Vol. XXII, No. 188 [ BusinessWorld Online ]
Tuesday, April 28, 2009 | MANILA, PHILIPPINES
SM Development projects are still enjoying brisk sales from "end-users" or buyers looking for their own homes, company executives said yesterday.
THE PROPERTY arm of the country’s richest man has bucked most property analysts’ bleak outlook after net income for the first quarter skyrocketed on higher residential sales and a more stable market condition.
Officials of Henry Sy-led SM Development Corp. told stockholders yesterday that the company earned a net income of P400 million from January to March, higher than the P14 million posted during the first quarter of 2007.
"Stable movement" in equities, wherein the property developer has a substantial investment, added to gains from residential sales, which demonstrated "strong growth," SM Development President Rogelio R. Cabuñag said.
"There was no major movement in our equity investment while there is continuous growth in our residential operations. We are quite optimistic that [the equities have] already reached their low levels and we do not expect further deterioration from our equity investments," he said.
In the first quarter of 2007, net profits of SM Development plunged to P14 million from P661 million the year before as equity investments nosedived due to weak market conditions.
In the first quarter of 2008, residential sales doubled to P3.2 billion, giving comfort to the company which has decided to launch more projects this year on top of new land acquisitions.
"The market is still there so we still keep developing [projects]. Most of our customers are local buyers and only a tenth are overseas buyers," Henry T. Sy, Jr., SM Development vice-chairman, said. "We expect more sales from the locals rather than the overseas Filipinos."
The company has set aside P7.2 billion for spending this year, higher than the P4.5 billion it spent last year.
SM Development will launch four projects worth P15 billion this year.
Princeton Residences is a 38-storey, one-building project that will house 1,156 units. The P1.5-billion project will rise in Quezon City and is expected to be completed two to three years from now.
Aside from Princeton, the company will also launch Jupiter Residences in Makati City. Jupiter Residences is a P7.2 billion project that will have six 40-storey buildings and 5,224 units. It is expected to be completed in 2013.
SM Development will also launch Tree Residences in Cainta, Rizal, a P2-billion project that will have eight 12-storey buildings and a total of 2,420 units. Also in the pipeline is the P4.3-billion Wind Residences in Tagaytay that will have several mid-rise buildings, which the company hopes will attract second-home buyers.
"There is still a huge demand for end-users who want to have their own houses. The company [still chose] to launch projects this year inspired mostly by the overwhelming demand for our projects," Mr. Cabuñag said.
Shares of the company were unchanged at P2.95 apiece yesterday. — K.J.R. Liu