Keppel Land Limited (Keppel Land) will strengthen its commercial portfolio in the Philippines by expanding the SM-KL project, its mixed-use development with Phase Two comprising a 42-storey office building and an extension of The Podium, an existing five-storey retail component in the Ortigas central business district (CBD). The total construction cost for Phase Two is S$336 million.
The development of Phase Two is in tandem with Keppel Land’s strategy to actively recycle capital and further expand its commercial portfolio. It follows Keppel Land’s earlier announcement this month on developing a 37-storey office tower in Saigon Centre Phase Two, another mixed-use development in Ho Chi Minh City, Vietnam.
The project is jointly developed by Keppel Land, through Keppel Philippine Properties, and Banco de Oro (BDO), the banking arm of the SM Group. Keppel Philippine Properties holds a 40% stake in the SM-KL project.
To be completed in 2019, the new office tower will offer a net leasable area (NLA) of over 89,000 sm of premium grade office space and will be sited above the retail mall. The expansion of the retail mall will add over 34,000 sm of retail space, bringing the total retail NLA to over 50,000 sm when completed in 2016.
Mr Linson Lim, President (Vietnam and the Philippines), Keppel Land, said, “The Philippines remains an attractive destination for foreign direct investments. Keppel Land is well-positioned to capitalise on these opportunities as we leverage our expertise and experience as a leading office developer to grow its commercial presence in the region.
“We are confident that when the development is fully completed, it will meet the demand for business process outsourcing (BPO) space and prime offices for multinational corporations in Manila.”
Phase One of the project comprises The Podium and an office tower which will house the operations of BDO. The office tower, also 42-storeys tall on top of The Podium, will offer about 70,000 sm of NLA when completed in 2015. The Podium is currently about 90% leased to leading brands including Philip Stein, Diamant, Calvin Klein, Topshop, Dorothy Perkins and Nike.
In October 2013, Moody’s Investor Service upgraded the investment rating of the Philippines from Ba1 to Baa3 with a positive outlook due to the country’s robust economic performance, fiscal and debt consolidation as well as political stability and improved governance. This is expected to boost investment and increase the country’s long-term growth potential.