Megaworld sees P7.2B in rental revenue from office property business

Tycoon Andrew Tan-led Megaworld Corp. expects to generate P7.2 billion in rental revenue from the office property segment of its business this year as it becomes the first Philippine property developer to build up one million square meters of office space inventory.

The amount will form part of the P12 billion in projected recurring income for this year, Megaworld senior vice president Jericho Co said in a briefing yesterday.

By 2020, Megaworld aims to hit P10 billion to P12 billion in office rental revenues more than half of its P20-billion annual recurring income target by that time, Go said.

“There is no reason to slow down our office developments. The demand for office space in our townships continues to grow and we will continue to build in order to meet our clients’ growing requirements,” Go said.

At present, Megaworld has a total office stock of 888,500 square meters but another 111,500 square meters of inventory will be completed before the end of the year in McKinley Hill, Southwoods City, Davao Park District and Iloilo Business Park.

“Aside from BPOs (business process outsourcing), we also see growth in traditional offices, as well as back office and support offices, and facilities providers for online gaming operators,” Go said.

To date, around 80,000 square meters of the company’s total office inventory had been leased to Philippine online gaming operators (Pogo), which needed work space for their back office and support operations such as information technology and technical support, customer service and financial services.

Moreover, facilities providers for online gaming operators are also leasing spaces, allowing them to sublease ready offices equipped with the required workspace set-up, supplies, furniture and fixtures for these operators.

Go said Megaworld currently accounted for about 33 percent of office space in the country, making it the dominant office property landlord.

By 2020, he said Megaworld’s office inventory would further grow to 1.5 million sqms.—DORIS DUMLAO-ABADILLA