PROPERTY developer Megaworld is allocating P300 billion in capital spending starting next year through 2024 as it buys more land to expand its reach outside of Metro Manila.
Kevin Andrew L. Tan, the company’s senior vice president for commercial division, said the company will buy more land to fuel its expansion. By next year, it will add 2,000 hectares to its land bank of about 4,700 hectares.
“We anticipate a huge addition to that beyond 2020,” Tan said, adding the business-process outsourcing (BPO) industry, which served as the bed rock of its growth over the past decade, continues to grow.
Tan said the company now wants to start selling office spaces rather than renting it out to the BPO firms.
“We want to do office for sale, but we want to do that outside of Metro Manila. [It’s where we] will be positioning as the next Makati. It’s a format we will be expanding because of higher margins and I think that demand is strong,” Tan said.
Out of the P300-billion capex it will spend over a five-year period, Megaworld said it will allocate 65 percent or approximately P195 billion for its residential developments and investment properties, which mostly account for its offices, malls and hotels.
The remaining 35 percent or around P105 billion will be set aside for land acquisition and land banking.
For 2014 to 2019, Megaworld allocated P285 billion for its five-year capex program, most of which have been utilized for property and township developments.
“Our existing land bank would be sufficient for the next 10 years to 15 years of development,” Tan said.
Around 3,000 hectares of land is covered by the company’s township developments in Luzon, mostly in the Calabarzon area.
In Metro Manila, Megaworld has a total key land holdings of almost 300 hectares, with significant presence in Makati, Fort Bonifacio, Quezon City, and even in the bustling Manila Bay Area, particularly within Entertainment City where the company is currently the largest land owner and developer.
Megaworld’s townships, likewise, covers 600 hectares of land in Visayas and Mindanao, with key presence in Iloilo, Bacolod, Boracay, Cebu and Davao.
During the past 30 years, Megaworld built around 700 residential developments, 1.6 million square meters of leasable spaces under both Megaworld Premier Offices and Megaworld Lifestyle Malls, and over 3,000 room keys across its hospitality developments under Megaworld Hotels.