Contract inked for transfer of PSE HQ to Global City

The Philippine Stock Exchange and Fort Bonifacio Development Corp. signed yesterday the relocation contract that would transfer the former’s headquarters and trading floor to a donated land at the heart of the Bonifacio Global City in seven years time.

Based on the agreement, FBDC – through a wholly-owned subsidiary – will own a 2,183- square meter parcel of land where the building for the new PSE premises will be put up. The shares of the subsidiary corporation would, in turn, be donated to the PSE in seven equal installments over the seven-year period.

During the seven-year period, FBDC will construct a shell building — costing about P250 million — that the PSE must equip and finish within 18 months, eventually occupying it for at least seven years. While the total period of unrestricted ownership by PSE could reach about 15 and-a-half years, both parties have the option to either accelerate or extend the time frame.

The development time of seven years takes into consideration a three-year period needed to conceptualize and design the PSE facilities, and an estimated four-year period to complete its construction.

The building area for PSE has an estimated gross floor area (GFA) of 12,000 sqm but as developer of the building, FBDC has a "build out option" to increase the GFA by another 12,000 sqm. For an "FBDC area" although separate entrance and exit doors will be provided.

In case FBDC chooses or is unable to construct the building by the end of the fourth year, it will nevertheless continue with the land donation in the form of shares of the subsidiary. In this event, the completed donation will give the PSE total ownership of the subsidiary company, bound only by the condition that it would construct its headquarters and occupy it for five years.

The PSE may also initiate the accelerated completion of the donation by relieving FBDC of its obligation to construct. However, the exercise of this option will require the construction of the facilities to be started by the PSE by itself or with a joint venture partner within one year.

At present, the PSE headquarters are at the Tektite Towers in Ortigas, which, along with the Ayala Towers in Makati, operates, two trading floors under a functional merger scheme. Both properties are similarly donated assets from Philippine Realty Holdings and Ayala Land Inc. whose 10-year deed of restrictions expires in 2004.