Prime Orion Properties Inc. plans to more than double the leasable space of crown jewel Tutuban Center in Manila, following the entry of property developer Ayala Land Inc.
Prime Orion chairman Felipe Yap said in an interview following the annual stockholders’ meeting the company planned to use the P5.62-billion proceeds from the investment of Ayala Land to expand Tutuban Center, a retail complex in the shopping district of Divisoria in Tondo, Manila.
Tutuban Center sits on a 20-hectare lot and has a leasable space of 60,000 square meters. The company hopes to double the space in less than three years.
Prime Orion is now in talks with the Transportation Department and the Philippine National Railways to finalize the master plan for the property.
The expansion of Tutuban Center is also expected to increase the property’s current annual leasing income of P400 million and foot traffic by 400,000.
Yap said the expansion would be implemented in stages in order not to disrupt the cash-flow of the retail complex.
Tutuban Center will also be location of the North South Railway Project Transfer Station which will interconnect with the LRT 2 West Station.
Yap said despite the entry of Ayala Land, the market for Tutuban Center would remain the same.
“The concept of Divisoria is still there. But there will be some improvements,” he said.
Shareholders approved Ayala Land’s acquisition of 51.36 percent in Prime Orion for P5.62 billion. Under the agreement, Ayala Land will subscribe to 2.5 billion shares in Prime Orion at P2.25 per share.
The shares to be issued to Ayala Land will come from the increase in the Prime Orion’s authorized capital stock to P7.5 billion from P2.4 billion.
Ayala Land earlier said the acquisition of a majority interest in Prime Orion was aligned with the company’s thrust of expanding its leasing business.
Ayala Land has been expanding its leasing revenues, by building new malls, hotels, resorts and offices in line with its aim to achieve a 50:50 revenue sharing between real estate sales and leasing/recurring revenues.
Ayala Land’s recurring income stood at 44 percent of revenues as of end-June.