Century Properties buys out Mitsubishi Corp. in office tower joint venture

Antonio-led Century Properties Group (CPG) said Tuesday it acquired its joint venture partner Mitsubishi Corp.’s 40% stake in Century City Development II Corporation (CCDCII).

In a disclosure to the Philippine Stock Exchange, CPG said it entered into a buyout transaction with Mitsubishi for the Philippines-based property developer to acquire its Japanese partner’s common shares in CCDCII for P1.9 billion.

In 2015, CPG and Mitsubishi entered into a joint venture deal to form CCDCII, in which the Philippine company owns 60% while its Japanese partners owns 40%.

The buyout transaction was approved by the Philippine Competition Commission on August 11, 2020.

In effect, CCDCII will be a wholly-owned subsidiary of CPG.

With full ownership of the CCDCII, CPG is adding 25,000 square meters of floor area to its commercial leasing portfolio, growing it to 137,000 square meters of gross floor area this year.

The additional leasing space will come from the newly-completed Century Diamond Tower, which was developed jointly by CPG and Mitsubishi. The building is a 41-floor pre-Leadership in Energy and Environmental Design (LEED) certified office building in Century City, Makati.

The tower is also accredited by the Philippine Economic Zone Authority.

This will account for a significant bulk of CPG’s recurring revenues in the coming years, the property developer said.

“This acquisition effectively builds up CPG’s recurring income assets in line with our strategy of growing the company’s high-margin businesses including office leasing. This has proven to be a resilient sector by nature of longer-term leases,” CPG president and CEO Marco Antonio said.

“We thank Mitsubishi Corp. for the trust, the fruitful partnership, and its invaluable support to this project. The completion of Century Diamond Tower is a milestone for CPG as we continue in our step forward to balancing our vertical residential and affordable housing portfolio with commercial leasing assets, while maintaining business resilience under the new normal,” Antonio said.

By TED CORDERO, GMA News

Source: Peso Economics