By Zinnia B. Dela Peña (The Philippine Star) Updated October 18, 2010 12:00 AM
MANILA, Philippines - Barely three months before the end of the year, SM Development Corp. (SMDC), the residential development arm of the Sy family’s listed flagship firm SM Investments Corp., is stepping up its activity with at least three more new product launches.
SMDC is set to launch another project under its affordable housing brand, My Place, to rise in Manila, mainly driven by the public’s warm reception to its pilot site in South Triangle on Panay Avenue, Quezon City.
The My Place business model aims to tap a younger market, composed mostly of upwardly mobile young adults who want to experience independent living.
Two more projects are targeted for launch in the fourth quarter, namely Blue Residences and Green Residences.Blue Residences is a 41-storey tower at the corner of Katipunan and Aurora Boulevard.
In the first half this year, SMDC has sold over 5,000 units worth P11.3 billion, making it the largest residential developer in Metro Manila both in terms of the number of units sold and the value of sales. It has already exceeded the number of units sold last year which stood at 4,700.
SMDC’s sale of condominium units from January to June this year accounted for 26 percent of total real estate sales in Metro Manila, mainly coming from Princeton, Light, Jazz, Sun and Wind Residences projects.
Among its projects in the pipeline is Wind Residences, a nine-tower, 20-storey condominium building in Tagaytay City with an estimated development cost of P12 billion. The project, which falls under SMDC ‘s SM Residences brands, will offer a total of 7,758 units when completed in 2015.
SMDC is aiming to raise around P11.7 billion from a rights offering of 1.83 billion shares scheduled this month. Shareholders can buy one share for every three common shares held as of Oct. 6 at P6.38 apiece, above the earlier price range set by the company of P5.45 to P5.73 per share.
The offering period will run from Oct. 18 to 22 while the listing of the shares is scheduled on Nov. 3.
This is the second rights offering conducted by the company for this year, the first one was in January when it raised nearly P5 billion through the sale of 1.37 billion common shares at P3.50 apiece.
In May, SMDC raised P10 billion from the issuance of corporate notes, which was more than three times oversubscribed by domestic institutional investors.
Proceeds from the offering will be used to fund the company’s aggressive landbanking activities and ongoing and future construction projects.
SMDC currently has a landbank of 160 hectares (60 hectares in Metro Manila and 100 hectares outside Metro Manila) and it intends to increase this to ensure long term growth. While the company’s focus will still be in Metro Manila, it is exploring opportunities in Cebu and Davao to tap a wider clientele base.
The company’s expansion is in line with its goal to grow its net income by 30 to 50 percent in the next two years.
______________________________________________________________
