Billionaire Andrew Tan’s Megaworld Corp. will increase project launches by 33 percent to P60 billion in 2023 to sustain growth despite challenges weighing on the real estate sector.
The property giant said in a recent presentation to analysts that reservation sales for residential projects in 2023 were expected to reach P130 billion. This compares to almost P119 billion in pre-sales last year.
Capital spending in 2023 will also reach P55 billion, nearly 20 percent more than the previous year. The company indicated in the presentation it would expand the shopping mall and office segments.
“Continued improvement of real estate revenues is expected on the back of the increase in construction activities,” Megaworld said in the presentation.
The bullish outlook comes amid worries rising interest rates, spurred by the Bangko Sentral ng Pilipinas’ fight to tamp down persistent inflation, would hurt demand for real estate.
“I think it’s cyclical and they might be expanding in anticipation of the end of the recession and [eventual] lower interest rates,” Luis Gerardo Limlingan, head of sales at stock brokerage house Regina Capital Development, said in a text message on Tuesday.
Megaworld said it also sees stable occupancy and continued rent increases for offices. This was despite industry-wide vacancy rates of above 17 percent in Metro Manila alone.
A total of 207,200 square meters office projects were in the developer’s pipeline from 2023 to 2026.
Projects include No. 1 Upper East (Bacolod City), International Finance Center (Taguig City), Enterprise 1 & 2 (Iloilo City), Pasudeco 1 (Pampanga), and TwoMcWest (Taguig City).
Another 159,500 square meters of new mall space was being planned from 2023 to 2026.
The projects were D’Olive (Antipolo City), Davao Whisky Park (Davao City), Park McKinley West (Taguig City), Boracay Newcoast Beachwalk (Boracay Island), The Capital Mall (Pampanga), Maple Grove Commercial (Cavite), Highland Mall and Park (Cainta, Rizal), Upper East Mall (Bacolod City).
“Mall rent is expected to exceed prepandemic revenues on the back of higher occupancy pandemic and full rent collection,” Megaworld said in the presentation.
It added that 3,159 hotel rooms will be added from 2023 to 2028.
These were the Chancellor Hotel Boracay, Grand Westside Hotel (Parañaque City), Belmont Hotel Iloilo (Iloilo City), Kingsford Hotel Bacolod (Bacolod City) and Savoy Hotel Palawan.
Megaworld earlier said net income in 2022 rose 7 percent to P13.5 billion while consolidated revenues expanded by 17 percent to P59.5 billion. INQ
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