Bullish Megaworld sets P300-B five-year capex

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By Arra B. Francia, Senior Reporter

MEGAWORLD Corp. is bullish on the growth of the Philippine economy as it commits to spend P300 billion over the next five years to expand its residential, office, retail, and hotel projects.

The listed property developer said it will roll out the programmed spending from 2020 to 2024. It set a capex of P285 billion for the 2014-2019 period. This year alone, Megaworld is set to spend P65 billion for its expansion.

“We are trying to set new targets for 2020 and beyond…It’s going to be quite aggressive given that we’re feeling very bullish with the Philippine economy right now,” Megaworld Chief Strategy Officer Kevin Andrew L. Tan said in a press briefing after the company’s annual shareholders’ meeting in Quezon City yesterday.

About 65% of the five-year capex or P195 billion will be spent for the development of residential projects and investment properties such as offices, lifestyle malls, and hotels. The balance of 35% will be used for land acquisitions.

The company will use internally-generated funds for the capex.

Mr. Tan said they will continue with their usual track of launching two to three townships per year. The company earlier said it will have a total of 30 townships by end-2020, from its current network of 24 estates.

For its mall segment, Megaworld will introduce one major mall and about two to three community malls every year. Major malls typically cover 30,000-50,000 square meters (sq.m.) in gross floor area, while the community malls are usually sized from 10,000-15,000 sq.m.

Megaworld is also expanding its homegrown hotel brands as it looks to open Belmont Boracay, Savoy Mactan, and Grand Westside City in Parañaque. Together with sister firm Travellers International Hotel Group, Inc., Megaworld is on track to hit its target of having 12,000 hotel rooms moving forward.

The company also noted that it currently has 4,700 hectares of land bank under its portfolio. It 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,” Mr. Tan said.

The top executive said there are opportunities in areas like the Calabarzon region as Metro Manila’s population becomes densers.

“That’s why we have heavy presence in those areas and we continue to expand those areas. We feel that that will be the next wave…You’ll see new industries or new CBDs (central business districts) opening in those areas as well that’s why we’re making bets on those locations,” Mr. Tan said.

Megaworld grew its net income attributable to the parent by 16% to P3.8 billion in the first quarter of 2019, boosted by a 15% uptick in consolidated revenues to P14.9 billion.

Shares in Megaworld climbed 2.88% or 17 centavos to close at P6.07 apiece at the stock exchange on Friday.