Audacious move by Megawide for P10 b investment by Pag ibig in a construction outfit via preferred share

Nation building via learning and being the best in business

We know one of the top execs of Pag ibig, when we manifested our desire 1 year ago to go into 4ph project.     But we found out that it would take P300 m to finish a project before you ever get a take out  So its going to be capital intensive for a developer and most likely he would go into a liquidity hiccup.   No developmental loan.  

However this one bypasses the loan portion because the govt takes an equity, albeit riskier bet on the developer.   Probably this was done to save the 4ph project, a flagship project of PBBM to save the dwindling popularity of the President in the light of many challenges his administration is facing

Since we know the top guns fo the said govt institution we can probably explore the same possibility (follower) and or let PAG IBIG invest in our different ventures.

Evaluation of the newest housing project of the govt.

Looking forward to the future of business

It looked very attractive in the beginning what with the more than P250 billion that is available.  Couple this with the strength of the housing provident fund:    monthly contributions, loan collection

After interviewing a lot of people and reading their manuals, these are the conclusions

1.  The standards are for high rise condo:   40% open space (that means your maximum saleable area is only 40%!  There should be complete amenities

2.   There are price ceilings and margins therefore would be thin.

3.  While the EO 34 discourages developers only big time developers with tons of cash and credit line

      can execute these projects

4.   A lot of cash/equity has to be advanced prior to any release:   1.  Land must be acquired   2.  Full

      land dev.    3.   A tower must be completed, A-1 finish before any release.   For the project we                     envisioned more than P200 million is required.   We better stick to what we are doing where much

     lower cash is required

5.  The housing fund wants beneficiaries to have income.  But those submitted are just like any 4ps beneficiaries.  No job.  

While many investors would think that they can gain much from this program, (since the developers are excluded) it is the reverse.   The private sector would advance the development for this housing program.  While the greatest advantage for the consumers/beneficiaries is the 5% beneficiary. the budget by GAA for this is quite small and will not be enough for the number of units being built this year.   

So no go for us?

      

Its National Housing Month, can we participate as contractors?

Looking forward to the future of business

Its national housing month.  At 11 am today, we are supposed to have a meeting with a senior official of the National Financing Arm for housing who happens to be the relative our partner in construction.

A 4ph housing project in a queen city was suddenly brought before our lap after we met with the executive assistant of a queen city in the north last Wednesday.

Last last last week, we were referring the 4ph program of the said city to a supposed "big time contractor " of land dev company based in Alabang,  Their deal turned sour, and suddenly two projects :   a public market (their public market burned last August) and 4ph were looking for an investor /proponent     Their proponent for the public market passed away.

For their 4ph, the proponent could not push through with land acquisition. They were promised P70 m for the land acquistiion under SHFCI  (Its head F. laxa is an acquaintance)  The 4ph is  signal project of PBBM to address the 6million housing backlog, for which P250B of the Pag ibig program was allocated.

Federico Laxa - CEO SHFCI

We have several questions for the 4ph:

1.  Are we qualified for the program?

2.  Shall the take outs be from us?

3.  Can the funder provide a credit line of P1.5m x 2,000 beneficiary?

4.  Will the take outs be fast and efficient (it was not before)

Since the senior officer is from our place (he is a deputy CEO) maybe we can get favorble reply

.   

 

More business opportunities - public market and 4ph

Looking forward to the future of business

This post introduced a broker/agent to the principals (EA of a major in major city in Region 1)  However the agent and his principal carelessly dropped the same by negotiating over the phone and advancing a crazy deal.   They did not examine the opportunities by crashing head on with their offer which the party from the north promptly dropped.  These were about a public market venture (their market just burned down) and 4ph (which the principal agent were looking for.

The market deal:      It involved an almost one hectare property and can be built on 2- 3 storey configuration and revenues can come from monthly rent, parking and rights.   The revenue can amount to 

(at 800 estiated locators )   P80M for rights, over P300 m in parking fees and P1,600M in rental for the next 30 years.  Rent will be at P32/sm.  

The housing 4ph  They have a ready package good for 2,000 beneficiary, on 4.7 hectare property.  While I though this was on public land, contractors have to obtain the site.  I will cost 77 million, for a site near the center of the city.   27 sm, 4 storey,   Cost not more than P30,000 sm, selling price not more than 42,000 sm.   The estimated Gp here is P300 - 400m.

The principal whom we talked last Friday, who did not do their computations are frantic in running after these deals, But the principals from the north would not like to do anything with them anymore    They would like us to do this for them.  We have in business for more than 20 years. 

This is on top of a memorial park we are about to buy and 3 hectare expansion of the exisiting project we have.

Business opportunities or telenovela series on Quadcomm hearings

Looking forward to the future of business

During ther past several weeks much of the time of this post was spent on watching the new telenovela series:    prosecutor like grilling of political personalites, alleged romantic relationship between former Pres and GM of a charity office, killings in a jail, link between police characters and informants.  I realized that they were not paying for my meals, but they were getting free ones, and were probably bribed big money to do this hearings. 

So I made an inspection trip and on the side tried to look for opportunities.  And opportunities there were.  This office brought a long a business and real estate agent who represented two friends:   one a solar senior officer, and other one a seruveying quantity firm making forages into real estate ventures.  We could be agents, brokers, consultants. to the following:

     RE

    1.  Prospective solar farms for sale or lease

   

         1. We can broker the project

         2.  Flip -  take a position on the land, and resell the propert y at a higher price once a deal goes

                         on

         3.  Permanent ownership -  buy the land, lease it, for say 5 years, with % increase on the 6th year

              and take equity on the lessor, participate on the RE

     2.  RE company for sale.   Onwers are quarelling.

     3.  Cooperative seeking funder, and/or builder of minihyrdro.

  Real Estate:

    1.  A city whose public market burned is willing to give a lease contract on a developer who

         can rebuild its project

   2.  Solar farm 100 hectares for sale

   3.  Eco zone looking for an operator.

   4.  Citylooking for a builder in the   4ph program program.  

      P250 b allocated for this via PAG IBIG  DHSUD through Sec Acuzar will spearhead the project  

      (teh LGU will provide the inventory of public lands for such housiing, and apply for developmental 

      land of the site.    The 4ph is contaiend in EO 648

The agent has a principlal who is going to this govt project.   It is not clear whether they  can build, finance  the project.   Or willing to get their hands dirtied.  

The opportuntity for RE is $66 billion, or P3.696 trillion pesos, for 40ph is  Php 250 billion.  Thousands of job would be made advailable,  say 10,000 plus the multplier effect   (4 trillion x 10  =  P40 trillion in additional GDP.  Thats a lot