The legendary luxury hotel, Sofitel Philippine Plaza Manila, is about to undergo a remarkable transformation. The Government Service Insurance System (GSIS), a state-run pension fund, is poised to become a strategic player in President Marcos’ ambitious “Build Better More” infrastructure program. At the same time, this partnership will free up funds for the much-needed modernization of the historic hotel.
Under the proposed agreement, the GSIS would exchange its future income as the hotel’s landlord for shares in the offshore development arm of Kajima Corp., the Japanese owner of Sofitel, and its Hong Kong-based partner, Allied Properties. GSIS President Wick Veloso discussed this potential arrangement in an interview with Inquirer, highlighting the vision of incorporating the long-term lease value into equity with their foreign partners.
The President of Philippine Plaza Holdings Inc. (PPHI), Esteban Pena Sy, emphasized the urgent need for a major renovation of the hotel as it approaches its 50th anniversary. With the loss of its beachfront due to the Manila Bay reclamation project, it is crucial for the hotel to undergo significant upgrades to remain competitive. Sy mentioned plans to replace outdated infrastructure, such as pipes, cooling systems, windows, elevators, and escalators, while enhancing the overall aesthetic appeal.
Sy commended GSIS President Veloso for his reasonable and open-minded approach, indicating that the GSIS has proposed capitalizing the income for several years and investing it in their foreign mother company—a suggestion that Sy finds favorable.
This potential collaboration comes after a contract amendment between GSIS and PPHI, which solidified the inclusion of the hotel’s original building, landsite, and previously disputed complementary lots. This clarification ensures the hotel’s ongoing operations in the Pasay City area, where it occupies a vast five-hectare space.
According to Sy, Sofitel has been one of GSIS’s top-performing assets, consistently generating substantial rental income based on a percentage of gross revenue. PPHI’s monthly payments to GSIS range from over P10 million to as high as P18 to P19 million during peak seasons like December.
In summary, the GSIS’s proposed partnership with the offshore development arm of Sofitel’s owners presents an exciting opportunity for the iconic hotel’s much-needed revitalization. The collaboration showcases the GSIS’s commitment to President Marcos’ infrastructure program while ensuring the hotel’s continued success in the competitive hospitality industry.
Denial of responsibility! SamacharCentrl is an automatic aggregator of Global media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, and all materials to their authors. For any complaint, please reach us at – [email protected]. We will take necessary action within 24 hours.
Omprakash Tiwary is a business writer who delves into the intricacies of the corporate world. With a focus on finance and economic landscape. He offers readers valuable insights into market trends, entrepreneurship, and economic developments.