Alternative Investment Report

Megaworld’s office leasing up 12% despite restrictions

Southwoods Office Towers in Binan, Lagun

MEGAWORLD Corp. said it had surpassed its office lease target in the three quarters to September, with 214,000 square meters (sq.m.) of office take-ups logged despite quarantine restrictions.

In a disclosure to the exchange on Monday, the company said office leasing was 12% higher than the 191,000 sq.m. recorded by Megaworld Premier Offices in the same period last year.

“The demand still remains despite earlier speculations that the work-from-home arrangements will lead to massive vacancies,” said Roland B. Tiongson, first vice-president of Megaworld Premier Offices and president of MREIT Fund Managers, Inc.

“With eased restrictions and the reopening of our borders for international travelers, we are optimistic that we will be able to achieve a better full-year performance for our office leasing business this year,” he added.

New deals made up for 36% of the leases, which were mostly in Uptown Bonifacio, McKinley Hill, Southwoods City, and Davao Park District, and 79% of which are new take-ups from firms in the information technology and business process management (IT-BPM) sector.

Eastwood City, McKinley West, and The Mactan Newtown also recorded new office lease transactions.

“It is exciting to note that several tenants opted to retain their spaces, and even expanded during the pandemic,” Mr. Tiongson said.

Megaworld said 64% of the leases in the nine-month period were renewals of business process outsourcing (BPO) firms in Eastwood City, Uptown Bonifacio, McKinley West, McKinley Hill, and Iloilo Business Park.

In Iloilo Business Park, US-based BPO firm Nearsol renewed its lease on spaces in Three Techno Place spanning nearly 3,000 sq.m. Nearsol also signed up for around 2,000 sq.m. of additional office space in Two Fintech Place.

Over in Southwoods City in Laguna, one more US-based BPO firm, Valor Global, Inc., signed to lease three floors spanning almost 8,000 sq.m. of Southwoods BPO Tower 1 and another three floors with nearly 6,400 sq.m. in One Campus Place in McKinley Hill.

According to real estate consulting firm Leechiu Property Consultants, Megaworld has around 1.4 million sq.m. of leasable office space across its townships in the country.

The listed company said it is planning to build more office towers in the next 10 years in new townships, such as The Upper East in Bacolod City, Maple Grove in Cavite, Capital Town in Pampanga, and Northwin Global City in Bulacan.

Megaworld also plans to inject another 100,000 sq.m. of office assets into its real estate investment trust (REIT), MREIT, Inc., which currently has 10 office assets from its “three fastest-growing townships,” namely: Eastwood City, McKinley Hill, and Iloilo Business Park.

MREIT made its market debut earlier this month. For the quarter ending September, it recorded profits of P469.42 million, while its topline was at P711.2 million driven by higher rental income.

On Monday, shares of Megaworld at the stock exchange declined by 2.86% or nine centavos to close at P3.06 apiece, while MREIT inched up by 0.11% or two centavos to close at P17.82 each. — Keren Concepcion G. Valmonte

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