Plaza Holdings

Jun 14, 2023

At a glance Government Service Insurance System (GSIS) President and General Manager Wick Veloso says the amended contract now encompasses not only the original building site but also "lots 19 and 41" in Pasay City, where the Sofitel Philippine Plaza Manila hotel is located. To recall, GSIS sued Sofitel hotel-owner Philippine Plaza Holdings, Inc. (PPHI) in 2018, claiming that the pension fund's lease agreement only covered lots 30-A and 30-B, and did not include lots 19 and 41. Under the amended agreement, GSIS and PPHI have agreed to treat the entire area as one indivisible unit. The Government Service Insurance System (GSIS) and Philippine Plaza Holdings, Inc. (PPHI) have revised their lease agreement for the land on which the Sofitel Philippine Plaza Manila hotel is situated. In a statement on Wednesday, June 14, Wick Veloso, GSIS president and general manager, said the amended contract now encompasses not only the original building site but also "lots 19 and 41" in Pasay City, where the luxury hotel is located. “This move reflects the commitment of both parties to the hotel's continuous growth and the flourishing local tourism sector,” GSIS said. To recall, GSIS sued PPHI in 2018 at the Pasay City Metropolitan Trial Court, claiming that the pension fund had no lease agreement for lots 19 and 41. These lots were being used by the hotel for valet parking, cistern tanks, a cooling tower, and a tennis court. According to the former management of GSIS, the 25-year lease contract signed in June 2016 only covered lots 30-A and 30-B, situated where the main building of the Sofitel hotel stands. Veloso said the amended agreement, which was initiated on June 26, 2016, is still valid until June 26, 2041, ensuring the Sofitel hotel’s ongoing operations. "Sofitel hotel's success is intrinsically linked to GSIS, as its income will be drawn from the hotel's revenue. By safeguarding GSIS's assets and generating income from these, we can assure our members and pensioners that their benefits will be provided when due," Veloso said. Recognizing the integrity of the leased premises, GSIS said the parties have agreed to treat the entire area as one indivisible unit. However, all alterations or improvements to the premises now require prior written consent from the pension fund. “At the end of the lease period or in case of earlier cancellation, all permanent improvements introduced by PPHI on the building landsite and complementary lots will transfer to GSIS,” the state-run firm said. The updated agreement also includes a dispute resolution clause, outlining a path towards resolution through negotiation, mediation, or arbitration in accordance with the Philippine Dispute Resolution Center, Inc. (PDRCI) arbitration rules. Veloso and PPHI President Esteban Peña Sy have committed to upholding the terms and conditions of the contract and ensuring the continued success of the Sofitel hotel. related stories