Business

Metro Retail Stores Ink Joint Venture Agreement with Province of Samar

Metro Retail Stores Group Inc. (PSE: MRSGI) has entered into a joint venture agreement with the Province of Samar for the development, construction, and operation of the following: (1) department store and supermarket with one movie theater and with leasable spaces; (2)convention center; (3) government center with business processing outsourcing (BPO) center; (4) transport terminal; and (5) hotel, on a 22,000 sqm parcel of land located at Barangay 07, Poblacion, Catbalogan City. The land is owned by the Province of Samar.

The project shall be composed of two phases, the construction phase and the project implementation phase. The construction phase is targeted to be completed within the following periods from commencement thereof:

1. department store and supermarket (with one movie theater) with leasable spaces, expandable to a community mall—18 to 24 months from turn-over of the property;

2. convention center—8 months from turn-over of the property;

3. government center with BPO center—8 months from turn-over of the property;

4. transport terminal—6 months from turn-over of the property; and,

5. hotel —12 to 18 months (sourcing period) from turn-over of the property.

The implementation phase of the project shall be for a period of thirty years to be reckoned from the start of the commercial operations of the Department Store and Supermarket with one (1) movie theater and with leasable spaces.

The joint venture will generate additional revenues to MRSGI and increase the existing GFA footprint of its stores.

The total project cost necessary to complete the project is estimated to be in the amount of PhP472,904,005.00, to be financed by MRSGI.

To realize and fulfill the project, the Province shall contribute to the joint venture a portion of Lot 151-Part consisting of an area of 22,000 sqm, 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 one movie theater and with 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 the convention center, government center with BPO center, and terminal will be turned over to the Province 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.

Upon expiration of the 30-year period, MRSGI shall turnover to the Province the possession and ownership of the department store and supermarket with one movie theater and with leasable spaces.

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