Megaworld secures full ownership of Suntrust Properties

MANILA, Philippines - The flagship developer of property tycoon Andrew L. Tan has secured full ownership of its affordable housing unit for almost P590 million.

“Megaworld acquired the stake of Empire East Land Holdings Inc. and Suntrust Home Developers Inc. in affordable housing developer Suntrust Properties Inc., making the latter a wholly owned subsidiary of Megaworld,” the property giant told the local bourse.

It acquired a total of 393.75 million shares of Suntrust Properties at book value for a total acquisition price of P589.04 million.

Specifically, Megaworld said it bought 78.74 million Suntrust Properties shares worth P117.8 million from Suntrust Home Developers while Empire East sold all its Suntrust Properties shares or 315 million shares valued at P471.23 million.

As of end-March, Megaworld controlled 88.27 percent of Suntrust Properties.

Suntrust Properties, which was incorporated in 1997, has created numerous residential communities in Dasmariñas, Gen. Trias, and Silang, all in Cavite.

It is also the developer behind Adriatico Gardens in Malate, Manila; Suntrust Parkview in Ermita, Manila; and Capitol Plaza in Quezon City.

Early this year, the property arm of conglomerate Alliance Global Group Inc. (AGI) committed to spend a record P35 billion for its property projects this year amid the property boom, up from P25 billion in 2012.

The Megaworld group, which is composed of three brands Megaworld, medium-cost housing arm Empire East Land, and Suntrust Properties, plan to launch at least 10 new projects in the first half given robust demand.

Like other real estate firms, the listed firm is benefiting from low interest rates that spur home loans, increasing income of the middle class, high demand amid a backlog, and growth in the office segment driven by the outsourcing industry.

In the first quarter of this year, profits of Megaworld jumped 15 percent to P1.79 billion on the back of brisk property sales.

In more than 20 years of operations, the Megaworld group has completed more than 240 residential and office buildings with a total floor area of around six million square meters.

Megaworld is the property arm of AGI, which is also into liquor (Emperador Distillers, Inc.), fastfood (McDonald’s franchise operator Golden Arches Development Corp.) and hotels and casino (Travellers International Hotel Group Inc.).