Property developer Megaworld Corp. plans to borrow at least P15 billion this year to partially finance this year’s P65-billion programmed capital spending.
Megaworld first vice president Jericho Go said in an interview the company would take advantage of the current low interest rates to raise funds for real estate projects, including land banking activities.
“Our debt to equity is so small. We have a lot of leg room to raise debt,” Go said.
“Our gearing rate is low compared to our competitors that are heavily leveraged. Interest rates are also very low,” he said.
The property firm said it was studying the timetable for the fund raising activity.
Go said the company expected to generate P9 billion in recurring revenues this year, up from more than P7 billion in 2014, which would also help finance this year’s capital spending.
Recurring revenues will primarily come from leasing business, including mall and office developments, as well as hotel business.
Megaworld increased its five-year programmed capital spending to P285.8 billion from an initial estimate of P230 billion, as it plans to launch new townships and expand existing mixed-use developments.
Megaworld allocated P65 billion this year to build more residential and hotel projects, office buildings as well as malls and commercial centers inside integrated urban townships.