Megaworld earmarks P300 B for 5-year capex

MANILA, Philippines — Property developer Megaworld Corp. is setting aside P300 billion for its capital expenditures from 2020 to 2024 as it continues to expand its township and integrated developments portfolio across the country.

Megaworld chief strategy officer Kevin Tan said P195 billion or 65 percent of the five-year capex will be used for the company’s construction initiatives. This will be broken down into P117 billion for residential construction and P78 billion for the construction of investment properties, which include offices, malls and hotel projects.

The remaining 35 percent of the capex or P105 billion will be used for the firm’s land acquisition efforts.

“Initially for next year, we will add 2,000 hectares,” Tan said, adding that the company’s land bank will hit 6,000 hectares by the end of next year.

At present, the company has a land bank of 4,700 hectares, which is expected to expand by almost 45 percent with the launch of six more townships and integrated lifestyle communities by next year.

Tan said the company’s existing land bank would be sufficient for the next 10 to 15 years of development.

“When we go outside Metro Manila, the footprint gets bigger and bigger. So we anticipate a huge addition to that beyond 2020,” he added.

The property developer previously allocated P285 billion for its five-year capex program from 2014 to 2019.

“Megaworld has secured significant coverage of raw land in the areas where we want to be in. Our focus now is on developing the land in order to sustain and further propel our strong earnings moving forward,” Tan said.

Asked how many townships the company is planning to put up in the next five years, Tan said it is still hard to project.

However, he added that in the past three years, the company has been launching about two to three township projects per year.

“With the growth of the Philippine economy we perceive that it will continue. There will obviously be more townships,” Megaworld director Kingson Sian said.

Moreover, Tan said the company is still in the process of coming up with the company’s targets for the next five years.

“It”s going to be aggressive given we’re very bullish with the Philippine economy right now and all its prospects,” Tan said.

Of the company’s current township projects, around 3,000 hectares of land is located 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 the 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.

At present, the company has a portfolio of 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.