By Zinnia B. Dela Peña (The Philippine Star) Updated April 27, 2010 12:00 AM
MANILA, Philippines - SM Development Corp. (SMDC), the residential condominium developer owned by the family of retail tycoon Henry Sy Sr., is planning to issue up to P10 billion worth of corporate notes to fund the development of new projects and products, which include units priced below P1 million.
In a press briefing following the company’s annual shareholders meeting yesterday, SMDC vice chairman Henry Sy Jr. said the firm will be launching a new brand, Myplace, which will cater to a broader market. The initial project under Myplace will be located at the former site of the Danarra Hotel near the ABS-CBN compound, offering a total of 2,000 units with a size of 20 square meters each.
The pilot project, which will rise on a one-hectare property, comprises four 20-story towers, targeted towards young urban professionals, particularly contact center people.
Sy said the company is hoping to do five projects under Myplace within one year. He refused to identify the sites for the other planned projects but said all projects would have a total of 2,000 units each.
“We believe this new product will help alleviate the huge housing backlog in the country,” Sy said.
For this year, SMDC is launching four new projects which will entail between P4 billion and P8 billion in funding requirements. These new projects are located in various strategic sites in Taft, Manila; Ortigas in Pasig City, and Quezon City.
SMDC president Rogelio Cabunag said the company has tapped BDO Capital as financial advisor for its planned corporate notes issuance.
Last year, SMDC launched five projects, bringing the group’s total projects to 12 from only seven in 2008.
“We stay focused in our pursuit to make luxury homes even more affordable. 2010 holds that promise as we break new ground in style, design and engineering,” Cabunag said.
SMDC reported a 51 percent jump in net income for the first quarter this year to P632 million on new product launches and prompt completion of some existing projects. Revenues grew 48 percent to P2 billion.
Net income and revenues from real estate operations grew 48 percent and 45 percent, respectively, to P628 million and P1.9 billion. EBITDA, on the other hand, reached P750 million for an EBITDA margin of 39 percent.
During the quarter, SMDC pre-sold 3,547 residential units, valued at around P7.1 billion - an increase of 288 percent.
“We didnt expect it to hit this level. So we are moving to accelerate the construction of new projects given the strong demand for our products,” Cabunag said.
Given its impressive first quarter results, SMDC is gearing up for a much stronger year with net earnings seen to grow 30 to 50 percent annually over the next five years, Sy said.
SMDC posted a net income of P1.8 billion in 2009, more than 31 times the P56.8 million reported in 2008. Of the total, net income from real estate operations amounted to P1.5 billion, up 36 percent from P1.1 billion.
SMDC’s confidence is on the upswing given the brisk take-up of four big projects launched in December last year – Jazz Residences near Jupiter Road in Makati, Sun Residences right beside the Mabuhay (formerly Welcome) Rotonda near the Quezon Avenue boundary of Quezon City and Manila;Wind Residences along the Emilio Aguinaldo Highway in Tagaytay City; and Light Residences near Pioneer St. in Mandaluyong City.
The other ongoing projects of SMDC are Chateau Elysee, a mid-rise condominium project in Parañaque City, which has completed five of its six clusters; Berkeley Residences in Katipunan Road, Quezon City, which is 63 percent complete; Grass Residences beside SM City North Edsa, which is 58 percent complete with its Tower 1; Sea Residences near the Mall of Asia Complex in Pasay City, which is 38 percent complete with Phase 1; and Field Residences in Sucat, Parañaque, which is 95 percent complete with its Tower 1. Both Mezza Residences, which is just across SM City Sta. Mesa and Lindenwood Residences, a residential subdivision in Muntinlupa City, are 100 percent complete.
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