‘Cautiously optimistic’ on residential segment next year
Property giant Megaworld Corp. is bullish about the office and retail segment as it accelerates ongoing developments, but is “cautiously optimistic” with regard to the residential sector.
Overall optimism, Megaworld Senior Vice President Jericho Go told reporters, was being driven as “we continue to drive hard in improving our office and retail portfolio. This continues to drive demand also for residential.”
“I can categorically say [that in]office, retail, Megaworld is not slowing down. We are actually even accelerating,” Go said, citing the company’s McKinley West project in Fort Bonifacio as an example.
The second batch of towers — amounting to 30,000 square meters of office space – will now be delivered by around the middle to the third quarter of 2016 instead of the initial end of that year to early 2017 commitment.
The first three towers of the Mckinley West development will be topped off by yearend or by early January, Go added.
He said Megaworld had added 116,000 square meters of gross leasable area to its office portfolio this year and was looking to add at least another 100,000 square meters in 2016.
“It’s approximately 100,000 square meters as a guidance minimum … we’re confident that that’s the cruising range,” he explained.
Go said lease income was also a factor in Megaworld’s bullish outlook for the property sector.
“Please keep in mind that among all other developers, Megaworld is the only developer that has at least 130 tenants for office spaces,” he said.
Go said that this was the reason why the three towers of its Uptown Bonifacio project were already 100 percent leased out.
“The reason why we are already 100 percent leased in Uptown Bonifacio is precisely because of clients, existing ones that are already expanding,” he said
With regard to the residential segment, meanwhile, Go said the company’s “cautious optimism” was due to the possible impact of global developments on consumer demand.
“We’re studying the market trends. You have to remember madaming factors dyan (there are a lot of factors involved),” he said.
Residential sales, he noted, could be affected by a yuan devaluation, the impending US Federal Reserve rate hike and low oil prices that could crimp the amount of money sent home by migrant Filipinos or invested in the Philippines by foreigners.
Twenty percent of documented residential sales are generated abroad, Go said.
“Megaworld International, on the average. brings in 20 percent of our sales for residential. When we say Megaworld International, overseas yan, hindi lang Filipino, kasi may mga foreigner din na clients so hindi rin pwede sabihing OFW lang (It’s overseas, not just Filipinos, because there are also foreign clients. We cannot say that it is just from overseas Filipino workers),” Go explained.
Domestically, a strong outsourcing sector could boost sales, he added.
As for the coming year, Go said Megaworld would be setting a “unique focus,” details of which he declined to disclose.
“There will be a unique focus next year, we will let you know. This year we talked about five townships. Next year will be a different angle altogether,” he said.