowable gross floor area of 1.355
The property is located along Lawton Avenue and is separated
from the JUSMAG property by the NAMRIA area and a sic-hectare
strip of land retained by the Philippine Army.
The 2009 bidding for the JUSMAG property under Annex A of the NEDA
JV Guidelines yielded a present value of secured net cash inflows
of P31,111 per sq.m., under which the upfront cash was P1.5 billion
upon contract signing, secured yearly revenues totaling P20 billion
over 22 years and P700 million will be advanced for the replication
of the military quarters occupying the JUSMAG property. Minimum
investment for the development of the JUSMAG property is P22 billion.
The projected yields under proposals submitted by interested private
sector proponents for both JUSMAG and the new area are way above
third party appraisals of P15,000 per sq.m. and P8,000 per sq.m.,
respectively, conducted on the properties in 2009.
BCDA is confident that in this disposition, the government will be
able to take advantage of the strong real estate sector at present.
The disposition will also answer in part the urgent need for funds
for the AFP Modernization Program and other government projects.