 |
|
|
|
 |
|
|
|
|
|
|
|
When
Gamma-F Asia Inc. acquired the lease contract for 47
Rizal Highway corner Manila Avenue, back in the year
2000, we thought we were just in an abandoned rocky
and grassy plot which nobody wanted. It was bare, and
it was in an area where there was no development.
However, it is located right at the entrance of SBFZ
at Rizal Avenue, which connects to the main city proper
of Olongapo. This corner lot is strategic and is accessible
to all pedestrians and motorists.
Although it is located in the Central Business District
(CBD), the corner lot indeed is at the end of the CBD,
and was not (then in 2001) considered part of the busy
commercial section of SBFZ. In fact, even
|
 |
|
|
|
|
 |
the TV cable company did not have its facilities extended
there due to “lack of business potential”.
The phone company likewise had no telephone lines for
high speed cable internet running through there.
In short, due to the fact that nobody else wanted the
area, we got it “relatively cheap” from
SBMA. We acquired the lease for 8,718 sqm worth of open
land in 2001. The company was granted a Certificate
of Registration (CR) to engage in leasing of office
spaces, construction, and telecommunication sales. The
area given to us was then zoned for “Business
Tourism” purposes.
|
|
|
|
| |
Since we set up office in SBFZ in 2001, the property prices
has gone way up and sky-rocketed in the last two years for
various reasons: |
|
|
| |
1. The entry of Hanjin Shipping (one
of the world’s largest shipbuilding companies)
here in the former American naval base, has added more
than 5,000 jobs, and more welders are needed daily.
2. There has been a tremendous growth
in property development activity, and there is now
a housing shortage for companies that are setting
up shop in here.
3. There are now 8 new hotels, and
condo construction is at a fast pace. The entire stretch
of Dewey Avenue has now been zoned for such activity.
4. More manufacturing companies are
setting up facilities here adding to the frantic demand
for housing, eateries, fast food, clinics, higher
speed internet, coffee shops, boutiques, shopping
areas, schools, hospitals, and community-related support
services.
|
 |
|
|
|
|
5.
The housing units in Binictican and Kalayaan residential
areas are all gone, and prices for vacated units are
not triple in value (since 2001). Before a 25 year lease
for a typical housing unit could be had for US$20,000.00.
Now, the asking price is US$140,000.00 for a 25-year
lease.
Today,
our single-floor area is surrounded by development
of high-rise and modern buildings being construction
all over. Taller buildings are rising in front of
us, and to our flank, more commercial establishments
are being constructed all along the busy central business
district areas.
We
are being left behind with all these developments.
Large companies are bank-rolling the construction
of housing and office spaces all along the CBD areas.
What
was once a barren and abandoned segment of SBFZ is
now all of a sudden fast becoming transformed into
a very busy area. In ten years, SBFZ will take the
appearance of a commercial zone like Makati, or Ortigas
Center.
Because of the tremendous demand for property (and
now the lack of commercial space availability) in
the Freeport zone, the price per square meter that
we used to pay for (and are still paying now) is now
worth more as follows:
|
| |
Value per
sqm in 2001
:
Value per sq m in 2007 :
Value per sqm in 2010
:
|
US$0.50
US$2.47
US$4.10/sqm (Projected)
|
|
|
|
|
When we renew in 2011, the lease rate is expected
to shoot up to more than US$4.00/sqm then.
Right now, although the value/sqm is now US$2.47,
we are safely locked in a contract that is pegged
at US$0.50/sqm. So we are assured of the same low
rate until September 3, 2011.
All new companies leasing property space are now paying
US$2.47 or 494% over what we are now paying. By 2010,
all new investors will be paying US$4.10 (or what
the SBMA Board will dictate then) or 820% our current
contract rate ($0.50) now.
|
 |
Gamma-F is willing to assign its rights now, in
favor of an investor who will take over and develop
the property for a 50-year lease extension at
the current property
price rate. |
|
|
|
|
|
|
|
 |
There is a
great opportunity to lock-down the property escalation
price at US$2.47/sqm for a 50-year lease. Gamma-F
Asia is offering to assign its contract rights to
an investor who will finance or capitalize a 50-year
lease at the current rate of US$2.47.
We are offering the investor an opportunity to take
on a 50-year term at the present valued rate of US$2.47/sqm
NOW before the year 2011.
This lock-down opportunity presents the potential
investor with gains as follows:
|
| 1.
He locks in the lease price per square meter and pegs
it at US$2.47/sqm for the next 50 years! |
| 2.
He is guaranteed a no-escalation price on the value
of the property for the next 50 years. 3. He can
develop the land, and sub-lease it as a whole, or
in segments (parcels) to other interested parties,
who can turn the area into commercial establishments.
4. Enjoys tax-exempt status for all his importations
related to his primary business activity that SBMA
approves
5. Pays only 5% gross tax on his income, and this
becomes a final tax.
6. He hedges on the expected property price boom
and inflation for the next 5 decades. By the mid-term
of the 50th year, the expected per square price should
be US$15.50/sqm.
|
|
 |
|
|
|
|
|
|
|
|
|
|
|
|
1. The investor provides an agreement to take over the property,
and finance the 50-year lock-down investment (that has to
be paid in full to SBMA).
|
|
|
|
2. Gamma-F will negotiate with
SBMA to convert the existing lease contract into a 50-year
lock-down contract wherein the full 50- lease amount will
be paid to SBMA in advance.
3. Gamma-F can negotiate for terms wherein the full
amount will be paid in tranches over a period of one year.
4. Gamma-F will provide a development plan to SBMA, and work
towards it getting approved by the Board of Directors.
5. Gamma-F is open to offers for a rights-assignment price
premium. |
 |
|
|
|
If the 50-year lease is negotiated now (before 2011), there
is a savings of $1,250,509.92,
since the rate will be pegged at US$2.47/sqm instead of the
expected US$4.10/sqm after 2010 .
The investor actually gains more than this, since he is protected
against any more escalation for the next 50 years.
|
|
|
|
|
|
|
|
