Per Arra B. France, Senior reporter
MEGAWORLD Corp. is optimistic about the growth of the Philippine economy as it pledges to spend P300 billion over the next five years to expand its residential, commercial, retail and hospitality projects.
The listed real estate developer said it will launch scheduled spending from 2020 to 2024. It has established an operating investment of P285 billion for the period 2014-2019. Only this year, Megaworld is expected to spend P65 billion for its expansion.
"We are trying to set new targets for 2020 and beyond … It will be quite aggressive, as we are feeling very optimistic about the Philippine economy right now," Megaworld director of strategy Kevin Andrew L. Tan said in an interview collective after the company's annual shareholder meeting in Quezon City yesterday.
About 65% of the five-year investment or P195 billion will be spent for the development of residential projects and investment properties such as offices, malls and hotels. The 35% balance will be used for land acquisitions.
The company will use internally generated funds for capex.
Mr. Tan said they will continue with their usual way of launching from two to three counties per year. The company said previously that it will have a total of 30 counties by the end of 2020, from its current network of 24 properties.
For the mall segment, Megaworld will feature a large mall and about two to three community malls each year. The main shopping malls typically cover from 30,000 to 50,000 square meters (m²) in gross area, while community malls are generally 10,000 to 15,000 m².
Megaworld is also expanding its home-made hotel brands to open Belmont Boracay, Savoy Mactan and Grand Westside City in Parañaque. Together with Travelers International Hotel Group, Inc., Megaworld is on its way to achieving its goal of having 12,000 hotel rooms moving forward.
The company also noted that it currently owns 4,700 acres of land bank under its portfolio. The company expects to add another 2,000 hectares by 2020.
"Our existing land bank would be sufficient for the next 10 to 15 years of development," Tan said.
The top executive said there are opportunities in areas such as the Calabarzon region, as the population of the metropolitan area of Manila becomes denser.
"That's why we have a strong presence in these areas and continue to expand those areas. We believe this will be the next wave … You will see new industries or new CBDs being opened in these areas, which is why we are making bets on these sites, "Tan said.
Megaworld increased its net income attributable to the parent company by 16% to P3.8 billion in the first quarter of 2019, driven by a 15% increase in consolidated revenues to P14.9 billion.
Shares of Megaworld rose 2.88 percent or 17 cents to close at 6.07 on the stock exchange on Friday.