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Saturday, August 24, 2019

2 Hong Kong-based firms to invest US$150-M in Clark Freeport

CLARK FREEPORT -- Two major Asian private equity firms are investing US$150-million to construct five office towers inside this Freeport.

The project, which will be implemented by ADM Capital and BPE Asia Real Estate, is one of the largest investments by foreign investors in the Philippines' real estate sector.

In a joint statement, the two Hong Kong-based companies stated that they will infuse an initial US$150-million investment to finance the construction of "Grade A" office buildings and surrounding infrastructure within the 177-hectare Global Gateway Logistics City (GGLC).

ADM Capital is a fund manager with headquarters in Hong Kong while BPE Asia Real Estate is an affiliate of Baring Private Equity Asia, which also has an office in Hong Kong.

ADM Capital and BPE Asia are leading a consortium of investors providing the cornerstone capital for the construction of office buildings with gross floor area of 142,000 square meters that are expected to meet the need of multinational companies and business process outsourcing (BPO) companies in Central Luzon.

The project, located across The Medical City Clark Hospital, will be the first office buildings constructed on the GGLC site, which when completed, will provide 5.8 million square meters of office, logistics, industrial and supporting retail and hotel space.

KGL Investment Company (KGLI), a Kuwaiti company, is developing GGLC, a well-designed and master-planned office and logistics district strategically located next to Clark International Airport. KGLI started the development of the 177-hectare GGLC, with the construction of state-of-the-art The Medical City Clark, which was also co-funded by ADM Capital and BPE Asia.

KGLI said construction of the first phase of office buildings is expected to start in November 2015, with pre-leasing arrangement already underway. Large locators such as Texas Instruments, Convergys, Samsung and iQor have already established a presence in Clark while other multinational corporations and BPO companies are looking at expanding in the area.

The Philippines has emerged as one of the fastest growing real estate markets in Asia, powered by the expansion of the BPO and outsourcing sector. The Philippines is considered the contact center capital of the world and is the second largest BPO outsourcing destination globally, next to India.

Clark Freeport, located 80 kilometers north of Metro Manila, is well positioned to thrive as a BPO and logistics hub, given the large population of skilled workers in Central Luzon and its proximity to the Philippines' capital.

KGLI plans to transform GGLC into a state-of-the-art commercial and logistics aerotropolis built to the highest environmental standards. KGLI has a lease on the property for a period of 50 years, with an option to renew for 25 years.

ADM Capital CEO Christopher Botsford and BPE Asia Managing Director and head of real estate Mark Fogie said the investment is expected to provide high-quality office space in Clark in support of the area's economic development.

"We have been involved with KGLI on the GGLC site for some time, having funded The Medical City building and are pleased to continue working with KGLI in the construction of their office buildings within the park, bringing much needed high-quality office space to the Clark area," Botsford said.

Fogie said the strong demand for office space in Metro Manila has resulted in high occupancy and rising rental costs, leading existing tenants and new entrants to look at secondary markets such as Cebu and Clark.

"The Clark area is well-positioned to thrive, given good accessibility and rents that are approximately half that of Metro Manila. With our own development and construction expertise in-house, BPE Asia looks forward to working closely with KGLI to deliver this high-quality project," Fogie said.

KGLI Asia CEO Mark Williams said the investment by ADM and BPE Asia represents an exciting new phase of development of the GGLC site.

“We are looking forward to working with ADM and BPE Asia in what is an exciting new phase of development of the GGLC site. Office buildings in the greater Clark region generally are of inferior quality to buildings in Manila and with the addition of new high quality office space located in a well-designed master planned precinct within the Clark Freeport Zone and directly adjacent to the Clark International Airport, we foresee the Clark Freeport Zone emerging as a new office and logistics hub for the Philippines,” Williams said.

ADM Capital has over 17 years of unparalleled experience in private credit and special situation financing in Asia, and has developed a deep local knowledge, proprietary sourcing network and strong relationships with the world’s leading institutional investors. The firm has approximately US$1.2-billion in assets under management, across private credit and private equity, invested globally in over 15 countries via a 52 member team operating out of six offices in Hong Kong, Istanbul, Mumbai, London, Kiev and Almaty. In 2015, ADM Capital has invested in an array of sectors including agriculture, real estate, travel and tourism among others, across various countries in the Asia Pacific region including Australia, New Zealand, China, Thailand and Philippines.

Baring Asia is one of the largest and most established independent alternative investment managers in Asia and advises funds that manage more than US$9-billion in committed capital. The firm’s funds operate a pan-Asian investment program, across private equity and private real estate throughout the Asia-pacific region. The firm has been investing in Asia since its formation in 1997 and has over 120 employees located across seven offices in Hong Kong, Shanghai, Beijing, Mumbai, Singapore, Jakarta and Tokyo.

KGLI is an investment management firm specializing in private equity investments in emerging markets.

The company has assets under management in excess of US$500 million comprising investments in infrastructure, logistics, oil and gas, real estate and other diversified sectors, primarily in fast-growing regions in Asia and the Middle East.

Among the company’s products is The Port Fund (TPF), a private equity fund established in 2007 that is ranked in the top quartile of its universe of funds. KGLI is based in Kuwait and has regional headquarters in the Philippines.
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