MANILA – Megaworld Corp. expects strong residential sales this year driven by robust demand and the strength of the domestic economy.
On the sidelines of the company’s annual stockholders meeting, Kingson Sian, Megaworld executive director and senior vice president, said reservation sales may hit P35 billion this year, 40 percent higher than the P25 billion registered in 2011.
At end-March, the upscale property developer had reservation sales of P10.4 billion, nearly a third of its target.
“We continue to be very optimistic about the property sector. We’re launching more this year. If last year was good, this year we see it’s going to be better,” said Sian.
Megaworld is set to introduce 11 residential projects in the first half of the year, topping the nine developments launched for the entire 2011.
Reservation sales of the Megaworld Group, which also includes Empire East Land Holdings Inc., Suntrust Properties Inc. and Global-Estate Resorts Inc., is expected to grow by 48.6 percent to P55 billion.
Sian said it will be difficult to quantity the effects of the slowdown in the US and Europe, but direct sales abroad account for less than five percent of total sales.
Strong sales and rental income, which may hit P4.5 billion, will fuel the double-digit growth in Megaworld’s net income this year, Sian said.
In the first quarter, its net earnings rose by 27 percent to P1.58 billion.
“It may vary from quarter to quarter, but if you look at the overall direction, it will definitely be a double-digit growth with or without a crisis. It just underscores the strength of the ‘live-work-play-learn-shop’ business model. I’m not saying it’s crisis-resistant, but it’s very resilient,” said Sian.
Andrew Tan, Megaworld chairman, said during the stockholders
‘ meeting that the increasing income from a slowly stabilizing economy has fuelled growth in residential property sales, while the continued influx of foreign investors establishing job outsourcing businesses in the country has driven office space sales and rentals upward.
Megaworld has over 230 hectares of land bank, mostly situated in prime locations in Metro Manila, which will be sufficient for development over the next 15 years.
The company has a land bank of 54 hectares in Iloilo and 25 hectares in Cebu and may consider expanding in new areas if opportunities become available.
“We are constantly looking for opportunities, but of course with our strong land bank position and the quality of our land bank, we are not pressured to look for and acquire land,” said Sian.