Megaworld Corp (PSE: MEG) has just announced that it's expecting to make as much as P20 billion in rental income by 2020. It is also close to reaching almost one million square meters of fresh rental inventory as it continues to strengthen its rental portfolio in the country.

Expanding rental portfolio is the way to go 

"While we remain strong in our residential condominium business, it is also imperative for us to also fortify our rental portfolio," Megaworld Senior Vice-President Jericho Go said in a recent statement. "This direction will not only allow us to become a stronger and more sustainable company but at the same time, we address the increasing demand for these spaces in our various townships," he further explained.

Currently, the company has several townships throughout the country, including Alabang West, Boracay Newcoast, Davao Park District, Eastwood City, Forbes Town Center, McKinley Hill, Newport City, Northhill Gateway, Sta. Barbara Heights, Suntrust Ecotown, The Upper East and Twin Lakes. 

To support its ambitious goal, Megaworld has also said it plans to have a total rental space inventory of more than 2.5 million square meters by 2020. This is why the company is aggressive about completing one million square meters for fresh rental inventory in just a span of three years. This will be composed of mostly lifestyle malls, commercial spaces and office spaces, which will be spread across its 22 townships and integrated lifestyle communities. This will allow the company to not just strengthen its position in the market, but make its business more sustainable while addressing current demands. This is especially vital as the company is forecasting significant growth. 

More Townships To Come

"On the commercial side, as population in all of Megaworld townships is expected to also balloon to 1,000,000 by 2020, we expect a tremendous growth in consumer spending especially on food, so we are prepared to address that," Go said. For 2017, Megaworld plans to open several more retail spaces and commercial spaces in the country. These include ArcoVia City, McKinley West, Uptown Bonifacio, Southwoods City, Iloilo Business Park and the Mactan Newtown. Aside from this, the company also plans to open several properties in Makati Central Business District (CBD). Together, these will cover as much as 200,000 square meters of gross floor area. 

Megaworld currently boasts of having more than 130 companies in its office rental portfolio. According to a report from Rappler, some of the company's office tenants include large business process outsourcing (BPO) companies, including Hewlett-Packard (NYSE: HPQ), International Business Machines Corporation (NYSE: IBM), UnitedHealth Group Inc (NYSE: UNH), Wells Fargo and Company (NYSE: WFC) and Accenture ACN (NYSE). Together, these occupy as much as 850,000 square meters of office spaces.  Megaworld also enjoys a high occupancy rate of 99 percent. Meanwhile, its pre-leasing rates for office buildings still under construction have an average of 80 percent.

What do you think of Megaworld's P20 billion rental income target? Let us know in the comments section below.

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