Megaworld raises rental income target for 2016

by: Webmaster | Feb 04, 2016 | 0
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Posted on January 25, 2016 08:44:00 PM

MEGAWORLD CORP. is raising its target for rental income this year, as the property firm owned by billionaire Andrew L. Tan aggressively beefs up its portfolio of leasing projects within its townships. 

 Megaworld expects the contribution from office towers, lifestyle malls and commercial centers to reach P11 billion this year, a growth of more than 20% from a year ago and higher than the original projection of P10 billion, the developer told the stock exchange yesterday.

The real estate firm said it will complete projects that will add a total gross floor area (GFA) of more than 650,000 square meters (sqm) this year to its portfolio of developments that will provide the company a steady stream of recurring revenues.
Shares in Megaworld added nine centavos or 2.75% to P3.36 each on Monday.

“We are on-track in strengthening our office and mall portfolio as we continue to experience robust demand for spaces, both office and retail, in our townships. Both our offices and retail spaces enjoy a very high occupancy rate of around 99% across our developments,” Megaworld Senior Vice-President Jericho P. Go was quoted in the statement as saying.

Rental income accounts for 20% of revenues, but its contribution increases to 40% at the net income level, Mr. Go had said last month.

At least 10 office towers in Uptown Bonifacio, McKinley West, The Mactan Newtown and Iloilo Business Park will be completed this year, adding a GFA of 287,500 sqm to its inventory.

Around 11 malls and commercial centers, on the other hand, will be completed in McKinley Hill, Uptown Bonifacio, McKinley West, The Mactan Newtown, Iloilo Business Park, ArcoVia City, Southwoods City and Makati by year-end. These new developments will have a GFA of around 371,000 square meters.

“Our malls and commercial centers primarily cater to our growing residents and BPO workers in our townships. Megaworld offers a ‘ready market’ to our retail partners,” Mr. Go said.

For example, the Megaworld executive said McKinley Hill is home to 80,000 business process outsourcing (BPO) workers and 12,000 residents, considered the primary customers of its projects such as Venice Piazza, Tuscany and the upcoming Venice Grand Canal Mall.

Megaworld has over 150 companies in its portfolio of office tenants, including some of the world’s biggest Information Technology-BPO companies such as Accenture, Wells Fargo, HP, IBM and United Health Group.

Megaworld is part of Alliance Global Group, Inc. -- the holding firm for Mr. Tan’s real estate, liquor, gaming and quick-service restaurant businesses. -- Krista Angela M. Montealegre

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