AGI sets P75-b capex for expansion push
Alliance Global Group Inc., (AGI) the listed holding firm of billionaire Andrew Tan, plans to spend P75 billion this year to support expansion efforts.
Such an amount would be AGI’s largest capital spend since 2016. The company hopes that increased outlays would make AGI the top player in the domestic lifestyle space.
AGI, which has interests in real estate, liquor, hospitality, leisure and fast-food, on Thursday said the planned capital expenditure (capex) this year represented a 19-percent increase from last year’s actual capex of P63 billion.
READ: Alliance Global profit jumped 20% to P30.3B in 2023
More than 70 percent of the total, or P55 billion, will go to the real estate business under Megaworld Corp..
Megaworld plans to expand its portfolio this year to 35 townships from 31 currently, mostly through new developments outside Metro Manila.
Article continues after this advertisementKevin Tan, president and CEO of AGI, said they expected reservation sales to grow to P145 billion this year on strong growth from the real estate unit, particularly lifestyle malls and hotels.
Article continues after this advertisementThis is a 4.31-percent rise from last year’s reservation sales of P139 billion.
“We expect all segments of our real estate business to see good growth this year, with the strongest top line improvement likely to come from our lifestyle malls and hotel operations,” Tan said during AGI’s annual stockholders meeting.
“Our residential segment should also continue to do well, benefiting from higher project completion and historically strong sales pickup,” he added.
READ: Property, food units lift Alliance Global income
According to AGI, new hotel projects are expected to rise in Iloilo and Boracay. Lifestyle malls will be built in Cavite and Pampanga. New “premium” office buildings will be built in Iloilo, Bacolod and Pampanga.
“We are also confident that our premium office segment will maintain its above-industry occupancy rate and performance,” Tan said.
As of 2023, Megaworld’s office occupancy rate stood at 96 percent versus the industry average of 81 to 88 percent in Metro Manila.
The developer plans to rack up 3 million square meters of total space by the end of the decade from around 2 million sq m last year.
