A group that includes American real estate mogul Donald Trump is investing as much as $1 billion to develop a high-end leisure facility in Subic, Olongapo City.
The consortium, made up of the Trump Organization, American Westgate Resorts Asia Ltd. and Korean Heung-A Property Group, is spending a fourth of the investment in the first quarter of next year, it said in a statement yesterday.
The group is eyeing a 457-hectare beachfront property in the village of Cawag, where it plans to build hotels, residential villas, retail shops, casinos, educational and medical facilities and a convention center over 10 years.
The Manhattan-based Trump Organization is the main company of Donald Trump, a prominent American real estate developer.
The company oversees nearly all of the business development interests of Mr. Trump, such as real estate, hotels and golf clubs.
The Subic investment is part of a deal signed by the three companies to form a venture that will identify potential investments and development opportunities, including communities, resorts and other real estate projects in Asia.
The first phase of the Philippine project will be led by Heung-A’s wholly owned subsidiary, Subic Neocove Corp., and involves the development of the basic infrastructure and a 54-hole golf course worth $250 million. It is expected to be finished by 2011.
Subic Neocove Chairman Seung Guk Yang told a briefing the project would be different from other leisure projects in the area since it would be targeting long-staying tenants instead of vacationers.
“We are putting [up] medical and wellness facilities and international schools so [clients] can treat this as their second home, which is why we are not calling it a resort but a master plan community,” he said through an interpreter.
Robert N. Aventajado, Neo-cove’s Philippine representative, said the company would co-own the property with local firm Neocove Philippines, instead of leasing it.
Mr. Seung said the firm is aiming for the high-end market from Asia, Europe and the US, which has not been affected too much by the US-led global economic slow-down. He added that once finished, Neocove would be the largest high-end master-planned community in Asia.
A master-planned community is generally distinguished by the number of amenities it offers, and the big land area the community encompasses. Master-planned communities incorporate recreational amenities such as lakes, golf courses and parks with bike paths and jogging trails.
“Our initial foray into the Subic Bay Freeport Zone signals the extreme confidence of various highly funded multinationals with respect to both the near- and long-term economic and investment prospects in the Philippines,” Mr. Seung said in a statement.
Heung-A Director Mitchell Park said the Subic investment would be the first large-scale property project of the company, whose main business is shipbuilding.
He said they had partnered with the Trump Organization and Westgate so it would be easier to tap international capital markets amidst a financial crisis in the US and Europe.
He said the project would be financed by borrowings and equity, but declined to say how much each firm would be contributing.
He said the Trump Organization would serve as the lead developer, with Westgate as co-developer.
Westgate, owned by property developer David A. Siegel, is the largest privately owned time share company in the world and operates 28 resorts in 11 US states.