Underpinning this resilience is its integrated township model, which combines residential, retail, and office spaces.
For these reasons, stockbrokerage house First Metro Securities (FMS) has restarted its coverage on Megaworld, which it described as “extremely undervalued.”
FMS Research assigned the property developer a “Buy” rating with a 12-month price target of P2.80 per share.
This is a 39 percent upside from the time the report was released on July 18.
“We like MEG for its integrated township model, which is its core competitive advantage, enabling it to capture value across multiple real estate segments,” stated the report, which was prepared by the FMS’ research team led by Mark Angeles alongside Nicole Aquino.
Office sector stronghold
Megaworld has weathered the post-pandemic and post-POGO downturn that kept overall vacancies in Metro Manila elevated.
“MEG is a top-of-mind lessor by BPOs and multinational tenants due to its high-quality offerings in strategic locations,” FMS Research said.
“This drives consistent foot traffic and day/nighttime population within its townships, creating powerful synergies that support both residential demand (as employees seek housing near workplaces) and mall performance (through steady consumer activity),” it added.
The firm’s residential segment also remains “on a solid footing” thanks to its township strategy.
“Inventory levels are the lowest among peers, at just 13-14 months, with 35 percent ready-for-occupancy (RFO) units,” FMS Research said.
“Within Metro Manila, MEG’s exposure to BGC and McKinley Hill, i.e. areas with relatively healthier supply-demand dynamics, further supports absorption and pricing,” the stock brokerage house added.
