Megawide Construction Corp. (Megawide) is making its foray into the realm of property development after its 100 percent acquisition of PH1 World Developers Inc. (PH1), the real estate arm of Citicore Holdings Investment Inc.
Shareholders approved the acquisition during Megawide’s Annual Stockholders Meeting, held virtually last July 12. Megawide will buy PH1 for P5.2 billion, along with 579.5 million common shares.
Megawide chairman and CEO Edgar Saavedra described the acquisition as an “intuitive move,” noting how his company is adept in the world of construction and real estate.
“We have been doing the business for the last 26 to 27 years, we are very familiar with the market,” he said. “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.”
A progressive venture
Saavedra and his team who put up Megawide as a construction firm in 1997 have always envisioned themselves at the forefront of infrastructure development, armed with their strategy to progress toward higher value-added business.
Their projects under Public Private Partnership (PPP) such as the Mactan-Cebu International Airport and Parañaque Integrated Terminal Exchange have opened many doors toward other revenue streams that widened their specializations apart from construction.
“Construction is an enabler for us to venture into more value-accretive platforms, such as airport and land port operations, and now property development, together with the related income sources and value that they deliver,” Saavedra said.
Growing through real estate
Megawide’s acquisition of PH1 is expected to accelerate the former’s growth momentum in finances and generate more stable revenues to PH1’s plethora of vertical and horizontal developments.
Saavedra added that margins for real estate development are higher compared to that of construction and can reach multiple digits. With this venture, the recently-acquired PH1 is set to target affordable housing for their target market, addressing the gaps of the Philippine housing system.
“These gaps are what aim to fill through the synergy of Megawide and PH1. We will work to create an innovative and competitive product that will be appreciated by our target market,” he said. “We will try to target lower to mid-income levels but the majority of the product would be below mid income level.”
At present, PH1 has four existing projects: The Hive in Taytay, Rizal, MyEnso Lofts in Quezon City, Modan Lofts Ortigas Hills in Taytay, Rizal, and Modan Lofts Pasco in Pasig City. They will also have future developments in Imus, Cavite and San Jose Del Monte, Bulacan.
Their projects, which initially aim to target young professionals, as well as upgraders and start-up families, aims to “disrupt” the property industry by introducing an innovative engineering technology known as AddLoft, utilizing every unit’s high ceiling to expand its usable area.
Giving “extra space at no extra cost,” PH1’s AddLoft helps create additional space in the units, which can be customized and personalized depending on the user and his/her/their lifestyle.
“This is our ideal development. We don’t want to make it too dense,” Saavedra said during a PH1 media roundtable last December 2022.
Last year, PH1 reported a 108 percent sales growth, surpassing their sales targets and attracting clientele from different parts of the Philippines and the world.