Megaworld Corp., a leading urban township developer and the biggest lessor of office spaces, expects rental income to reach P20 billion by 2020 as it adds close to 1 million square meters of leasable space in its portfolio.
Megaworld said in a disclosure to the stock exchange the P20-billion rental income target was more than double the P9 billion profit generated in 2015.
The property giant said the 1 million sq. m. of additional rental inventory to be completed over the next three years would come mostly from office, lifestyle malls and commercial spaces that will be built within its 22 townships and integrated lifestyle communities across the country.
The additional area will bring the company’s total rental space inventory to more than 2.5 million square meters by 2020.
“While we remain strong in our residential condominium business, it is also imperative for us to also fortify our rental portfolio. This direction will not only allow us to become a stronger and more sustainable company, but at the same time, we address the increasing demand for these spaces in our various townships,” Megaworld senior vice president Jericho Go said.
Around 1.5 million sq. m. out of of the 2.5 million sq. m. leasable space by 2020 will come from office spaces and 1 million from malls and commercial centers.
“By the end of this year, we will breach the 1-million square meters of office space inventory as we continue to experience a demand for office spaces,” Go said,
Megaworld currently has over 130 companies in its office rental portfolio, occupying around 850,000 square meters of offices spaces, making it the biggest lessor of office spaces in the entire country.
Its office spaces also enjoy a high occupancy rate of 99 percent, while pre-leasing rates of office buildings that are still under construction stand at an average of 80 percent.
On the retail side, Megaworld plans to add 18 malls and commercial centers by 2020, covering close to 390,400 square meters of fresh retail spaces.
The company this year expects to complete 200,000 sq. m. of mall and retail spaces from various township projects.
“We see a continuing rise in consumer spending especially on food. While each of our townships has its own growing population, we have experienced influx of people visiting our townships because our lifestyle malls also become leisure attractions like the Venice Grand Canal,” said Kevin Tan, senior vice president and head of Megaworld Lifestyle Malls.