MEGAWORLD Corp., the listed property vehicle of tycoon Andrew Tan, sees its core net income growing by more than 10 percent up to 2019 in tandem with projects running in the pipeline.
During its annual stockholders’ meeting, Megaworld Director Kingson Sian said the profit guidance rests on what the company perceives as the strong demand across all businesses –residential, office and retail.
“We see improved margins as we acquired our lands [that we’re developing]way back and we also see us benefitting from the appreciation of land,” Sian said, referring to the township developments, mostly the robust sales in residential projects.
Jericho Go, Megaworld senior vice president, said in a press briefing, “We see a demand in the office sector of about 600,000 to 800,000 square meters (sqm). In whole, the demand [in office space]is averaging 100,000 sqm. yearly. We are confident because the projects we’ve launched and we’re launching, the take up is strong. It’s a bull market for the office segment for Megaworld.”
The company is targeting P90 billion to P95 billion in reservation sales, while rental income is expected to reach P9 billion from P7.1 billion a year earlier.
Rental income for 2016 is expected to reach P10 billion, and real estate sales of P88 billion.
A higher recurring revenue will come from rental rates in the township developments and new projects for additional revenue streams, Sian said in the same briefing.
The growth prospects are bright as the company is set to launch five new townships this year, Tan said during the stockholders’ meeting.
To date, the company has 4,000 hectares in its land bank portfolio.
From 2015 to 2019, Megaworld has programmed a P285.8billion expansion plan to expand its portfolio – residential, office, retail and hotels – with the initial P65 billion to be used as capital expenditure for this year.
In the first three months of the year, Megaworld’s posted P2.35 billion in net income, up 12.48 percent from P2.09 billion on-year, while consolidated revenues rose by 12.08 percent to P10.47 billion from P9.34 billion.
The subsidiaries GlobalEstate Resorts Inc., Empire East Land Holdings Inc. and Suntrust Properties Inc. contributed to the revenues.