Megaworld Corp., the holding firm for tycoon Andrew Tan’s property businesses, is firming up its footprint in the tourism sector with the acquisition of a majority stake in tourism estate developer Global-Estate Resorts Inc. (GERI).
During the company’s annual stockholders’ meeting held Friday, the company announced that it has already finalized its takeover of GERI from the company’s parent firm Alliance Global Group, Inc., the holding conglomerate owned by Tan.
The consolidation of all real estate businesses of Tan under the Megaworld brand started earlier this year, a move seen to enable the company to capitalize more on real estate opportunities and to capture the expected growth momentum of its real estate affiliates.
As a result of the latest transaction, the ownership stake of Megaworld in GERI stands at 80.4 percent.
With the majority acquisition of GERI, Megaworld has added around 3,000 hectares to its land bank and ownership of vast properties in Tagaytay, Alabang, Iloilo, Cagayan de Oro, and Boracay.
“Megaworld’s acquisition of GERI signals our official entry to the country’s tourism industry. We will be bringing the 25-year expertise of Megaworld in mixed-use developments which we call ‘townships’ to the projects of GERI,” Andrew Tan, chairman and chief executive officer of Megaworld, said during his speech in the meeting.
GERI’s biggest projects include the 1,149-hectare Twin Lakes, a European-inspired masterplanned integrated tourism estate with its own vineyard located near Tagaytay, and the 150-hectare Boracay Newcoast in Boracay Island.
Besides GERI, Megaworld wholly owns Suntrust Properties Inc. and holds a majority stake in Empire East Land Holdings, Inc.
At the sidelines of the firm’s annual stockholders meeting, Megaworld Executive Director Kingson Sian indicated that with the company reporting a P1 billion increase in its recurring profit every year, it is possible to hit the P10-billion recurring income. Last year, recurring income of the company was already at P6 billion.
Recurring income is defined as compensation received on a continuous basis for work after it has been completed, and is a key revenue stream for property developers.
Megaworld also reported it is planning P230 billion in capital expenditures over the next five years.