The project represents one of the largest investments by foreign investors in the Philippine real estate sector and is expected to transform this freeport into a new office and logistics hub.
In a joint statement, ADM Capital and BPE Asia Real Estate, both Hong Kong-based companies, announced the closing of an initial $150 million investment to finance the construction of Grade A office buildings and surrounding infrastructure within the 177-hectare Global Gateway Logistics City (GGLC) here.
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 the Clark International Airport (CIA).
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.
Large locators such as Texas Instruments, Convergys, Samsung and iQor have already established a presence in this freeport 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.
This 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 Philippine capital.
KGLI plans to transform GGLC into a state-of-theart 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 another 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 masterplanned precinct within the Clark Freeport and directly adjacent to the CIA, we foresee the Clark Freeport Zone emerging as a new office and logistics hub for the Philippines,” Williams said.
