Megawide forays into real estate, acquires property developer for P5.2B

Megawide Construction Corporation is entering the real estate development sector with the acquisition of a property developer, as the company eyes to diversify beyond its core construction and infrastructure ventures.

In a disclosure to the Philippine Stock Exchange on Thursday, Megawide announced its shareholders approved the acquisition of 100% of PH1 World Developers Inc. (PH1) from Citicore Holdings Investment Inc. (CHII) during its annual stockholders’ meeting held on July 12.

The company said it will acquire PH1 for a total consideration of P5.2 billion.

“The move is a natural progression of our construction and engineering unit into higher value-generating businesses and gives more momentum to our forward integration initiatives within the Group,” said Megawide chairman and CEO Edgar Saavedra, noting that progressing into higher value-added businesses has always been part of Megawide’s growth strategy when it started as a construction firm over two decades ago and diversifying into infrastructure development.

“Construction is an enabler for us to venture into more value-accretive platforms, such as airport and landport operations, and now property development, together with the related income sources and value that they deliver,” added Saavedra.

Megawide cites its Public Private Partnership (PPP) projects such as the Mactan-Cebu International Airport and Parañaque Integrated Terminal Exchange, which “unlocked other revenue streams that generated greater value for the company on top of construction.”

The acquisition, the company said, is expected to accelerate Megawide’s growth momentum and is also seen to enhance its order book quality “as this reduces counterparty risks from external clients, and turn in more efficient operations as project management is streamlined – boosting overall employee productivity in general.”

Megawide added it is expecting to generate more stable revenues, citing PH1’s long-term project visibility and availability, on the back of the property developer’s pipeline of vertical and horizontal developments such as My Enso Lofts in Timog, Quezon City; and Modan Lofts in Pasig and Taytay, Rizal. —KBK, GMA Integrated News