PNB Holdings Corporation (PHC), the property arm of Lucio Tan’s business group, is reportedly looking to develop a prime Makati City property as it prepares for its planned listing by way of introduction on September 25.
The property company owns an approximately 8,000-square-meter vacant lot at the corner of Gil Puyat Avenue and Paseo de Roxas that has remained undeveloped for decades.
Abacus Securities Corporation said the site could soon be developed, pointing to an environmental filing for a proposed mixed-use project called Legacy Tower.
“It’s not in the prospectus but apparently, there is a live filing for an environmental impact assessment on the EMB [Environmental Management Bureau] website involving a mixed-use project called Legacy Tower,” the brokerage said.
According to Abacus, public scoping for the project was conducted last year, while the proposed development is expected to have a total area of about 155,000 square meters.
The brokerage said PHC may need to partner with another company through a joint venture to undertake the project, potentially reducing its share of the development’s future gains.
Still, Abacus described the property as a significant opportunity that could support PHC’s valuation once it begins trading.
“The company will probably have to find a joint venture (JV) partner for this which dilutes the benefit, but it is a real investment opportunity that could anchor the stock or put a floor to it near the listing price,” Abacus said.
PHC has set an initial reference price of ₱1.20 per share for its listing by way of introduction. The figure is near the lower end of the ₱1.18 to ₱1.89 valuation range indicated in an independent fairness opinion.
Abacus previously noted that the reference price translates to a price-to-earnings ratio of more than 100 times. However, it said the potential redevelopment of the Makati property could provide additional value to the company.
PHC has identified its Buendia (Gil Puyat)-Paseo property as its most redevelopment-ready asset and considers it a key component of its long-term growth plans.
The company is expected to have around 46.93 billion outstanding shares upon listing. Based on the ₱1.20 reference price, PHC would have an indicative market capitalization of approximately ₱56.3 billion.
PHC Chief Financial Officer Ponciano Carreon Jr. said the listing fulfills a commitment made to shareholders following the declaration of a property dividend in 2021.
“The listing of PHC fulfills a commitment we made to shareholders when the property dividend was declared in 2021, providing both liquidity and price discovery for their investment,” Carreon said.
He said the listing would also allow investors to gain exposure to PHC’s portfolio of strategically located properties.
“This presents an opportunity for investors to participate in a company backed by strategically located and irreplaceable real estate assets with significant long-term development potential.”
Aside from the Makati property, PHC’s major Metro Manila assets include the PNB Financial Center in Pasay City and the PNB Makati Center.
COL Financial Group Inc. research analyst Charmaine Co said PHC plans to increase its recurring leasing income while gradually evaluating redevelopment opportunities for its properties.
“PHC plans to strengthen recurring leasing income while exploring phased redevelopment opportunities in commercial, office, retail, hospitality, and luxury real estate, subject to market conditions and regulatory approvals,” Co said.
Co also said the listing could benefit Philippine National Bank (PNB), which owns 48.99% of PHC, by providing a more transparent market-based valuation of its real estate holdings.
“For PNB, which holds 48.99 percent of PHC, the listing could help unlock and provide a clearer market valuation for its real estate holdings.”
At PHC’s projected ₱56.3-billion market capitalization, PNB’s stake would be worth about ₱27.6 billion, equivalent to roughly 23% of PNB’s current ₱119-billion market capitalization.
Co said the move could contribute to PHC’s longer-term value creation, although its immediate effect on PNB’s earnings may remain limited.
“The move may also support longer-term value creation through PHC’s redevelopment plans, although any near-term impact on PNB’s earnings is likely to be limited,” Co said.