DISBELIEF was the first reaction of commentators to the exceptionally high price paid by the Metro Pacific co-led consortium for rights to develop the sprawling Fort Bonifacio site in Manila last week. Shocked gasps echoed around the auction room as the 20-strong consortium tendered 39.17 billion pesos (about HK$12.34 billion) for the 214-hectare former military base. This was more than triple the 1.18 billion pesos minimum price set by the Philippine Government's Bases Conversion Development Authority and 31 per cent higher than the second-place bid. But Metro, the 40 per cent-owned Philippine flagship of Hong Kong's First Pacific group, still reckons it has a bargain. If the estimated development and project financing costs are added to what Metro and Co paid per square metre and compared with how much completed property fetches in the neighbouring Makati district of Manila, a pretty attractive profit presents itself. The price the Metro consortium paid the Philippines Government for joint venture development rights works out at 33,000 pesos per square metre. Since only 60 per cent of the land will be available for resale (the remaining 40 per cent is designated for open space), the real cost works out around 55,000 pesos per sq metre, according to Metro executive director Seumas Gallacher's calculations. If the typical Manila development costs of between 1,800 and 2,500 pesos per sq metre are added on, the total cost works out to about 57,500 pesos a sq metre, excluding financing costs. Makati financial district, which is adjacent to the Fort Bonifacio site and boasts the highest real estate prices in the country, comprises 70 per cent commercial and 30 per cent residential property. Prime office space in Makati fetches about 100,000 pesos to 120,000 pesos per sq metre and residential space about 25,000 pesos a sq metre. This produces an average of 77,500 pesos per sq metre for property in general, calculated on a weighted basis. That already makes for roughly a profit of 20,000 pesos per sq metre, or 30 to 35 per cent, for Metro consortium at existing prices. Given that fetching prices for prime property in Manila will no doubt rise over the next few years, the Metro grouping could end up walking away with an even greater windfall by the time its finished product comes on stream.