Property developer Megaworld Corp. said Thursday net income increased 18 percent in 2019 to P17.9 billion from P15.2 billion in 2018 on double-digit growth in leasing and residential revenues.
Megaworld said in a disclosure to the stock exchange consolidated revenues grew 17 percent last year to P67.3 billion from P57.4-billion in 2018. Rental business posted another record growth of 18 percent to P16.8 billion from P14.3 billion in 2018.
It said office leasing business primarily contributed to the record growth in rentals, as it increased 20.5 percent to P10.5 billion from P8.7 billion the previous year.
Megaworld completed around 192,300 square meters of new leasable office spaces in 2019, bringing the total office inventory to 1.3 million sq. m.
“Undoubtedly, our strongest rental business still comes from our leases of prime office spaces across the Philippines. This excludes the office spaces that we have already sold and are currently selling. The good news is that we still continue to see growth in the business process outsourcing and information technology sectors, which comprise majority of our office rentals to date,” said Megaworld chief strategy officer Kevin Tan.
“Also, I would like to point out the growth in the demand for office spaces outside of Metro Manila, in which we are in the best position to provide to space seekers because of our adequate office inventory in the provinces including those that are still in our pipeline,” Tan said.
The property firm is continuously building more office towers, primarily to cater to the growing BPO sector in Iloilo, Bacolod, Davao, Cebu, Cavite, Laguna and Pampanga.
The company is also building additional office developments in its various townships in Metro Manila such as McKinley West and Uptown Bonifacio in Taguig and Arcovia City in Pasig City.
“This remains to be a very strong sector and very sustainable, and even with the emergence of Artificial Intelligence (AI), we will also see the emergence of new companies that would require spaces,” said Tan.
Revenues from mall business went up by 14 percent to P6.3 billion in 2019 from P5.5 billion in 2018.
The group completed around 20,600 sq. m. of retail spaces in 2018 to end the year with a total leasable space to 453,000 sq. m.
Residential sales also jumped 12 percent in 2019 to P42.6 billion from P38 billion in 2018 as reservation sales hit a record P149 billion
It launched around P85 billion worth of new projects, mostly residential, and two new office projects for sale.
Hotel business booked a 67-percent increase in revenues to P2.5 billion from the previous year’s P1.5 billion.
The company opened three new hotel properties: the 93-room Hotel Lucky Chinatown in Binondo, Manila; the 442-room Belmont Hotel Boracay in Boracay Newcoast, Aklan; and the 547-room Savoy Hotel Mactan in Mactan Newtown, Cebu.
“Megaworld still has the lowest financial gearing among the major listed property companies. We ended 2019 with a net debt-to-equity ratio of 26 percent, even lower than its 2018 level of 31 percent as gross debts stood unchanged during the year. This should give us more elbow room to lever up once the situation improves, likely by next year,” Tan said.
