SMDC allots P71B for residential projects

By Neil Jerome C. Morales (The Philippine Star)

 1  0 googleplus0  0 

SMDC ANNUAL STOCKHOLDERS’ MEETING: SMDC vice chairman Henry T. Sy Jr. (right) exchanges a few words with Henry Sy Sr., chairman of SMDC, before the start of the stockholders meeting yesterday at the SMX Convention Center in Pasay City.       MIKE AMOROSO

MANILA, Philippines - Condominium builder SM Development Corp. (SMDC) will spend P71 billion to complete existing projects and enter new property ventures in the next three years, top company officials said yesterday.

“In the next three years, SMDC will spend P71 billion to drive its expansion activities,” said newly-appointed SMDC president and chief operating officer Jeffrey Lim.

The residential arm of the country’s richest man Henry Sy has a considerable landbank in Metro Manila good for the next five years, he said.

“For the year 2013, SMDC will spend approximately P20 billion in capital expenditures – P13 billion for project development and P7 billion for landbanking,” Lim said.

It will be followed by P26 billion and P25 billion spending in 2014 and 2015, respectively.

“For 2013, we plan to launch four new projects and expand three existing developments in Metro Manila,” said SMDC vice-chairman and CEO Henry Sy Jr.

Business ( Article MRec ), pagematch: 1, sectionmatch: 1

Sy said SMDC will continue to focus largely in Metro Manila in the medium term given robust demand in the area.

The property developer will launch 13,000 units this year, almost double the 7,000 units in 2012.

In the first quarter, SMDC’s consolidated net income jumped 12 percent to P1.4 billion due to “improved gross profit margin and increased economies of scale.”

Real estate revenues rose four percent to P5.9 billion.

Lim said of its 173 hectares landbank, 69 hectares are located in Metro Manila, with the remaining in Davao and Cebu.

Sy said the substantial landbank is enough to support more developments in the next five years.

“We are really looking at those areas [Davao and Cebu] but at this moment, we would rather concentrate in Metro Manila – the Mall of Asia area, Makati and Greenhills – where demand is the biggest at the same time the margin is very reasonable,” Sy said.

Sy said SMDC is still studying the market in China, which can be tapped given the successful business model of the condominium builder.

SMDC’s board of directors also declared yesterday a cash dividend of 5.3 centavos per share for stockholders as of May 24. This is payable on June 20.

As of end-2012, SMDC had 15 ongoing residential condominium projects all over Metro Manila, with the exception of Wind Residences in Tagaytay.

When in Cebu City, please visit http://www.gregmelep.com for your real estate and retirement needs. Avail of the opportunity to own a condominium unit in Cebu City at the low amount of only P 9,333.33 and House and Lot @ P 7,306.81/month only. Hurry while supply of units still last. Just call the Tel. Nos. shown herein: (053)555-84-64/09155734856/09173373687/09222737836.

Merger Plans Boost SM Shares

By James A. Loyola

February 20, 2013, 6:21pm

SM Investments Corporation and SM Prime Holdings Inc. reached a record intra-day highs topping P1,000-mark on news that it is studying a proposal to merge its subsidiaries engaged in the property development business to create what is seen to be the country’s top real estate company.

According to SMIC vice chairperson Teresita Sy, they are studying the merger proposal although the plan has not been “finalized yet in terms of what companies will be included.”

SMIC controls SM Prime Holdings Inc., the country’s top mall developers; SM Development Corporation, which is among the country’s biggest residential condominium developer; SM Land which is focused on the tourism industry, and Highlands Prime Inc. which is a high-end property developer.

SM Prime has a market capitalization of P334.96 billion, SMDC has a market value of P79 billion, while HPI is worth P4.92 billion. SM Land is not publicly-listed. SMIC also partly owns Belle Resources Corporation which has a market capitalization of P55.75 billion.

On the other hand, Ayala Land Inc., currently the top real estate firm has a market capitalization of P437.31 billion, lower than the P474 billion market capitalization of SMDC, SM Prime, HPI and Belle combined (excluding SM Land).

“This move is a tacit admission that Ayala Land’s strategy as diversified developer is better than SM’s approach of fragmented units focusing on specific real estate segments,” James Lago, head of research at PCCI Securities Corp. in Manila.

Intra-day, shares of SM Prime peaked at P20.80 while SMIC shares hit a record P1,015 yesterday. SMDC also hit a record P9.48 per share as Highlands Prime Inc. surged to P3.28.

“A diversified SM property builder will give Ayala Land a stronger competitor,” Lago said. “Sy will have a developer with stable earnings – it will get a steady income stream from the malls’ rental earnings and income from the development and sale of property, which is subject to market cycles.”

SM Prime and SMDC had P52.33 billion in combined sales in 2012, compared with Ayala Land’s P49.9 billion revenue. SM Prime had P10.53 billion in profit last year compared with Ayala Land’s P9.04 billion peso net income.

When in Cebu City, please visit http://www.gregmelep.com for your real estate and retirement needs. Avail of the opportunity to own a condominium unit in Cebu City at the low amount of only P9,333.33 and House and Lot @ P 7,306.81/month only. Hurry while supply of units still last. Just call the Tel. Nos. shown herein: (053)555-84-64/09164422611/09173373687.