Megawide betting on affordable housing development
MANILA -Tycoon Edgar Saavedra’s Megawide Construction Corp. revealed plans to focus on affordable housing development after announcing its diversification into real estate.
Shareholders of Megawide, one of the country’s biggest engineering and construction firms, approved the P5.2-billion acquisition of affiliate firm PH1 World Developers Inc. during the company’s annual stockholders’ meeting.
Megawide was the builder of medium and large-scale residential projects for some of the country’s biggest developers, including Sy-led SM Development Corp., before it ventured into infrastructure.
“The move is a natural progression of our construction and engineering unit into higher value-generating businesses and gives more momentum to our forward integration initiatives within the group,” Saavedra said.
READ: Megawide diversifies into property development
The move will also allow the company to realize better profit margins compared to its business as a contractor.
Megawide said this would boost consolidated net margins from “single digits to high teens, driven by better margins and price appreciation upside associated with property development”.
Saavedra added the company intends to focus on affordable housing segment with price points serving the lower middle-income segment.
Having its own pipeline of real estate projects will allow the company to grow its construction order book.
“These gaps are what aim to fill through the synergy of Megawide and PH1. We will work to create an innovative and competitive product that will be appreciated by our target market,” Saavedra said.
PH1’s pipeline of vertical and horizontal developments include My Enso Lofts in Timog, Quezon City and Modan Lofts in Pasig and Taytay, Rizal.
Megawide is entering new business lines after earlier announcing its gradual exit from the the Mactan Cebu International Airport project.
READ: Megawide GMR closes sale of Cebu airport to Aboitiz Group
“Construction is an enabler for us to venture into more value-accretive platforms, such as airport and landport operations, and now property development, together with the related income sources and value that they deliver,” Saavedra said.
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