Megaworld budgets P30B to build new offices

Megaworld Corp. is bullish on growth prospects in the office market, particularly outside Metro Manila. INQUIRER FILE PHOTO

MANILA, Philippines – Megaworld Corp. will spend P30 billion in the next five years to build offices mostly outside Metro Manila, with the developer expecting international firms to drive demand amid a weak market.

The company led by billionaire Andrew Tan said on Monday the budget would be used to “reinvent, reinvigorate and reimagine” existing office developments.

“We are optimistic about the office sector in the Philippines, particularly as more international companies continue to come in, either to establish their presence or expand their operations here,” Megaworld executive director Kevin Tan said in a statement.

READ: Broad boom boosts Megaworld bottom line by 12% to P21.7B

“We see a significant spike in demand for office spaces, not just among BPO (business process outsourcing) companies, but even from traditional tenants as well,” Tan added.

According to Megaworld, new office developments will be built within its townships in Bulacan, Pampanga, Bacolod, Iloilo, Cebu, Davao and Metro Manila, with 50,000 square meters (sq m) in gross leasable area (GLA) set to open this year alone.

Last year, Megaworld opened office towers spanning around 60,000 sq m, bringing its total GLA in the office sector to 1.5 million sq m.

The company, whose portfolio also includes malls and hotels, wants to have a total office GLA of 2 million sq m by the end of the decade.

Megaworld’s office expansion comes amid the sector’s weakness in the National Capital Region, with vacancy reaching an all-time high of 19.4 percent last year, data from Colliers Philippines showed.

This is higher than the vacancy rates in other major metropolises, including Cebu (19.7 percent) and Davao (7 percent), as more companies and investors opt to set up shop outside Metro Manila.