By Zinnia B. Dela Peña (The Philippine Star) Updated January 24, 2012 12:00 AM
MANILA, Philippines - SM Development Corp. (SMDC), the residential development arm of the Sy-led SM Investments Corp., is targeting a 10 percent hike in reservation sales this year on the back of new product launches, according to a top company official.
SMIC chief finance officer Jose Sio said the rise in sales will be primarily driven by a buoyant property market and the huge housing backlog in Metro Manila.
Based on data from the Housing and Urban Development Coordinating Council, the annual demand for housing in Metro Manila is around 82,000 units.
Despite a slow start, SMDC is seen to have raked in sales of between P26 billion to P27 billion last year, with sales take-up accelerating in the fourth quarter after it slashed prices of some of its condominium units by as much as 40 percent.
The company was targeting to hit P24 billion in sales in 2011.
For 2012, SMDC plans to launch four to five projects to further spur growth, Sio said. These projects will be located in Quezon City, Makati, Mandaluyong, Bicutan and Roxas Blvd.
In the first nine months of 2011, SMDC sold about 7,900 residential units worth around P17.6 billion. During the same period, net profit jumped 51 percent to P3.1 billion. Revenues from real estate operations surged 86 percent to P11.3 billion.
As of end-September last year, SMDC had 16 residential projects in the market.
Analysts said the affordability of SMDC’s products coupled with the improvement in the payment terms of housing loans have made home purchases accessible to a bigger market.