Megaworld—the property arm of billionaire Andrew Tan’s Alliance Global—will spend 30 billion pesos ($523 million) over the next five years to boost its office portfolio by 25% to two million square meters by 2030.
The investment also includes the upgrading and refurbishment of Megaworld’s existing offices across the country, the builder said in a statement on Monday. Megaworld currently has 1.6 million square meters of office space with 900,000 sqm in the Bonifacio Global City, an upscale commercial business district built on a former military camp just outside of the Makati financial hub.
Developers are building new offices outside of Metro Manila as office vacancies in the nation’s capital have risen after the government banned online gaming operators in the country. Office vacancy rates in the city are forecast by Colliers Philippines to climb to 22% this year, the highest in 18 years, according to estimates by Collier Philippines.
Megaworld said it will open another 50,000 square meters of office inventory in the central Philippine cities of Bacolod, Iloilo, and Cebu during the year. The builder said earlier this year it added 60,000 square meters of gross leasable area of offices in areas outside of Metro Manila amid growing demand from business process outsourcing (BPO) companies.
“We are optimistic about the office sector in the Philippines, particularly as more international companies continue to come in, either to establish their presence or expand their operations here,” says Alliance Global CEO Kevin Tan, the billionaire’s heir-apparent. “We see a significant spike in demand for office spaces, not just among BPO companies, but even from traditional tenants.”
Apart from Megaworld, the older Tan also has interests in distiller Emperador, the world’s biggest brandy maker; the Philippine franchisee of McDonald’s and a casino resort. Tan, 73, has a net worth of about $1.5 billion, according to Forbes’ real-time data.
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