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Monday, June 16, 2014

Megaworld earmarks P230 for capex until 2018

Megaworld Corp has set a P230-billion, five-year warchest for the expansion of all its real estate products across its various township developments in the country.

On the sidelines of the company's 20th listing ceremony, Megaworld senior vice president Jericho P. Go said the condo developer's capital expenditure (capex) until 2018 will be used to beef up its residential, office, hotels, commercial and retail projects as well as its land bank of 300 hectares.

Of the total capex, P40 billion will be earmarked for expansion this year, said Megaworld investor relations officer John Hao. The subsidiary of Alliance Global Group Inc will fund its five-year spending program through internally generated funds and debt issuances.

The total capex excludes the spending program of Megaworld's middle-income arm, Empire East Land Holdings, and affordable housing developer, Suntrust Properties.

"As we continue to break old records and set new trends in the Philippine property market, we are motivated to work even harder to maintain our leadership position as the no. 1 residential condominium developer and BPO office landlord in the country,” said Megaworld chairman Andrew Tan.

Megaworld is set to roll out an average of at least 10 residential projects and six office towers every year. It is also expected to open new commercial spaces in Quezon City, Taguig City, Makati City, Cebu, Iloilo and Davao in the next five years.

Megaworld has allocated P80 billion to develop its townships in Iloilo, Cebu and Davao in the next 10 years.

By 2018, rental income will account for bulk of earnings with a share of 50 percent, up from its current share of 40 percent, while the contribution of residential development will go down to 40-45 percent.

Megaworld is on track to have one million square meters of office space in the next five years, Go said.

"We have more opportunities to pursue. In terms of track record, we have a very good upward," Go said.

A pioneering developer of live-work-play lifestyle concepts, Megaworld introduced this year its newest township in Woodside City, a P35-billion "green" township development along C5 in Pasig City. It also launched Davao Park District, its first township in Mindanao and is positioned to be a central business district.

Aside from building new mixed-use projects, Megaworld has announced the expansion of Eastwood City in Quezon City and The Mactan Newtown in Lapu-Lapu City.

The real estate firm expects earnings to grow by double digits this year, Hao said. The firm's earnings climbed by nearly half to P2.69 billion in the first quarter from P1.81 billion in 2013 on the strength of its property development and leasing businesses, coupled with extraordinary gains.

In the last five years, the company posted a compounded annual growth rate of 18-20 percent.

Megaworld has become the holding firm for Tan's real estate assets following the consolidation of Empire East and Suntrust Properties, allowing the company to capitalize on real estate opportunities and to capture the expected growth momentum of its affiliates.

Megaworld is also acquiring AGI's stake in GERI, paving the way for completion of the consolidation process of all real estate businesses under the Megaworld brand.

- Interaksyon

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