BIZ BUZZ: Invisible gold mine: BGC airspace for sale

Aside from intellectual property, which intangible asset can unlock values at a premium as hefty as what real estate can command?

The airspace above sprawling low-rise developments at former military camp Bonifacio Global City (BGC), that is. There’s a burgeoning market for the trading of this invisible asset.

Every piece of land within BGC has a height allotment based on the master plan. However, there are structures that didn’t maximize the height limit upon construction, such as Ayala Land’s Serendra or International School Manila, that owners don’t intend to tear down or modify vertically in the foreseeable future. Based on existing agreements, that airspace must revert to the Bases Conversion and Development Authority (BCDA), which in turn can sell the right to developers intending to build taller restructures but are restricted by designated floor area ratio (FAR) at their current locations.

Conglomerate GT Capital, which owns Federal Land, is one example. The Ty family-led group wants to tear down the existing Lexus showroom to build a new high-rise residential complex in the same row as Grand Hyatt Hotel, currently the tallest structure in BGC.

“The problem is there’s scarcity in designated FAR there. Now that they want to change it, they need to apply … and they need to buy (airspace),” BCDA president Joshua Bingcang told Biz Buzz.

At current values, Bingcang estimated that BGC airspace could be monetized for around P60,000 to P70,000 per square meter (sq m). The GT Capital/Federal Land group sent feelers that they need around 60,000 sq m, which means that for that space above Lexus alone, BCDA can raise at least P3.6 billion. “Para na din akong nagbenta ng lupa (It’s almost like I’ve sold a parcel of land),” said Bingcang.

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Counting all the underutilized airspace in this bustling central business district, we gather than BCDA is sitting on an invisible gold mine worth about P100 billion! After all, only Grand Hyatt and Shangri-La BGC have maximized the 250-meter height limit.

Of course, release to the market of additional BGC airspace will have to be staggered to avoid a glut, and allow the state to unlock even better valuations in the future.