Posted on June 16, 2014 10:17:42 PM [
BusinessWorld Online ]
By Daphne J. Magturo
MEGAWORLD Corp., the flagship unit of
property developer Andrew L. Tan’s Alliance Global Group, Inc., said it will
invest P230 billion over the next five years to help meet its aggressive
expansion targets.
Megaworld Senior Vice-President Jericho P. Go, speaking to reporters
yesterday after marking the company’s 20th anniversary as a listed company,
said the company’s market capitalization has grown by more than 55 times to
P150 billion, from P2.7 billion when it listed in June 1994.
He added that the P230-billion capital
expenditure (capex) will be allocated to residential, office, hotels,
commercial and retail projects in its various townships, as well as for land
banking, to support plans to launch an average of 10 residential projects and
six office towers every year.
“We are definitely on track to
reaching one million square meters (sq.m.) of office space inventory within
five years,” Mr. Go said. “By the end of this year, we will have 712,000 sq.m.
[of land bank], so on an average, we are adding a minimum of 100,000 sq.m. per
year.”
Harold Geronimo, director for the
Strategic Marketing and Communications Group, said the firm company averaged
P20 billion to P30 billion in capex yearly over the last five years.
By way of contrast, Director for
Investor Relations John Hao said this year’s capital expenditure will hit P40
billion, from P35 billion in 2013 and P24 billion each for 2012 and 2011.
Mr. Go said a “huge part” of the
five-year capex will be internally generated.
“Aside from the internally generated
funds, we might pursue some debt raising as we still have room to increase our
leverage. I think we are the only property company in a net cash position,” Mr.
Hao said.
“We made some brokerage firms do a
survey in terms of the amount of space being generated by various developers and
we continue to be the largest and the number one BPO (business process
outsourcing) landlord and developer in the Philippines,” Mr. Go said.
The company expects the net profit
contribution of office space to rise to 50% from 40% and the share of residential
properties to fall to 45% from 50%.
Mr. Go also allayed fears of possible
“congestion” in the BPO market.
“There is no congestion in the BPO
market. There is no slowdown. We have very good demand and we are accelerating
our office and BPO projects,” he said.
The company is also expanding outside
Metro Manila, and Mr. Go said the projects in the provinces will have a “fair
share” of the budget allocation.
“For the next 10 years, we’re spending
P80 billion for the township in Iloilo, Cebu and Davao,” Mr. Geronimo added.
The company’s global sales offices
have noted strong demand particularly from the United Kingdom, “because of the
purchasing power,” as well as from Singapore, Italy, the United States, Canada,
Spain, Japan, Ireland, Kuwait, the United Arab Emirates, Qatar, Saudi Arabia,
and Oman.
Of the P68 billion worth of pre-sales
last year, 17% was generated by global sales, mainly from overseas Filipino
workers, up from 6% to 7% five years ago, Mr. Hao said.
In 2013, Megaworld began consolidating
Mr. Tan’s property businesses under one roof.
It plans to purchase the 49.20% stake
of Alliance in Global-Estate Resorts, Inc., bringing to 74.96% its total
ownership in the firm.
It also acquired 100% of Suntrust
Properties, Inc. last year and owns 82% of Empire East Land Holdings, Inc.
Megaworld first-quarter net income
grew 49% from a year earlier to P2.69 billion.
Total revenue of the company and its
subsidiaries surged 22% from a year earlier in the first three months to P9.94
billion.
Costs and expenses rose 15% to P6.6
billion from P5.8 billion.
Megaworld closed at P4.52 yesterday,
up 0.22% or P0.01.
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