Local debt watcher Credit Rating and Investors Services Philippines Inc. (Crisp) on Friday reaffirmed its “AAA” issuer rating for property developer Megaworld Corp.
In a statement, Crisp said that its rating on the publicly listed firm reflected the company’s “sustained levels of strong business performance, dominance in high-growth segments of the real estate market and an effective land-banking strategy.”
“Crisp assigned a stable credit outlook for Megaworld’s issuer rating as [we] continue to believe that Megaworld’s continued strong business performance and a positive real estate industry outlook, particularly for the BPO market, will be sustained,” the debt watcher added.
In its most recent disclosure, Megaworld reported a 14.8-percent increase in core net income, boosted by its continued growth in real estate sales and robust office rental income. In the first half of 2012, Megaworld’s real estate sales and rental income grew 10 percent and 38.5 percent, respectively, compared to the same period in 2011. Real estate sales and rental income make up 75 percent of Megaworld’s total revenues.
A recent report by CB Richard Ellis Philippines had Megaworld topping the competitive real estate market with a 15.6-percent and 16.5-percent share, respectively, of the total residential condominium units and aggregate saleable area brought on line from 2000 to 2011.
Megaworld has developed 1.9 million square meters over the same period, the ratings firm said. This year, anticipated challenges from competitors would cause Megaworld’s market share to decline slightly, but was expected to remain on top in both categories, it added.
Crisp credited Megaworld’s effective land-banking strategy that gave it access to approximately 180 hectares of land in strategic locations in Metro Manila, allowing it “to meet the growing market demand and stiff competition for real estate buyers and office locators.”
Controlled by real estate and gaming tycoon Andrew Tan, the firm has earmarked P25 billion for capital spending this year.