January 12, 2015

MEG, GERI report brisk sales in Alabang West township project

In their disclosures to the Exchange, Megaworld Corp (MEG) and Global-Estate Resorts Inc (GERI) reported brisk sales in the 62-hectare township development billed as Alabang West which was launched last October.

Both companies said that almost half of the 788 available residential lots for sale have been sold, prompting the companies to launch another phase of the upscale residential village project. They are also anticipating prices to rise by 25% to 30% this year from the initial price which ranged from P47,000/sqm to P55,000/sqm.

Our take: We have maintained that MEG’s consolidation of GERI (now 80.4%-such as Cebu, Davao, Iloilo and in provinces outside Metro Manila) bodes well for will ease in Metro Manila where the bulk of MEG’s projects are located.

It should owend yMEG) will lead to synergistic collaboration given that MEG can offer its extensive experience in real estate development and marketing acumen to developand sell GERI’s extensive landbank. More importantly, MEG’s geographical expansion outside of Metro Manila (it now has ongoing projects in key growth areas both growth and valuation.

This should enable the company to take advantage of growth opportunities in growth regions and will limit its vulnerability in case growth also benefit from the reflation of GERI’s land assets as these are developed by MEG. – WealthSec