Thursday, June 26, 2014
SM Development Corp (SMDC) have announced seven new projects this year, and plans to fast track their expansion to fill the need for more housing projects. These are based on reports of a 500 000 housing unit backlog in the metropolis.
According to SM Prime chief finance officer, Jeffrey Lim, the backlog is expected to grow to 6.5 million by 2030.
He says vertical developments are expected to be a major beneficiary as the market becomes increasingly willing to trade slightly smaller floor space for the greater convenience of in-city living.
SMDC's new projects will result in the construction of up to 15 000 residential units this year. SM Prime chairman, Henry Sy Jr, says SMDC is looking at economic housing units worth P1.5 million and high-end projects worth more than P3 million.
According to SM Prime's president, Han Sy, the company allotted P70.57 billion for its capital expenditurethis year, with 28 percent set aside for the residential segment. Lim says they plan to raise P20 billion from retail bonds while tapping on a syndicated dollar debt without tapping the equity market.
The company is looking to double its income and revenues in the next five years as it grows its office, mall, leisure, hotel and residential portfolio in the next five years through a P400 billion investment.
According to a report from GMA Network, the P400 billion will be financed through internally-generated cash and debt.
Given the integration of SM Group's property units, SMDC is looking to build condominium projects near their shopping malls. This is also in line with their vision for more 'lifestyle cities', as announced in a forum last April at the SMX Convention Center.
In May last year, SM announced that it would merge all its property-related companies under SM Prime, to give the company the scale, agility and resources for further developments. It is now one of the biggest property companies in Asia.