MEGAWORLD CORP. is boosting its retail footprint that will take advantage of the strong demand for office space within its townships across the country, while brushing aside concerns of a slowdown in the residential sector.
The property conglomerate of billionaire Andrew L. Tan will launch an average of 60,000 to 70,000 square meters (sqm) of retail space every year until 2019, Megaword Senior Vice-President Jericho S. Go told reporters last week.
By 2020, Megaword’s lifestyle malls will have a total gross floor area of 1.4 million sqm with their contribution to rental income seen increasing to as much as 50%.
Megaword’s retail projects draw its strength from the office buildings serving business process outsourcing companies within its townships, Mr. Go said. The real estate developer is bringing to the market at least 100,000 sqm of office space every year until 2019.
“We are on track, if not ahead, in terms of meeting those targets,” Mr. Go said.
For the residential sector, Mr. Go said sales this year have been “encouraging,” tracking “what we had in the past two years” despite coming from a high base.
“It is an election year. Even for those that have the money to purchase, they are on wait-and-see mode, but that doesn’t mean there is a slowdown. They are just waiting for the proper timing,” Mr. Go said.
The sweet spot for Megaworld continues to be the middle-income segment or projects ranging from P3 million to P7 million per unit.
“That’s where the money is. That is where the purchasing power is,” Mr. Go said.
Megaworld’s bottomline was halved to P10.57 billion last year from the previous year’s P21.55 billion which included a P12.16-billion nonrecurring gain. Excluding the one-time gain, the company’s core net income climbed 11% to P10.4 billion last year.
Megaworld is part of Alliance Global Group, Inc. — the holding firm for Mr. Tan’s liquor, gaming and quick-service restaurant businesses.
Shares in Megaworld slid four centavos or 1% to end at P3.95 each on Friday.