Megaworld earnings seen to soar to record P6B this year

MANILA, Philippines - Megaworld Corp. expects its net earnings to soar to an all-time high of P6 billion this year, or 18 percent higher than the P5.09 billion reported in 2010, on robust sales of its mega-communities and growing strong takeup of retail and office space.

Real estate tycoon Andrew Tan, chairman and president of Megaworld, said the firm is looking at another banner year with demand for primary homes and office spaces seen to continually increase.

Kingson Sian, the company’s executive director and senior vice-president, added that they remain on bullish mode, putting in place a string of new projects that will further boost its cashflow.

By yearend, reservation sales are forecast to grow to P44 billion while rental income is seen to hit a record P4 billion with the completion of Lucky Chinatown Mall, which will have more than 108,000 square meters of retail space by end-2011.

The company will also complete more than 77,000 sqm of new office space to cater to the growing demand of BPO companies.

Sian said rental income is projected to rise further to P5 billion by 2012 with the completion of new retail centers and office buildings.

Megaworld will beef its up its rental portfolio of BPO office developments and retail malls from 452,763 sqm in 2010 to around 638,502 sqm by the end of this year.

Tan said Megaworld remains as the leading BPO office space provider in the country, with a total inventory of 384,000 sqm by end-2010.

“We are sure that our conservative development philosophy, which focuses on the avoidance of speculative building and on strong pre-selling and phased office development efforts, as well as our prudence in financial management and investment decision-making, will continue to serve us well as we face new challenges,” Tan said.

The Megaworld Group, which also includes Empire East & Land Holdings and Suntrust Properties, is embarking on a massive homebuilding program that will roll out some 18,673 residential units with an aggregate floor area of more than 830,000 sqm in 2011.

Tan said while the company has achieved much through the years, it does not intend to rest on its laurels as it continues to acquire prime properties to secure a stronger platform for growth. Megaworld has a total landbank of 230 hectares of prime land in key growth centers in Metro Manila, Iloilo and Cebu sufficient for development over 15- 20 years.

Among these properties include 55 hectares in Iloilo, 25 hectares in Mactan, Cebu, 7.1 hectares of the former Napolcom property within Fort Bonifacio and 8.5 hectares of land at the North Central Business District in North Bonifacio. These properties have a developable area of 2.29 million sqm, of which around one million sqm will be converted into residential areas and around 886,000 sqm will be for office spaces. The remaining areas are dedicated for retail and leisure development projects.

Megaworld will also be developing over the next 20 years the former 34.5-hectare Joint United States Military Advisory Group (Jusmag) property in Fort Bonifacio, which has been renamed Mckinley West, next to Forbes Park. The lot will be transformed into a mixed-use complex at an estimated cost of at least P22 billion.

The addition of Mckinley West brings Megaworld’s total development portfolio in the burgeoning Fort Bonifacio area to a total of 105 hectares.