September 18, 2014

MEG unit ventures into industrial park development

In a disclosure to the Exchange, Megaworld Corp today announced that its wholly-owned Suntrust Properties Inc will venture into industrial park development. Billed as Suntrust Ecotown, the project involves the mixed-used development of a 200-hectare land in Tanza, Cavite which has been accredited by the Philippine Economic Zone Authority.

It is envisioned to cater to world class light to medium export-oriented industries. It will also have a component for residential, commercial and institutional establishments. Suntrust will spend P5b over eight years to develop the property.

About 111 hectares will be allotted for the industrial park and the company will initially offer 107 industrial lots. It is looking to expand the entire project site to 350 hectares.

Our take: The industrial estate development foray by MEG should complete its property development portfolio. This also comes timely given that the accelerating economic growth pace should soon spur demand for industrial estates for which there is limited supply at the moment. This should not only provide another source of revenues for the group but also support the company’s overall margins as industrial lot sales usually yield higher margins. – Ricardo Puig