Residential property dev’t seen to boost Citicore performance
Citicore Holdings Investments Inc., the parent firm of construction and engineering conglomerate Megawide Construction Corp., is betting big on residential property development as one of the new growth drivers for the group in the years ahead. Megawide is helping its parent firm pursue more property development, alongside other “high-growth” new businesses by issuing a corporate guaranty of P4.5 billion.
In a disclosure to the Philippine Stock Exchange, Megawide said this guaranty was deemed a “regular corporate transaction to provide assistance, as needed, to new and other businesses to help them mature and produce strong and predictable cash flows to become stable and consistent contributors” to the group. Megawide seeks to harness opportunities in real estate development, particularly in the affordable housing segment and mid to high-end residential developments alongside other high-growth potential and fast-growing industries, the disclosure said.
Overall, the objective is to support Megawide Group’s “long-term goal of strengthening its portfolio to provide additional legs for next level of growth.”In a text message, Megawide president Edgar Saavedra explained that the group would like to expand its presence in the robust real estate market.
For middle- to high-end residential development, Saavedra said Citicore could pursue both vertical and horizontal developments in strategic locations through wholly-owned subsidiary Ph1World Developers (Formerly Myspace Properties).
In affordable housing, he said Citicore could become a more significant player, using its own brand or through design and build contracts.
Citicore also seeks to develop its own market niches in other high-growth and fast-growing industries, through joint ventures or partnerships. The goal is to expand and enhance existing capacities and capabilities to deliver incremental value, Saavedra said.
As Citicore gets more and more projects, Megawide is seen to benefit by increasing its order book as it “becomes a builder of choice for all projects related to these businesses,” Saavedra said.
“We did similarly when we did the 10,000-classroom [public-private partnership project] for the Department of Education in 2013, wherein Citicore was the proponent and it awarded the construction contract to Megawide,” Saavedra said.
Furthermore, Megawide is expected to book finance income through a guaranty fee to be paid by Citicore.
Aside from property development, Citicore has interests in the renewable energy business. Citicore Holdings Investments Inc.