Participated in a deal negotiation with a foreigner on a long term lease yesterday

Nation building via learning and being the best in business

A cousin requested my presence in an event where:    1.   They will inaugurate a sculpture on top of a building as an attraction   2  where the proponent of a long term lease agreement will come to examine a draft lease contract and where the owners will appraise the proponent of character

This post examined and analyzed the draft:

1.  The property is intestate for probably 30 years or more.    

2.  The surviving heirs want to incorporate;  that can happen only if the EJS has been done

3.  The lease looked low but  the proponent will build the building and may probably increase the market

     value by 100%

4.  The sore point were:   EJS expenses, and the RPT

The negotiator arrived an hour late and learned he was in his 50s and lived for over 50 years in the PHL.  He thought a lot of opportunities in the PHL.  He says he is motivated by the thought he could make things better   He admits Koreans worked hard and are deeply influenced by military training that we should obey and be disciplined.  

After some discussion the unsettled items were:

1.  The amount of rent

2.   The need for EJS prior to the lease signing;   it could be two docs:   1.   a mou   2.   a conditional lease agreement;   Robie promised he can give advance to process the EJS.  We can wait for passage of law to reprieve penalties and interest on the delayed payment of estate taxes

3.  The property tax:  whether they will just pay for the building, or also the land... (The practice is for the commercial and industrial lease, the lessor pays the taxes...    The proponet says they pay for the building permit, mayors permit

The negotiator says he will send draft of the (their own version) lease for the gaps in the current lease agreement draft we examined;

As for the business they are into retail business with 8 branches (franchisee) And the concept is so good that some big stores make about a million a month (This answers my concern for stability) And they have gone to this place for market studies.   They would go for 24 hours service because they see the young people being awake in the wee hours of the morning .  Will depend mostly on foot traffic

They plan to put up 3 buildings with total area of  1,000 sm, and will determine in 3 years if they will put up all of these..

Being consulted for a 25 year lease for as downtown 800sm commercial property

Nation building via learning and being the best in business

A cousin, daughter of favorite uncle who is into food production business, recently consulted me via text.  Because she is a relative, I gave my opinion via text.  Its a 800 sm property near the Municipal Hall, and the 3rd generation would make the decision respond to the deal proposal by a Korean corp:   5 years lease totalling P57,000,000.   or 170.00 /sm per month;   that translates to about P2.28m/year or P190,000.00 /month.  

 Will they make money on the deal?   Is this the best deal for the family?

The big deterrent on the deal is the fact that the property is intestate and the estate tax which include the compromise, interest and the estate tax itself is huge..The zonal valuation is higher now .(Better wait for the new law extending amnesty be passed)

Am awaiting an appointment as biz consultant by the heirs.    To clarify obligations and make a substantive comment guidance on the deal

Evaluating a deal - how much to sell a property

Nation building via learning and being the best in business

In the 1980s, I did a project  - 8 hectare prime property development which we bought from the famous Iloilo family now divesting of their holdings due to family intramurals.  I did not ask for salary or other compensation.    But asked instead for lots as compensation 3 lots -  2 x 400 sm, and one 300+   I could have asked for PHP.  But asked for lots instead to conserve the company cash flow.

The lot then was valued at P300.00 sm...  Now some lots were bought by Jollibee allegedly for P60K for sm...

Now some people are courting the 800 sm property, 3rd lot from the highway lot.   The asking before by the fam was P15,000.  Some are indicating that they would buy at P20,000.   However the lots near the lakefront is at P30,000/sm.  

The price should be near the P30,000 shouldnt it be?     Not P15,000?!!!

Tackling traffic, customs processing as key to improving competitiveness in export import trade

Nation building via learning and being the best in business

I was invited to join a gc of young entrepreneurs.  Its admin is top banker in the PHL who graduated ME from a top university in the PHL.

The main topic in the GC was the import export trade especially at ASEAN.   This is a top emerging opportunity.  China continues to be the source of cheap goods (I was told by a bikemate that he earns 100% on 2 to 3 months in one deal)  Why reinvent the wheel, when everything can be made in China, even custom design!!

However the hindrance (obstacles still despite having efficient logistics system) are:     difficult customs procedure, uncertain traffic rates (mostly under the table) and traffic and tongpats at street corners by TE and policemen.

The other topics were automotive industry -  the emergence of EV.  The structural weakness in the supply chain are the weakness:   repairs, servicing, charging stations financing... And the real estate.  It can only be alive near the industrial estates, processing zones where the workers aggregate.    Not anymore in my opinion as in MM, where real estate is overpriced, overbuilt

How when can we remove this difficulties in doing business (this laws are clawless?)

Ease of Doing Business Act (Anti Red tape law)

Is Pax Silica bad for the Philippines?

Nation building via learning and being the best in business  

Everybody is agog over the Pax Silica project 1,600 hectares in Tarlac City for tech hub presumably for data center locators.   Oppositors  have two issues:   that the data center will need too much water for cooling and it will further disrupt the power situation in Luzon grid, the supply situation all ready thin.

It is to be noted that the players in the AI supply system are numerous:

1.  Power gen -  turbines, cables, transmission tower, gen set, nuclear power, switch gears, nuclear power, bus...

2.  Cooling system -  aircon, water cooling for the chips

The business outside of high tech could be much much bigger than data center itself.    Data center should be better be located at the bottom of lakes or oceans which we have plenty.

Really, we could be missing out in case we just go along with the bandwagon thinking that Data center per se is bad    There are cooling system that are not dependent on fresh water  (How about salt water, the processors do not drink water -  its only for cooling, and there are various ways to cool the computers.   Power gens can be provided by their own locators)

  

By  Leo Cui

Shifting from labor intensive operations to mechanization

Nation building via learning and being the best in business

We have long fostered giving jobs and livelihood to workers as one of the missions of the company.  However, wages have been increased and wages of a worker amounts to 1/4 of a million.   It is going to be a burden soon.

However beginning 2025 we have bought two excavators to mechanize the digging operations    Costs shrink from P2,500 to only P500 if we are mechanized.

We will attempt to mechanize the:    grass cutting opetratins and the soil dumping.    We can buy from Chi na or /Lubao Pampanga