SM nears buy-in in dorm builder

MANILA, Philippines – SM Investments Corp. (SMIC) hopes to close its acquisition of a minority stake in dormitory builder MyTown this year.

SMIC chief finance officer Jose Sio said the transaction was still pending the approval of the Philippine Competition Commission (PCC).

Sio said the company would enter as a strategic investor, enticed by the concept of MyTown.

“It’s a new idea. It’s a new business. It’s a real property business,” Sio said.

Sio said SMIC opted not to acquire a majority stake because the group would not be managing the dormitory business.

Mergers and acquisitions amounting to more than P1 billion need the approval of the PCC.

“I don’t see any problem (in getting the approval). My estimate is two to three months,” Sio said.

He expressed hope it could be closed sooner, possibly within a month, similar to the processes in China, Thailand and Indonesia.

 “It should be only one month especially if the transaction is not that big,” he said.

MyTown is a dormitory builder backed by Mark Mobius’ Templeton Emerging Markets Group and Ayala-led BPI Capital Corp.

The company behind MyTown is Philippines Urban Living Solutions Inc. (PULS), which was formally established in 2012 as the first Philippine company that specializes in building 10- to 20-square meter affordable units, rented out near Metro Manila central business districts, specially catering to the underserved young professional demographic.

At present, it operates at least five projects with over 1,000 beds and is constructing an additional five projects that can house an additional 1,400 beds.

The target is to utilize and expand its land bank to reach 6,000 beds by 2018.

 The dormitory units come in four configurations, with each fully furnished with toilet and bath, kitchenette, a desk and smart bunk beds with ergonomic provisions.

Other amenities in MyTown buildings include a movie theater, game rooms, KTV rooms and a roof deck. Monthly rental starts at P4,800.

The target market groups are young professionals and BPO employees working in the country’s business districts who do not want to go through the daily traffic to and from their workplace.

In December 2015, Franklin Templeton, through the Templeton Strategic Emerging Markets Fund IV LDC along with BPI Capital Corp. invested in PULS using convertible notes.