METRO RETAIL Stores Group, Inc. (MRSGI) is teaming up with the Province of Samar for the development of a mixed-use property in the province worth about P472.9 million.
In a disclosure to the stock exchange on Monday, the listed firm said it has entered into a joint venture agreement with the Province of Samar for the development of a 22,000-square meter parcel of land in Barangay 7, Poblacion, Catbalogan City owned by the latter.
Under the agreement, MRSGI will develop, construct, and operate a department store with supermarket, a convention center, government center, transport terminal, and a hotel.
The department store will also house one movie theater and leasable spaces, while the government center will allot spaces for business process outsourcing firms.
Under the deal, MRSGI will finance the entire project which is estimated to cost P472.9 million, while the Province of Samar will contribute the land.
The Gaisano-led firm said the construction period will run from six to 24 months after the property has been turned over by the local government.
Both parties have agreed to share in the monthly gross revenues and gross rent, without value-added tax, from the operation of the department store and supermarket.
MRSGI will turn over the convention center, government center, and terminal to the province upon the completion of construction. All revenues from these properties will belong to the province.
Meanwhile, MRSGI will get a 20% share from the hotel operator’s lease rental payments, with 80% going to the province.
“The joint venture will generate additional revenues to MRSGI and increase the existing GFA footprint of its stores,” the company said.
The company will then turn over the ownership of the department store and leasable spaces to the province after the 30-year period.
MRSGI’s net income attributable went down to P454.93 million in the first nine months of 2018, 17% lower than its earnings of P550.07 million in the same period a year ago. Gross revenues also slumped by seven percent to P22.97 billion.
Shares in MRSGI rose by 3% or nine centavos to close at P3.09 each at the stock exchange on Monday. — Arra B. Francia