Two private equity firms to invest P7B in Clark
MANILA, Philippines – ADM Capital and BPE Asia Real Estate, two major Hong Kong-based private equity firms are investing $150 million (P7.072 billion) to construct 5 office towers in the Clark Freeport Zone.
In a joint statement, both firms announced the closing of an initial US$150-million investment to finance the construction of Grade A office buildings and surrounding infrastructure within the 177-hectare Global Gateway Logistics City (GGLC) in Clark.
The project represents one of the largest investments by foreign investors in the Philippines' real estate sector and is expected to transform Clark Freeport Zone into a new office and logistics hub.
ADM Capital is a fund manager with headquarters in Hong Kong while BPE Asia Real Estate is an affiliate of Baring Private Equity Asia.
The two firms will head a consortium of investors providing the cornerstone capital for the construction of office buildings with gross floor area of 142,000 square meters.
They are expected to meet the need of multinational companies and business process outsourcing (BPO) companies in Central Luzon.
Global Gateway Logistics City
The project, located across The Medical City Clark Hospital, will be the first office buildings constructed on the GGLC site, which when completed, will provide 5.8 million square meters of office, logistics, industrial and supporting retail and hotel space.
KGL Investment Company (KGLI), a Kuwaiti company, is developing GGLC, a master-planned office and logistics district strategically located next to Clark International Airport.
It began the development of the 177-hectare GGLC, with the construction of state-of-the-art The Medical City Clark, which was also co-funded by ADM Capital and BPE Asia.
KGLI said construction of the first phase of office buildings is expected to start in November 2015, with pre-leasing arrangements already underway.
Large locators such as Texas Instruments, Convergys, Samsung and iQor have already established a presence in Clark while other multinational corporations and BPO companies are looking at expanding in the area.
BPOs to thrive in Clark
Clark Freeport, located 80 km north of Metro Manila, has been earmarked by experts to serve as the next hot destination for BPOs, given the large population of skilled workers in Central Luzon and its proximity to the Philippines' capital.
KGLI plans to transform GGLC into a state-of-the-art commercial and logistics aerotropolis. It has a lease on the property for a period of 50 years, with an option to renew for 25 years.
ADM Capital CEO Christopher Botsford and 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," he said.
BPE Asia Managing Director and head of real estate Mark Fogie for his part said that: “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”. – Rappler.com
$1 = P47.15