Megaworld Annual Report 2012
A year of Impressive growth. The year 2012 was indeed a year of growth, in more ways than one. For one thing, the year saw the Philippine economy grow by an impressive 6.6% due, mainly, to the robust performance of the trade, services,
real estate, and construction sectors. The economy actually did better than even the brightest forecasts from market analysts and media agencies, which was an achievement in itself.
The Philippine economy’s impressive growth in 2012 was driven, more than anything else, by increased private sector activity and heightened consumer spending, particularly in the fourth quarter of the year as inward remittances from our overseas Filipino workers expectedly fueled holiday spending. An 8.7% surge in private investments for the year also helped drive economic activity and, consequently, growth.
Another piece of good news is that 2012 also saw an unprecedented boom in the Philippine real estate sector, something the country had not experienced in almost 20 years. According to reports from the National Statistical Coordination Board, the real estate sector posted a growth of 28.1% in the first quarter of the
year alone, outpacing major Philippine industries and setting the tone for the sector’s fine performance for the whole year.
In 2011, Megaworld outdid itself and turned in another sterling performance, riding the crest of an increased demand for your Company’s BPO office spaces and the continued strong sales performance of its integrated townships. During the year, consolidated net income amounted to P8.16 billion, a gain of 60.37% from the previous year’s net income of P5.09 billion.
Amid this backdrop, Megaworld turned in an equally impressive performance in 2012 as demand for our world-class townships and first-rate BPO office spaces continued to rise. During the year, consolidated net income amounted to P7.41 billion, a hefty 24% increase from the 2011 consolidated net income of P5.98 billion, net of the P2.18 billion non-recurring gain from the sale of investments.
Consolidated total revenues composed of real estate sales, rental income, hotel income, and other revenues also grew by 16%, excluding the 2011 non-recurring gain on sale of investments. The bulk of generated consolidated revenues came from the sale of condominium units amounting to P18.17 billion in 2012, a 14% increase from P15.89 billion in 2011.
In turn, rental income for the year contributed 16% to our consolidated revenue figure and amounted to P4.99 billion, a huge 31% increase from the P3.83 billion in rental income in 2011. Contributing to the growth in rental income are the escalation and completion of additional leasing properties and the increased
demand for our office spaces from BPO companies.
I am happy to report that Megaworld is still the leading BPO office developer and landlord in the country, a distinction that we have worked hard to achieve and maintain. As the Philippines continues to be one of the prime destinations of investors looking to put up job outsourcing firms, Megaworld also continues to provide first-class, modern office spaces that perfectly fit the needs of BPO companies. It is testament to our foresight. Long before the actual BPO boom happened in our
country, we were already putting up office spaces that were designed to effectively accommodate the modular office layouts of BPO firms. As of end-2012, we had a total BPO office space inventory of more than 450,000 square meters, the largest in the Philippines.
Indeed, we have been doing excellently in our BPO office space developer and landlord tasks. However, our flagship products are our fully integrated townships which, I am proud to say, continue to draw buyers and investors. Our pioneering “live-work-play-learn-shop” development concept has succeeded in making our communities stand out in terms of convenience and comfort. This has made our townships all the more attractive to Filipino families.
Our real estate projects have been highly successful in Metro Manila which is why we have decided to extend our reach and start building new
communities in provincial growth centers, starting with Cebu and Iloilo
In line with this, we recently launched a new township project in Cebu that is aptly named The Mactan Newtown, our first major community
development outside Metro Manila. Mactan Newtown is a sprawling 25-hectare mega-community and, much like our other townships, effectively combines high-quality office spaces, luxury condominiums, leisure amenities, retail shops, a modern hotel, and a business park in one setting.
We also launched a major real estate project in Iloilo City, the business and commercial center of Western Visayas. We will call the township the Iloilo Business Park, a sprawling 72-hectare mixed-use development project in Mandurriao, Iloilo City. Upon completion, the Iloilo Business Park will have worldclass hotels, a commercial area, a modern lifestyle mall, BPO office buildings, and a convention center that can accommodate thousands of people at a time.
Aside from these two provincial projects, we are also currently developing Uptown Bonifacio in Bonifacio Global City under a joint venture arrangement with the Bases Conversion and Development Authority. The 15-hectare Uptown Bonifacio is our newest township project in the area and is envisioned to be
a large community of modern condominiums, offices, and retail establishments.
There is also the McKinley West project, which is a 34.5-hectare mixed-use community development located in the former Jusmag property in Fort Bonifacio, behind Forbes Park. It is one of the largest projects of Megaworld by far. We will be investing around P22 billion over the next 20 years to develop the huge McKinley West property, and around 60 percent of the entire area will be used for residential development projects, while the rest will be used for leisure amenities, access
roads and wide open spaces with lush greenery. This project brings our total development portfolio in Bonifacio Global City to around 105 hectares.
All in all, Megaworld has initiated new major projects in 2012, complementing all the ongoing projects that have been launched in previous years.
As we gear up for more challenges and opportunities in the years to come, we look back and see how far we have gone in our journey to build a solid foundation for long-term growth and sustainability. We have grown exponentially since our beginnings and have undeniably made our mark in the property development industry. We, however, are not resting on our laurels.
We are sure that the new projects we launched in 2012 and the existing communities we continuously expand will help us keep our position as the largest residential condominium property developer and the leading BPO office space developer and landlord in the country.
Moreover, we are excited about the prospects that a steadily improving economy brings. Not only will this encourage greater investor confidence in our country, it will also allow our target markets to be more capable of purchasing their dream homes. For our part, we will always be ready to provide
whatever our target markets want and need.
In the coming year and beyond, we will continue to do what has worked for us in the past. We will strive to keep growing by launching new projects, tapping new markets, developing new land, and offering new conveniences. We will also continue to be on the lookout for new investment partners who share our
vision of growth and development. Finally, we will make sure that Megaworld remains committed to reshaping and enhancing the Philippine landscape.