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Philrealty buys affiliate’s assets to increase recurring income

PHILIPPINE Realty and Holdings Corp. (Philrealty) said it has acquired some assets of its insurance unit in exchange for shares as it tries to increase its recurring income. The property developer also expressed plans to purchase a property in Baguio City.

The company said, in its disclosure to the Philippine Stock Exchange, it plans to acquire the properties of Meridian Assurance Corp., which owns condominium units that has a total value of P84.24 million. Philrealty said it expects a rental income of about P3 million per year from the purchase.

The company added it will exchange the said properties for some 135.87 million shares of Philrealty at a price of P0.62 per share, or about the same as its last traded price of P0.65 per share. Philrealty said the shares will be taken from its unissued shares. “The price is computed as the rounded-off average [actual being 0.62 per share] of the company’s stock price for the 90-day period of January 25 to April 21, 2017,” it said.

Meridian Assurance, an affiliate of Philrealty, is duly-licensed by the Insurance Commission to write various lines of general or nonlife insurance. The company has been an active player in the Philippine insurance industry and has been in operation for 55 years, having been incorporated in 1960.

Meanwhile, Philrealty said it also submitted its bid of P300.5 million, or at P18,598 per square meter, for the El Retiro property in Baguio.

The land consists of six contiguous lots containing an aggregate area of 16,158 sq m, the company said. “The property is composed of land and improvements and is located within the vicinity of Baguio City landmarks, such as the Mansion House, Wright Park and Mines View Park,” Philrealty said.

Earlier this year, Philrealty, a boutique property developer felled by the Asian financial crisis, came out of court rehabilitation proceedings.

The company has been known for its premium projects in the 1990s, which it claimed to be used as benchmark for luxury residential, innovative retail and high end office developments.

Previous projects include Tektite Towers, El Pueblo, The Alexandra and La Isla.

In 2015 the company announced its diversification strategy in its business to include power, health care and education, in a move to weather the real-estate business cycle.

It formed a power unit called Sultan’s Power Inc. and was in talks to buy a company that turns garbage plastics into petroleum that will be then sold to power plants.

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