PCC approves Manila Bay land reclamation project joint venture
The Philippine Competition Commission (PCC), in an official decision released last September 26 2019, has finally given the go signal for the formation of the joint venture between the Dennis Uy led Pasay Harbor City Corp. and the Pasay City local government. The antitrust body was the final hurdle that the joint venture needed to clear in order to proceed with the proposed 265 hectare Manila Bay land reclamation project in Pasay City (SEE: PCC approves Pasay JV with Dennis Uy group, The Business World Online). The project is expected to be worth approximately ₱62 billion pesos and seeks to take advantage of the growing demand for real estate property along the bay area.
The deal between Pasay City’s local government and Dennis Uy’s Pasay Harbor City Corp
The deal between Pasay City’s local government and Dennis Uy’s Pasay Harbor City consortium was initially announced way back in the last quarter of 2017. Under their agreement, the city government will provide the rights to reclaim a portion of the Manila Bay within its municipal jurisdiction. In return, the Pasay Harbor City Corporation — which is actually a consortium between Dennis Uy’s holding company Udenna Corp. and China Harbour Engineering Co. — will commit to finance the entire ₱62 billion reclamation and construction project.
Unfortunately, the project has been delayed in the past two years due to several legal setbacks. For one, this joint venture is the first of its kind as no other city government has ever entered into a joint venture with a private corporation in the past. As such, the approval by the Philippine Competition Commission is a much welcome development. According to the PCC, “the deal between Pasay Harbor City Corp. and the Pasay City government will not likely lead to a substantial decrease of competition in the relevant market.” In fact, quite the opposite is true. The joint venture is expected to significantly expand the real estate market in the National Capital Region.
Now — after two long years of waiting, it seems that the 265 hectare Manila Bay land reclamation project will finally be on its way.
Effects on the real estate market in the Bay Area
In the past few years, there has been a recent surge in demand for prime real estate property within the vicinity of Manila Bay as evidenced by the rise in property prices and rentals in the area (SEE: The Country’s Own Bay Area, PropertyAccess). This growth in demand has mainly been driven by the country’s rapidly growing economy, along with the new entry of Philippine Offshore Gaming Operators into the market (SEE: POGO: A Major Driver of the PH Real Estate Market, PropertyAccess).
The combination of the rapidly increasing demand along with the scarcity of the supply of available land in the area has led property value and rental prices in the Bay Area to skyrocket. Currently, land in the Bay Area sells for as high as ₱300,000 per square meter — putting it almost at par with the Makati Central Business District and Bonifacio Global City (SEE: NCR land prices push firms to eye regions, The Manila Times).
Dennis Uy is looking to capitalize on these recent developments through its joint venture with the Pasay City government. Their joint project would add almost 265 hectares — or 2.65 million square meters — of land to the supply in the Bay Area. At the prevailing land prices in the area, this new land mass would be worth almost ₱800 trillion — which would be split evenly between the Pasay City Government and the Pasay Harbor City Corp.