By Neil Jerome C. Morales (The Philippine Star) | Updated April 25, 2013 - 12:00am
MANILA, Philippines - Condominium builder SM Development Corp. (SMDC) will spend P71 billion to complete existing projects and enter new property ventures in the next three years, top company officials said yesterday.
“In the next three years, SMDC will spend P71 billion to drive its expansion activities,” said newly-appointed SMDC president and chief operating officer Jeffrey Lim.
The residential arm of the country’s richest man Henry Sy has a considerable landbank in Metro Manila good for the next five years, he said.
“For the year 2013, SMDC will spend approximately P20 billion in capital expenditures – P13 billion for project development and P7 billion for landbanking,” Lim said.
It will be followed by P26 billion and P25 billion spending in 2014 and 2015, respectively.
“For 2013, we plan to launch four new projects and expand three existing developments in Metro Manila,” said SMDC vice-chairman and CEO Henry Sy Jr.
Sy said SMDC will continue to focus largely in Metro Manila in the medium term given robust demand in the area.
The property developer will launch 13,000 units this year, almost double the 7,000 units in 2012.
In the first quarter, SMDC’s consolidated net income jumped 12 percent to P1.4 billion due to “improved gross profit margin and increased economies of scale.”
Real estate revenues rose four percent to P5.9 billion.
Lim said of its 173 hectares landbank, 69 hectares are located in Metro Manila, with the remaining in Davao and Cebu.
Sy said the substantial landbank is enough to support more developments in the next five years.
“We are really looking at those areas [Davao and Cebu] but at this moment, we would rather concentrate in Metro Manila – the Mall of Asia area, Makati and Greenhills – where demand is the biggest at the same time the margin is very reasonable,” Sy said.
Sy said SMDC is still studying the market in China, which can be tapped given the successful business model of the condominium builder.
SMDC’s board of directors also declared yesterday a cash dividend of 5.3 centavos per share for stockholders as of May 24. This is payable on June 20.
As of end-2012, SMDC had 15 ongoing residential condominium projects all over Metro Manila, with the exception of Wind Residences in Tagaytay.