PNB Holdings Corporation (PHC), the real estate holding company of Philippine National Bank, intends to redevelop its prime properties in Makati and Pasay to boost rental demand and optimize their revenue potential.
During the firm’s annual stockholders’ meeting, newly-appointed PHC President Karly Tan-Say said the Company will be improving the efficiency of the 10-hectare PNB Financial Center in Pasay and the PNB Makati Center in Ayala’s Central Business District by revamping its gross leasable area.
In her report, Tan-Say said they remain optimistic in the current local business climate.
“While we are cautious of the economic environment, we also remain optimistic that the ongoing vaccine rollout and the health and safety protocols in place will prompt the imminent reopening of the local economy,” she said.
Concurrently the Chief Operating Officer of the Lucio Tan group’s land developer Eton Properties Philippines, Tan-Say said “We are excited on planning for the redevelopment of our properties in Makati and Pasay as we see a very huge growth potential in these areas.”
“We continuously and meticulously find ways to further enhance these developments to better serve the market in the new normal,” she added.
With a positive base of cash flow, PHC expects significant increase from its 2020 net income of P200 million by the end of the year.
PNB will be recording about P34 billion in one time earnings from its windfall from the revaluation of its low-earning but prime real estate assets.
The bank said the amount will be recorded in its books reflecting the difference between the fair value of P46.68 billion and the book value of P12.6 billion of the properties.
“Specifically, the change will be reflected in the Bank’s income statement as of May 28, 2021, thereby further strengthening its financial position as the transaction will generate P10 billion additional capital, after the effect of the property dividends,” PNB said.
PNB had started a series of transactions undertaken to monetize its low-earning assets by exchanging three prime properties with a market value of P46.68 billion, determined by a reliable independent source, for equivalent value in shares of stock of PNB Holdings Corporation (PHC), a wholly owned subsidiary.
Upon completion of the property-for-share swap, the Bank increased its share ownership in PHC.
After this, PNB disclosed a property dividend declaration consisting of 239.35 million of its shares of PHC which resulted in the reduction in the Bank’s total equity in PHC to 49 percent.
PNB said its stockholders can expect to gain from its disposal of low-earning assets through their stake in PNB Holdings Corporation which will be listed at the PSE after being distributed as property dividends.
PNB President Wick Veloso said “We are already doing preparatory work for the listing by way of introduction…the listing is a priority of PNB.”
The bank announced the property dividends as part of its move to recognize and monetize the unrealized value of its three major properties, namely: the PNB Financial Center in Pasay, PNB Makati Center in Ayala’s Central Business District, and the Prime Property at the corner of Buendia Avenue and Paseo De Roxas, also in Makati.