MEGAWORLD Corp., the property-development arm of businessman Andrew L. Tan, said it is increasing its capital expenditures this year by about 9 percent to P60 billion, from last year’s P55-billion budget.
The company—known for its mixed-use developments mainly for the business-process outsourcing sector—said 80 percent of the capital spending for the year, or about P48 billion, will be used for accelerating and expanding projects in various townships across the country. The remaining 20 percent, or P12 billion, will be used for land acquisition and investment properties.
“Since our company’s cash position remains healthy, we will mostly utilize internally generated funds to finance our capital spending for the year, and we will also tap the debt market through the proceeds of the first tranche of our P30-billion retail-bond program,” the company said in a statement.
Megaworld said it is set to launch 20 residential projects in Uptown Bonifacio, McKinley West and McKinley Hill, all in Taguig; Iloilo Business Park in Mandurriao, Iloilo City; Capital Town in San Fernando, Pampanga; Maple Grove in General Trias, Cavite; Eastland Heights in Antipolo; Boracay Newcoast in Aklan; Sta. Barbara Heights in Iloilo; and Twin Lakes near Tagaytay. All of these have a combined sales value of around P31.2 billion.
Along with its units, the company said it is set to fast-track most of its developments in existing townships, particularly in McKinley West and Uptown Bonifacio, Davao Park District, Iloilo Business Park, Boracay Newcoast, Twin Lakes near Tagaytay and Alabang West.
Meanwhile, the company said it is adding seven new office towers in Iloilo Business Park, Newport City, Eastwood City, Southwoods City and Las Piñas; and six new shopping malls and commercial centers in Taguig, Boracay, Iloilo, Las Piñas and Makati.
“While we expand our existing residential properties and introduce more residential products in our townships this year, we continue to focus on our goal toward doubling our rental revenues by 2020. The country’s sound business climate allows us to further grow our office and commercial leasing businesses toward a strong and stable recurring income base,” the company said.
Megaworld earlier said its income from the rental of its buildings and shopping malls is expected to reach P20 billion by 2020, more than doubling its recorded rental income in 2015.
In the next three years, the company will be completing close to 1 million square meters of new rental inventory, mostly office, malls and commercial spaces around its 22 mixed-use developments across the country. This will bring the company’s total rental space inventory to more than 2.5 million sq m by 2020.
“While we remain strong in our residential-condominium business, it is also imperative for us to also fortify our rental portfolio. This direction will not only allow us to become a stronger and more sustainable company but, at the same time, we address the increasing demand for these spaces in our various townships,” said Jericho Go, the company’s SVP.