#SwabeLang: Metro Retail Stores Group, Inc (PSE: MRSGI), one of the leading retailers in the country with a market leading position in Visayas and a growing presence in Luzon, has just entered into a Joint Venture Agreement with Samar Provincial Government for the development, construction, and operation of the following projects on a 22,000 sq.m, more or less, parcel of land located at Barangay 07, Poblacion, Catbalogan City, owned by the Province of Samar:
- a department store and supermarket with a movie theater and leasable spaces;
- a convention center;
- a government center with business processing outsourcing (BPO) center;
- a transport terminal; and,
- a hotel
The joint project shall be composed of two (2) phases — the construction phase and the project implementation phase. The construction phase is targeted to be completed within the following periods from commencement thereof:
- department store and supermarket with a movie theater and leasable spaces, expandable to a community mall – 18 to 24 months from turnover of the property;
- convention center – 8 months from turnover of the property;
- government center with BPO center – 8 months from turnover of the property;
- transport terminal -6 months from turnover of the property; and the
- hotel – 12 to 18 months (sourcing period) from turnover of the property.
The implementation phase of the project shall be for a period of thirty (30) years to be reckoned from the start of the commercial operations of the department store and supermarket with a movie theater and leasable spaces.
Accordingly, the transaction including the benefits which are expected to be accrued to the issuer as a result of the transaction itself revolves around the rationale that the said joint venture will generate additional revenues to MRSGI and increase the existing GFA footprint of its stores.
Equally important, the total project cost necessary to complete the project is estimated to be in the amount of four hundred seventy two million, nine hundred four thousand and five pesos (PHP 472,904,005.00) as to be financed by MRSGI.
To realize and fulfill the project, Samar provincial government shall contribute to the joint venture a portion of Lot 151-Part consisting of an area of 22,000 sq.m., more or less, covered by Certificate of Title No. 29 and Tax Declaration No. 01-0007-00715, located at Barangay 07, Poblacion, Catbalogan City, Samar, for which the aforementioned project components will be constructed and established.
The parties have agreed to share in the monthly gross revenues and gross rent, without VAT, from the operation of the department store and supermarket with a movie theater and leasable spaces.
All revenues to be derived from the operation of the convention center, government center with BPO center, and terminal will belong to the province. The possession and ownership of which will be turned over to the provincial government after completion of construction.
As for the operation of the hotel, MRSGI will get 20% share from hotel operator’s lease rental payments, while the province will get 80% share from hotel operator’s lease rental payments [source: PSE Edge]
Metro Retail Stores Group, Inc. is a Philippine publicly-listed company engaged in the business of buying, selling, and trading of goods, wares, and merchandise of all kinds, targeting low to middle-income consumers.
It caters the public through its three complementary retail formats – a supermarket format operated under Metro Supermarket and Metro Fresh N Easy brands, a department store format under Gaisano Metro Department Store and Supermarket brands, and a hypermarket format under the Super Metro brand.
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