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Shang Properties eyes P6B in borrowings for projects

Posted on June 19, 2012 09:47:37 PM [ BusinessWorld Online ]

UPSCALE DEVELOPER Shang Properties, Inc. is looking to borrow some P6 billion to partially fund the ongoing construction of its retail and residential projects this year, an official yesterday said.

“We are currently negotiating with various banks to take on a long-term bank loan, maybe in the range of P6 billion,” Wilfred Woo, Shang Properties board director and executive assistant to the chairman, told reporters following the company’s annual stockholders’ meeting yesterday.

He declined to identify the banks the company was talking to as the transaction’s terms were still being discussed.

In a separate interview, Vicente P. Formoso, Shang Properties chief finance officer and treasurer, said the loan was likely to amount to a maximum of P6.4 billion.

The loan will be used to fund the construction residential condominiums One Shangri-La Place, Shang Salcedo Place, and the redevelopment of the company’s upscale flagship mall Shangri-La Plaza, Mr. Woo noted.

“We should be able to finalize something within the next couple of months,” Mr. Woo added.

Shang Properties is looking to spend roughly P12.5 billion to build the 64-storey, twin tower One Shangri-La Place; P1.8 billion to renovate and expand Shangri-La Plaza; and P5 billion for the 64-storey Shang Salcedo Place, situated on the old Asian Plaza Property formerly owned by Phinma Corp., according to earlier reports.

Further, it is also allotting P18 billion for the 60-storey Shangri-La at the Fort, which will have 577 rooms upon completion in late 2014.

This comes amid the company’s optimistic outlook for the rest of the year, especially for its niche upscale market.

“[The full-year outlook] is good. Our sales are continuing, and the profitability is improving. That is why we continue to invest in the local property market,” Mr. Formoso said.

“[Net income] should be better than last year,” he added, while declining to cite specific targets.

Moving forward, Shang Properties said it is scouting for possible properties in the high-growth districts of Makati City and Fort Bonifacio for future developments.

“We [would] like to acquire one or two more pieces of land there. We are looking and talking to various people already,” Mr. Woo said, noting that these planned developments will likely be high-rise residential projects.

“As long as the market is good, we will continue to pursue our residential business,” Mr. Formoso said further. -- Franz Jonathan G. de la Fuente

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