Puregold ties up with ALI for retail projects

MANILA, Philippines - Property giant Ayala Land Inc. (ALI) and retail chain Puregold Price Club Inc. are partnering anew, this time for the establishment of supermarkets in ALI developments.

The agreement, which comes just weeks after the property firm entered the healthcare sector, marks another  ALI foray to add services to its mixed-use developments.

Specifically, ALI subsidiary Varejo Corp. and Puregold’s newly-created unit Estenso Equities Inc. signed a joint venture agreement “to develop and operate mid-market supermarkets for some of ALI’s new integrated and mixed-use developments.”

“This new supermarket product will further enhance our retail offerings, which have been recently expanded to include our other department store and convenience store joint ventures,” said ALI president and CEO Antonino T. Aquino.

The mid-market supermarket brand will be developed by Varejo and Estenso Equities, which was created last week by Puregold to house its investments in food retail-related activities.

“The joint venture company will still be incorporated. It is a 50-50 ownership,” Jimmy F. P. Perez, investor relations officer of Puregold, said in a phone interview.

“If plans will push through, the first store will be opened next year,” Perez said, adding that the partnership gives Puregold the first crack at new ALI projects like shopping malls and integrated developments.

In 2011, ALI partnered with Puregold’s Ellimac Prime Holdings Inc. for the Fairview Terraces, a mixed-use development with mall and office components. Last year, the retail chain opened Puregold Subic at ALI’s Harbor Point Mall  in Subic, Olongapo.

Puregold,  the closest competitor of grocery giant SM Retail Inc., targets to grow its consolidated net sales by 30

percent to roughly P75 billion this year from P57.5 billion in 2012.

ALI said the joint venture is part of its growth strategy for the retailing business.

The property unit of the Ayala conglomerate earlier entered the convenience stores business by bringing in Japan’s FamilyMart. It is also developing a department store concept with the Rustan’s Group.

Last week, ALI acquired the Mercado family’s Whiteknight Holdings Inc., which owns 33 percent of Mercado General Hospital Inc. The hospital will expand in locations where there are existing ALI developments or where ALI plans to put up new projects.

ALI allotted P65.5 billion in capital expenditures this year as it plans to launch 69 new projects worth P129 billion to ensure continuous growth in the coming years.

In the first quarter, profits of the property developer jumped 30 percent to P2.76 billion on the back of better performance across all business segments. Consolidated revenues hit P18.53 billion, up 38 percent from P13.39 billion in the same period last year.