PROPERTY developer Megaworld Corp., a company led by billionaire Andrew Tan, said it has no plans of acquiring another company next year, with its capital expenditures (capex) returning to “normal.”
Kingson Sian, president of Alliance Global Group Inc. (AGI) and executive director of Megaworld, said the company will expand on all fronts from real-estate development to building more office towers for business-process outsourcing (BPO) firms.
“There’s no planned acquisition next year so it’s just a normal capex for Megaworld,” Sian said at the sidelines of Emperador Inc.’s special stockholders’ meeting.
Emperador is the liquor unit of AGI, the holding firm of all of Tan’s businesses.
“We just want to continue to develop [Megaworld] until we exhaust all our land bank. Eastwood City has been around since the 1990s, but until now it’s not finished and we are still developing it, making it bigger,” Sian said, referring to its first township development in Libis, Quezon City.
Sian, however, said the company has not decided yet on the possible merger with Suntrust Properties Inc., the low-cost housing arm. It now owns all of Suntrust, but it still has its own management team.
“We are still reorganizing the company [Suntrust] as there are still the private shareholders. We have not decided on it yet,” he said.
In June Megaworld said it will spend P230 billion from now through 2018, launching an average of at least 10 residential projects and six office towers annually.
For this year, it spent P40 billion, mainly for its construction projects.
Part of the said expenditures were spent to buy Global-Estate Estate Resorts Inc., which paved the way for its consolidation with Megaworld.
At the moment, 50 percent of Megaworld’s revenues still comes from real-estate sales and 40 percent from office rentals.
That will change by 2018 when revenues from office rentals will increase to about 50 percent, and real-estate sales will go down to between 40 percent and 45 percent, the company said.
By then, Megaworld will have 1 million square meters of office space from the current 712,000 sq m, adding an average of 100,000 sq m annually due to brisk demand from BPO companies.
The company reported a net income of P19.03 billion, about three times more than last year’s P6.52 billion as a result of the recurring gain from the acquisition and sale of a subsidiary.
Excluding the one-time gain, its income would have been at P7.42 billion, or an increase of 13 percent year on year.
VG Cabuag