Posted on March 07, 2016 08:25:00 PM [ bworldonline.com ]
By Krista A. M. Montealegre, Senior Reporter
THE MEGAWORLD Group of billionaire Andrew L. Tan is keeping its planned capital expenditure (capex) budget steady this year, as the property developer builds up its recurring portfolio across its integrated urban townships.
ANDREW L. TAN -- BW FILE PHOTO
Megaworld Corp. told the stock exchange yesterday the group set its capital spending program at P55 billion this year, 75% of which will be used to develop its malls, commercial centers, office towers and residential buildings. The remaining 25% will be allocated for land acquisition and investment properties.
Megaword said the capex budget is the same as the amount spent last year across the group, including Empire East Land Holdings, Inc., Global-Estate Resorts, Inc. (GERI), and Suntrust Properties, Inc. The group originally earmarked P65 billion last year, but it did not use the P10 billion allotted to acquire more land.
“This year, we will start developing our new townships in Pasig City, Bacolod and Pampanga, while we ramp up our office and mall developments across our existing townships,” Megaword Senior Vice-President Jericho P. Go was quoted in the statement as saying.
The group has 20 integrated urban townships, with its total land bank spanning over 4,000 hectares across the country.
“We are bullish on the office and retail sectors because we see a remarkable growth in these businesses,” Mr. Go said.
This year, the group is rolling out 14 residential projects in Metro Manila, Pampanga, Iloilo, Tagaytay, Cavite, Davao, Baguio and Batangas.
Another 14 office towers, malls and commercial centers are set for launch in McKinley West, Uptown Bonifacio, The Mactan Newtown, Iloilo Business Park, Arcovia City, Southwoods City, The Mactan Newtown and Alabang.
“We will certainly achieve the P11-billion rental revenue target by year-end,” Mr. Go said. The goal represents a growth of more than 20% from a year ago and higher than the original projection of P10 billion, the developer said in January.
The real estate firm had said it will complete projects that will add a total gross floor area of more than 650,000 square meters this year to its portfolio of developments that will provide the company a steady stream of recurring revenues.
In 2015, the Megaworld Group completed 16 residential projects and six office towers catering to the business process outsourcing sector with retail components across its townships.
Megaworld owns 100% of Suntrust, 82% of GERI and 82% of Empire East. It is part of Alliance Global Group, Inc., which is also the holding firm for Mr. Tan’s liquor, gaming and quick-service restaurant businesses.
Megaworld shares added three centavos or 0.79% to close at P3.85 each, GERI shares rose four centavos or 4.17% to P1 apiece and Empire East shares were flat at 83 centavos each.