CLARK FREEPORT—Some $150 million will be invested by two Asian private equity firms to construct five office towers here.
The project represents one of the largest investments by foreign investors in the Philippine real-estate sector, and is expected to transform this free port into a new office and logistics hub.
In a joint statement, ADM Capital and BPE Asia Real Estate, both Hong Kong-based companies, announced an initial $150-million investment to finance the construction of prime office buildings and surrounding infrastructure within the 177-hectare Global Gateway Logistics City (GGLC) here.
ADM Capital is a fund-management company with headquarters in Hong Kong, while BPE Asia Real Estate is an affiliate of Baring Private Equity Asia, which also has an office in Hong Kong.
ADM Capital and BPE Asia are leading a consortium of investors providing the cornerstone capital for the construction of office buildings with gross floor area of 142,000 square meters expected to meet the need of multinational companies and business-process outsourcing (BPO) companies in Central Luzon.
The project, across The Medical City Clark Hospital, will be the first office building constructed on the GGLC site, which when completed, will provide 5.8 million sq m of office, logistics, industrial and supporting retail and hotel space.
KGL Investment Co. (KGLI), a Kuwaiti company, is developing GGLC, a well-designed and master-planned office and logistics district strategically located next to the Clark International Airport.
KGLI started the development of the 177-hectare GGLC, with the construction of state-of-the-art The Medical City Clark, which was also cofunded by ADM Capital and BPE Asia.
KGLI said construction of the first phase of office buildings is expected to start this month, with preleasing arrangements already underway.
Large locators, such as Texas Instruments, Convergys, Samsung and iQor, have already established a presence in this free port, while other multinational corporations and BPO companies are looking at expanding in the area.
The Philippines has emerged as one of the fastest-growing real-estate markets in Asia, powered by the expansion of the BPO and outsourcing sector. The Philippines is considered the contact-center capital of the world and is the second-largest BPO outsourcing destination globally, next to India.
This free port located 80 kilometers north of Metro Manila, is well positioned to thrive as a BPO and logistics hub, given the large population of skilled workers in Central Luzon and its proximity to the Philippine capital. KGLI plans to transform GGLC into a state-of-the-art commercial and logistics “aerotropolis” built to the highest environmental standards. KGLI has a lease on the property for a period of 50 years, with an option to renew for another 25 years.
ADM Capital CEO Christopher Botsford and BPE Asia Managing Director and head of real estate Mark Fogie said the investment is expected to provide high-quality office space in Clark in support of the area’s economic development. “We have been involved with KGLI on the GGLC site for some time, having funded The Medical City building, and are pleased to continue working with KGLI in the construction of their office buildings within the park, bringing much-needed high-quality office space to the Clark area,” Botsford said.
Fogie said the strong demand for office space in Metro Manila has resulted in high occupancy and rising rental costs, leading existing tenants and new entrants to look at secondary markets such as Cebu and Clark.
“The Clark area is well-positioned to thrive, given good accessibility and rents that are approximately half that of Metro Manila. With our own development and construction expertise in-house, BPE Asia looks forward to working closely with KGLI to deliver this high-quality project,” Fogie said.