The joint venture involves the development of two residential buildings on Philrealty’s property at the Bonifacio Global City in Taguig.
Philrealty will also receive no more than P100 million as its share of the profits from the partnership.
Under the agreement, Philrealty will contribute two adjacent lots covering 4,423 square meters while Next Properties will be solely responsible for the construction of the two towers over a period of five to six years.
Philrealty plans to build smaller condominium units in the former military complex which the company believes is most marketable at the moment.
Cash generated from the proposed project will be used to finish the company’s Andrea North residential complex in New Manila, Quezon City, estimated to cost P1.18 billion.
The completion of the Andrea skyline project is critical to the firm’s rehabilitation efforts "as this would restore public confidence on Philrealty’s ability to continue and complete its on-going projects and undertake new projects in line with its main purpose of real estate development."
Philrealty is expected to raise about P3.89 billion in cash over a period of 15 years assuming that the company can limit total administrative expenses to a yearly increase of five percent per annum.
Philrealty filed for rehabilitation with the courts after being saddled with losses since the slump of the real estate industry in 1997. In its petition for suspension of debt payments, Philrealty said its cashflow has been insufficient to fully service its P3.76-billion liabilities as well as finance its working capital needs.
Under its rehabilitation plan, Philrealty will settle P1.31 billion in secured debt through dacion-en-pago or payment-in-kind scheme and restructure P890.6 million in debt over a 10-year period.
Since 1998, the company has been offering land properties to the banks as payment for its debt obligations.
Once a high-profile real estate company, Philrealty is primarily known for its projects in the Ortigas Center, foremost of which is the Textite Towers – the headquarters of the Philippine Stock Exchange (PSE).
Philrealty’s other assets include the Alexandra Condominiums in Ortigas and lot properties in Tagaytay, Batangas, Quezon and Rizal.