Posted on 09:22 PM, April 26, 2010 [ BusinessWorld Online ]
PROFITS of SM Development Corp., the property arm of the Henry Sy-led SM mall and banking group, are expected to rise by 30%-50% this year given the continued demand for economic housing units, executives said yesterday.
Rapid growth is also expected to continue for the next five years, they added. “We will try to make 30%-50% growth every year in the next five years in terms of profit and volume,” SM Development Vice-Chairman Henry T. Sy, Jr., said in a press briefing.
SM Development’s net income ballooned to P1.8 billion last year from P56.8 million the previous year, bucking the economic slowdown.
Mr. Sy said the 3.5-million shortage in housing units nationwide would prop up sales, noting that only 25,000 units were built last year.
For the first quarter, net income rose by more than half to P632 million due to new revenue streams from new projects. During the period, SM Development pre-sold 3,547 residential units worth P7.1 billion. The figure was almost three-fourths of the 4,892 residential units worth P10.5 billion sold for the entire 2009.
Rogelio R. Cabuñag, president and chief operating officer of SM Development, said the pre-sold units were in the following projects: Sun Residences in Quezon City, Jazz Residences in Makati, and Light Residences in Mandaluyong.
“For the three projects alone, we raised almost P4 billion in sales,” Mr. Cabuñag said.
Consolidated revenues went up by 48% to P2 billion.
Mr. Sy said the company would hike its sales force to 800 by the end of the year from the current 500.
A new condominium brand targeting young professionals is projected to expand the market base of the listed property developer. The real estate firm plans to secure as much as P10 billion in loans to fund five project launches this year.
The new “My Place” brand will target young professionals like business process outsourcing employees.
“This product will be selling at P1.1 million [per unit] and below at primary locations,” Mr. Sy told reporters.
The first My Place high-rise, four-tower condominium will be built near the ABS-CBN Broadcasting Corp. compound in Quezon City. It will have about 2,000 bare units averaging 20 square meters each.
Shares in SM Development closed higher at P6.30 apiece yesterday from P6.20 on Friday. -- Neil Jerome C. Morales
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