GLOBAL Estate Resorts Inc. (GERI), the listed subsidiary of Andrew Tan-led property giant Megaworld Corp., intends to ramp up commercial projects in the next few years to achieve a P500 million recurring income by 2017.
In a press briefing after the GERI’s annual stockholders meeting, Megaworld Senior Vice President Jericho Go said the company is looking at growing its recurring income to P500 million from nearly nothing due to a small retail portfolio in the 1,200-hectare Twin Lakes township.
The 561-hectare Southwoods City and Twin Lakes will help the company develop streams of recurring income, Go said, The townships and office developments which are expected to be completed from 2016 to 2017.
“We want to increase our recurring income base. As more opportunities come, we wanted to grow our commercial projects other than our current portfolio, mostly consisting of residential developments,” Go said.
GERI has programmed P5 billion in capital expenditures (capex) from P1.8 billion last year. Some 50 percent of this year’s budget will be sourced from internal funds and other half from alternative credit lines.
This year, the company is eyeing to grow it net income by 30 percent on the back of streamlined operations and improvements across all its businesses.
In the same briefing, the company announced the revision of its Sta. Barbara Heights project into a “full pledged township development” with commercial retail and office components from the previous master plan geared towards a residential subdivision.
Go said the Sta. Barbara bloc will be the 18th township under the Megaworld plan of 20 townships by later this year from 15 last year. The firm has programmed P10 billion for Sta. Barbara’s 10year development timeline.
Since it started constructing the residential components four years ago, the company already spent P3 billion to P4 billion of the P10 billion Sta. Barbara budget.
With the planning of upcoming commercial retail centers and offices, Go said the P10 billion capex “may be increased” depending on the outcome of the new master plan drawn out for the township development.
In 2014, GERI posted P857 million in net income – a 151 percent increase from a year earlier, that included one-time gain from the its consolidation under Megaworld. Minus the nonrecurring item, its net income rose to P480 million, up 41 percent.