ALLIANCE Global Group, Inc. (AGI) is ramping up its investments to P240 billion until 2020, pushing the expansion of its property, liquor, gaming, and quick- serviced restaurant businesses in the next three years.
The holding firm of tycoon Andrew L. Tan said bulk of the spending
will be for property unit Megaworld Corp. and gaming firm Travellers
International Hotel Group, Inc. (TIHGI), which will both be pursuing
several residential, office, mall, and hotel projects during the period.
“Megaworld and Travellers, those two will have the largest share in
capex requirement. Bulk will be the residential, office, and then the
completion of our phase 3 (for Resorts World Manila), and the start of
Westside City,” AGI President and Chief Operating Officer Kingson U.
Sian told reporters in a briefing after the company’s annual
stockholders’ meeting in Eastwood City yesterday.
The capital spending will support Megaworld’s goal to have 1.5
million square meters (sq.m.) in leasable office spaces by 2020.
Recently, the listed property giant signed deals with United
States-based firms JPMorgan Chase Bank and Factset to build their local
headquarters here, spanning a combined footprint of 120,000 sq.m.
The company further aims to have 28 lifestyle malls covering one million sq.m. of gross floor area by 2023.
For TIHGI, the capex will finance the third phase of Resort World
Manila (RWM)’s expansion program, where the company will add new
international hotel brands Hilton, Sheraton, and Okura, as well as a
Grand Wing for casinos.
Both Megaworld and TIHGI will also be funding the development of the
integrated leisure and tourism estate called Westside City, located
along the state-run Entertainment City in Parañaque City.
Megaworld earlier said it will spend P54 billion over the next 10
years for the 31-hectare Westside City, which will house residential,
hospitality, and retail components. Meanwhile, TIHGI has allocated $1.1
billion for the integrated resort and casino called Westside City
Resorts World Complex inside the township.
Ongoing developments at Westside City will support AGI’s goal to have
12,000 hotel keys by 2020, more than thrice its current portfolio of
3,198 hotel rooms — mostly in RWM. The company noted that at least 1,000
of these hotel rooms will be located in Westside City, while the others
will be spread out across their various townships.
Mr. Sian said they expect to start construction for Westside City by
next year, as the group is already working on the final touches for the
re-masterplanning.
For the liquor business, Emperador, Inc aims to expand its portfolio
through more product introductions such as Shackleton, Terry White, and
Fundador Double Light, among others. This will improve the company’s
presence in the 102 markets where its products are currently available.
Golden Arches Development Corp., the master franchise holder of the
McDonald’s brand in the country, will also continue its expansion to hit
1,000 stores in the following years. Mr. Sian noted that they have been
opening 50-55 stores in the past two years, compared to its previous
average of 25-30 stores. This will bring the company closer to its
target faster.
AGI Chief Executive Officer Kevin Andrew L. Tan said most of the
capex will be funded by internally generated cash and some borrowing.
“Be assured though that we will always maintain financial prudence
and keep our gearing at reasonable level,” Mr. Tan said, adding that
AGI’s net debt-to-equity at the consolidated level stood at 38% as of
end-June, versus 41% in 2017.
AGI booked an attributable profit of P7.86 billion in the first six
months of 2018, after gross revenues went up seven percent to P70.07
billion.
Shares in AGI slipped by eight centavos or 0.64% to close at P12.36 each at the stock exchange on Tuesday. — Arra B. Francia
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