Cebu-based Metro Retail Stores Group, Inc. (MRSGI) has signed a joint venture agreement with the Province of Samar for the development, construction and operation of a mixed-used complex in Catbalogan City.
Catbalogan, a 5th-class city with a population of 103,879 (2015), is the capital and commercial hub of Samar province.
In a statement to the Philippine Stock Exchange, MRSGI said it entered into a joint venture agreement with the Samar provincial government on Monday, February 18, 2019.
MRSGI is the publicly held retail arm of the Gaisano-owned Vicsal Development Corporation and the company behind the brands Metro, Super Metro and Metro Fresh N’ Easy.
The project, estimated to cost P472.9 million, will consist of: department store and supermarket with one movie theater and leasable spaces; convention center; government center with business process outsourcing (BPO) spaces; hotel; and transport terminal.
It will rise on a 22,000-square-meter (2.2 hectares) property owned by the Province of Samar in Barangay 07, Poblacion, Catbalogan City.
MRSGI said its board of directors approved the project on March 16, 2018.
Under the agreement, MRSGI will finance the entire project and operate the retail component (department store and supermarket with theater and leasable spaces) for 30 years, after which all facilities would be turned over to the Province of Samar.
The other facilities - convention center, government center and BPO facilities, hotel and transport terminal - will be turned over to the Province upon completion.
MRSGI and the provincial government have agreed to share the monthly gross revenues and gross rent, without value added tax (VAT), from the operation of the department store and supermarket, movie theater and leasable spaces.
All revenues from the other facilities, except the hotel, will go to the provincial government.
The hotel will be leased out. The provincial government will get 80% of all rental payments while MRSGI will get 20%.
Based on its construction timetable, the terminal is expected to be finished six months after Samar turns over the property to MRSGI; the convention and government/BPO centers after eight months; the hotel after 12 to 18 months; and the retail areas after 18 to 24 months.
As of November 2018, MRSGI said it has a total of 51 stores in the Visayas, Central Luzon, Metro Manila and southern Luzon. A Super Metro Hypermarket is under construction in Baybay, Leyte while construction of a new department store out of the fire-hit building in Metro Ayala Center Cebu is ongoing.
The company reported a net profit of P454 million in the first nine months of 2018, a 17% decline year-on-year mainly due to the January 5, 2018 fire that gutted the upper floors of the Metro building in Ayala Center Cebu.
As of 11:40 a.m. of February 19, Metro shares were trading at P3.09 apiece, unchanged from the P3.09 close on February 18. (Ventures Cebu)