MANILA, Philippines – Andrew Tan-led Megaworld Corp will merge all its property units, almost similar to what Henry Sy-led SM Prime Holdings Inc did. A major difference is that Megaworld will keep its different brands independent and separately listed.
Speaking at Megaworld’s annual stockholders meeting on Thursday, July 18, Megaworld’s SVP Kingson Sian stressed that while the units will be consolidated under its flagship brand Megaworld, they will still be separately listed.
“Our plan is to keep them separately listed but with the increased stake we can consolidate it back to Megaworld and we’ll keep each of the companies independent,” said Sian.
Real estate tycoon Tan announced on June 21 that he was consolidating his group’s property units: leisure estate unit Global-Estate Resorts Inc (GERI), middle-income residential development unit Empire East Land Holdings Inc (ELI) and affordable homes developer Suntrust Properties Inc. under Megaworld Corp.
“Megaworld seeks to consolidate the real estate businesses of its affiliates under the Megaworld brand to better capitalize on real estate opportunities and capture the expected growth momentum of (subsidiaries) within the next 5 years,” the company said in a disclosure to the Philippine Stock Exchange.
The SM model
This move came weeks after Henry Sy-led SM group folded its mall, residential, office and hotel development business units into SM Prime Holdings.
SM officials have cited wanting to benefit from economies of scale, stronger asset base, and synergies as reasons to pursue a merger. They also wanted to create a corporate vehicle that would make the group more attractive to big investor groups.
As part of the merger, the SM Prime and the unlisted developer SM Land are consolidating theirs stakes in the publicly traded shares of residential property developer SM Development Corp. (SMDC) and leisure developer Highlands Prime Inc.
Shareholders of Highlands and SMDC have aready approved the firms’ voluntary delisting.
Megaworld has been on a rapid expansion plan with its ‘Live, Work, Play’ development concept.
The developer plans to roll out 25 new residential projects this year equivalent to 10,000 to 12,000 units and aims to double rental income to P10B from P5B in the next 5 years .
In the first half of 2013, they launched 14 projects which boosted their reservation sales by 27% year on year to P38 billion.
According to Sian they are on track for the P70 billion in sales expected for the full year.
Tan’s Megaworld group reported strong sales in the first half of 2013 to P38 billion, up 27% year-on-year. The reservation sales came from luxury brand Megaworld, Empire East Land Holdings and Suntrust Properties. – Rappler.com