MEGAWORLD Corp. is keeping its capital expenditures steady for 2018, after it booked a double-digit growth last year fueled by the strong sales from its residential, office, hotel, and commercial space leasing businesses.

In a statement issued Monday, the Andrew L. Tan-led firm said it will be allotting P60 billion for capital spending this year, the same amount it committed to spend in 2017.

About 80% of the 2018 capex will go to the development of residential, office, and commercial developments within Megaworld’s townships. The company will use the remaining 20% for land acquisition and other investment properties.

“The Megaworld Group is now present in more than 30 cities around the country. We will continue to be aggressive in developing more townships and integrated lifestyle communities across the country, most especially in the provinces,” Megaworld Senior Vice-President and Treasurer Francisco C. Canuto said in a statement.

The listed property developer’s continued spending followed the 12.7% increase in its attributable profit to P12.8 billion in 2017. Consolidated revenues of the company climbed 7.7% to P50.4 billion from 2016’s P46.8 billion.

The residential segment accounted from around 70% of the firm’s total revenues at P34.6 billion, up 4.5% year on year.

Megaworld’s rental business, covering office and commercial space leasing, saw the biggest improvement last year after jumping 18.2% to P11.8 billion.

“We are still way beyond our targets and we see this momentum to continue until we reach our P20-billion target in annual rental income by 2020, or even beyond that. There are still so much opportunities to tap in the property market and we are ready for that,” Mr. Canuto said.

Megaworld has earlier announced its target of generating P20 billion in annual rental income in the next two years. To achieve this, the company aims to have 28 shopping malls by 2020, from its current network of 15. Lifestyle malls will account for half of the P20-billion target, while offices will contribute the remaining half.

The company ended 2017 with a total of 23 integrated urban townships, containing more than 660 residential projects, 54 office towers, and 15 lifestyle malls. Among the company’s townships are the 35-hectare Maple Grove in General Trias, Cavite; McKinley Hill, McKinley West, Uptown Bonifacio, and Forbes Town in Taguig City, and Boracay Newcoast in Boracay Island.

Megaworld is the property arm of Alliance Global Group, Inc., which also has core interests in liquor, gaming, and quick service restaurants.

Shares in Megaworld lost 13 centavos or 2.79% to close at P4.53 each at the stock exchange on Monday, along with the main index that dropped by 0.48% to 7,932.38 due to lingering fears of a trade war. — Arra B. Francia

The post Megaworld sets aside P60 billion for 2018 capex appeared first on BusinessWorld.

This article was first appeared at bworldonline.com