Megaworld plans $100-M bonds

Upscale property developer Megaworld Corp. plans to issue as much as $100 million in dollar-denominated bonds to raise funds for the development of various projects, according to market sources.

Although no other details were given on the proposed bond issuance, the sources said investor presentations will be held in Hong Kong and Singapore to drum up interest on the bonds.

UBS Investment Bank has reportedly been appointed as sole lead manager for the bond issue.

Just recently, Megaworld completed the sale of over $100 million worth of shares in both the local and international markets. Around P2.5 billion of the proceeds will be used for the construction of McKinley Hill Cyberpark and Mckinley Hill Town Center, while another P2 billion will be channeled to the 1800 and 1880 Eastwood offices and the Eastwood Mall.

McKinley Hill is a township located on 50 hectares of land in Fort Bonifacio in Taguig. It is being designed to include the McKinley Cyberpark, which will be a PEZA-designated information technology special economic zone, a low density residential subdivision for single-detached homes, low-rise residential garden villas, a leisure and entertainment area and an institutional area expected to include an embassy and educational institutions, including two international schools.

Megaworld reported a 43 percent growth in net profit last year to P1.15 billion, driven by higher sales from its residential projects and rental revenues. Revenues grew 19.3 percent to P5.32 billion.

Rental income likewise increased by 20.5 percent to P547.82 million from P454.65 million in 2004.

Eastwood City, Megaworld’s flagship project, accounted for bulk of the rental earnings, with its Cyber One office building and City Walk 2 leisure strip posting strong occupancy levels last year.

Eastwood City is a 16-hectare cyberpark. It is host to nearly one in every four business process outsourcing firms in the country, including the call center operations of IBM and Citibank N.A.

Megaworld expects to perform better this year, banking on new residential projects Fort Bonifacio-Bellagio, Forbeswood Parklane and McKinley Hill Village, and The Residential Resort at Newport City at Villamor Air Base in Pasay City.

Bellagio and Forbeswood Parklane are part of the P15-billion Forbes Town Center at the Global City.

The Residential Resort, meanwhile, is a low-density, 1.7-hectare community close to the Villamor golf course.

Megaworld focuses on the middle to high-end residential and office markets. It also has 43-percent owned subsidiary Empire East that caters to the lower- to middle-income market segment.

The company has a landbank of one million square meters, good for seven to 10 years of development excluding potential joint ventures.

Apart from property development, Megaworld is also into hotel operations through Prestige Hotels & Resorts Inc., a subsidiary which operates the Richmonde Hotel in the Ortigas Center.