‘Fruitful and beneficial’: Ayala Land defends UP-Technohub deal
MANILA, Philippines — Ayala Land Inc. on Tuesday defended its lease agreement with the University of the Philippines Diliman and said it welcomes Malacañang’s plan to review the contract.
Presidential spokesperson Salvador Panelo, who is also President Rodrigo Duterte’s chief legal counsel, on Sunday said he wants to “probe” the lease rates of ALI at UP-Ayala Technohub, alleging that the company is paying less than P20 per square meter for 25 years.
Panelo’s remarks sent Ayala Land and Ayala Corp.’s shares tumbling on Monday, dragging the main index which plunged 2.20%.
In a disclosure to the stock exchange, Ayala Land clarified that under the contract, UP will receive a total value of P171 per square meter every month.
“This was derived from P4.23 billion in lease payments and a P6 billion investment for 16 commercial buildings, for a total amount of P10.23 billion, over the life of the 25-year contract,” the property arm of the Ayala group explained.
“After 2033, UP as owner, will receive 100% of the buildings’ rent. UP also continues to own the land which has appreciated in value since the start of the partnership,” it added.
Shares in Ayala Land were down 2.84% as of 3:05 p.m., Tuesday while Ayala Corp. shed 4.60%. The Philippine Stock Exchange index was also in the red.
In 2006, Ayala Land entered into the lease agreement with UP for the development of the UP-Ayala Land Technohub along Commonwealth Avenue. This was after two failed bids and an invitation for a negotiated proposal to nine real estate developers.
“Since the start of operations in 2008, the ALI-UP partnership has created 50,000 jobs in the development,” the company said.
“We believe this development has been fruitful and beneficial for UP, ALI and the community. We welcome a transparent review and assessment of our partnership with UP,” it added.
The Ayala Group is currently involved in a legal tussle with the Duterte administration through its water arm Manila Water Company Inc.
Since December last year, Duterte has berated the Ayala-led utility firm and Maynilad Water Services Inc. and threatened to jail their owners for supposedly forging water contracts with “onerous” provisions.
Analysts and business leaders have warned that the presidential tongue-lashing against some of the country’s biggest companies could turn off foreign investors and would not bode well with the Duterte administration’s eagerness to tap private capital to fund its big-ticket infrastructure projects.
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