Megaworld to spend P47B over 10 years for new projects

Upscale property developer Megaworld Corp. is setting aside P47 billion over a 10-year period for the development of new residential projects, office buildings for business process outsourcing (BPO) firms, and retail outlets.

Megaworld chairman Andrew Tan said P20 billion of the programmed capital budget will be channelled to the construction of office buildings catering to the needs of call center companies or BPO firms and acquisition of additional properties to expand rental income.

To take advantage of the continued robust growth of the call center business, Tan said the company has set aside 80 percent of the proceeds from the international and local offering of shares for the construction of office space for BPO companies. Megaworld raised P5.41 billion from the sale of shares to the public.

Tan said Megaworld intends to build around 400,000 square meters of BPO-ready office space over the next five years in Eastwood City, Mckinley Hill and Newport City.

For this year, Megaworld is building two call center buildings. Once completed, these structures would raise the company’s BPO leasable space to 105,000 square meters.

Among the big-ticket township or residential projects of the company include the 50-hectare McKinley Hill in Bonifacio Global City, the 25-hectare Newport City near the Villamor golf course in Pasay City, and Manhattan Garden City in Araneta Center, Cubao. These projects combined require total investments of $787 million (roughly P40.14 billion).

Funding for the projects will come from pre-selling activities and proceeds from its recently-concluded offering, said Megaworld senior vice-president Kingson Sian.

"With over 50 institutional investors covered in the global management road show, Megaworld was successful in attracting mostly high-quality long-term investors with particular strong interest from European investors," he said.

Mckinley Hill will comprise a residential subdivision, low-rise condominiums and a commercial center. The project is a 50-50 joint venture with the Alliance Global Group Inc.

On the other hand, Newport City, a joint development with the Bases Conversion Development Authority, is expected to generate P150 million in recurring income a year from an airport hotel and retail and commercial operations. Marketing of the residential section of Newport City is slated to kick off by the third quarter of this year.

Another project is the P15-billion Forbes Town Center, a joint development with the Bonifacio West Development Corp.

Other projects slated for completion this year up to 2008 are The Eastwood Excelsior (2005), One Orchard Road, The Grand Eastwood Palazzo and the Eastwood Parkview. The Eastwood Excelsior is a twin-tower residential condominium building while Parkview is a Miami-style twin tower residential-cum-mall development.

Apart from property development, Megaworld is also into hotel operations through Prestige Hotels & Resorts Inc., a subsidiary which operates the Richmonde Hotel in the Ortigas Center.