Philrealty gets nod to go into 'dacion en pago' deal

Philippine Realty & Holdings Corp. (Philrealty) said Friday the rehabilitation court has approved its dacion en pago agreement with Bank of the Philippine Islands to settle obligations amounting to P168.53 million.

Under the deal, Philrealty will swap some of its office condominium units at the PSE Centre in Ortigas and a property in Lucena City in Quezon province in exchange for the settlement of its debt to BPI.

The property firm said its debt is expected to go down to less than P100 million by the end of the year should other major creditors accept a proposal to settle debt through payment-in-kind scheme.

From P829.5 million in 2006, Philrealty managed to bring down its debt to P532 million at the end of 2007, using cash generated from the sale of a lot in Fort Bonifacio and proceeds of a joint venture of another lot in the former military complex dubbed Icon Residences, a twin tower 34-storey luxury residential condominium building.

The Icon Residences is now more than 90 percent sold and is slated for completion by the end of 2009. The project is a partnership with Xcell Property Ventures Inc.

With cash of more than P300 million, Philrealty is preparing for the resumption of construction of the Andrea North Skyline Tower with completion targeted by the end of 2009.

The three-tower Andrea Skyline Tower is located at a 2.8-hectare property in New Manila, Quezon City, which was formerly the site of the Pepsi-Cola plant. It will be similar to its upscale Alexandra residential condominium complex in Ortigas.

The first tower of Andrea North is estimated to cost over P900 million which will be funded by proceeds of the sale of remaining 105 unsold units with a total selling price of P1.28 billion.

Philrealty is confident it can finally complete the Andrea Skyline project with the additional cash to be received from its joint venture with Excell.

The company’s strategy is to enter into joint ventures whereby it will merely contribute the land and other pre-development expenditures while the partner will shoulder the cost of construction of the building.

Other projects in the pipeline include a boutique residential subdivision or a warehouse park in San Fernando, La Union; a condominium resort in San Juan, La Union; and a retail strip in Lucena City.

Given the steady stream of its revenues, Philrealty is aiming to get out of rehabilitation in the near term.

The company filed for rehabilitation with the courts after being saddled with losses since the slump of the real estate industry in 1997.