PROPERTY giant Megaworld Corporation has set capital expenditure for this year at P60 billion, most of which will be used to accelerate the development of its township projects.
In a disclosure to the Philippine Stock Exchange on Wednesday, Megaworld said 80 percent of this year’s capex “will be used for accelerating and expanding projects in various townships across the country, particularly on the construction of new residential condominiums, office towers, commercial centers and hotels.”
The remaining 20 percent, or an estimated P12 billion, will be spent on land acquisition and investment properties, the company said.
This year’s capex is 9.1 percent higher than its budget of P55 billion last year, and a portion will also be used for its subsidiary brands namely Global Estate Resorts Inc.(GERI), Empire East Land Holdings Inc., and Suntrust Properties Inc., the company said.
Megaworld said it is set to launch 20 residential projects this year with an aggregate sales value of P31.2 billion.
These developments are located in its various townships, including in Uptown Bonifacio, McKinley West and McKinley Hill, all in Fort Bonifacio; Iloilo Business Park in Mandurriao, Iloilo City; The Capital Town in the City of San Fernando, Pampanga; Maple Grove in General Trias, Cavite; Eastland Heights in Antipolo, Rizal; Boracay Newcoast in Boracay Island; Sta. Barbara Heights in Iloilo; and Twin Lakes near Tagaytay.
To grow its recurring income portfolio, it is set to add seven new office towers in Iloilo Business Park, Newport City, Eastwood City, Southwoods City and Las Pinas City and six new lifestyle malls and commercial centers in McKinley West, Boracay Newcoast, Iloilo Business Park, Las Pinas City and Makati City.
Megaworld treasurer Francis Canuto said these developments are in line with their goal of doubling rental revenues to P20 billion by 2020.
“While we expand our existing residential properties and introduce more residential products in our townships this year, we continue to focus on our goal towards doubling our rental revenues by 2020,” Canuto said.
“The country’s sound business climate allows us to further grow our office and commercial leasing businesses towards a strong and stable recurring income base,” he said.
Canuto said bulk of this year’s capex will be funded internally.
“Since our company’s cash position remains healthy, we will mostly utilize internally generated funds to finance our capital spending for the year, and we will also tap the debt market through the proceeds of the first tranche of our P30-billion retail bond program,” Canuto expressed.
At present, Megaworld has 22 township developments across the country. It owns 100 percent of Suntrust Properties, Inc., 82 percent of GERI and 82 percent of Empire East Holdings, Inc.