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Shang to invest over P20 billion in current projects

Posted on June 24, 2014 09:51:14 PM [ BusinessWorld Online ]

REAL ESTATE developer Shang Properties, Inc. will invest more than P20 billion until 2015 on five projects under construction, which are intended to tap the “tremendous interest” by investors for real estate.

Its latest residential project in Makati City, The Rise, currently costs P97,000 per square meter, and Shang Executive Director Wilfred Woo said they hope the price would go up to more than P100,000 per square meter.

“It seems like the people’s interest in buying is tremendous,” Mr. Woo told reporters on Tuesday on the sidelines of the company’s annual stockholders’ meeting at Edsa Shangri-La Hotel in Manila.

He said the current price of the 63-storey building, which is expected to be finished by 2017, is already a result of two price increases in the past, and as of Monday, the company has already received reservation checks for 790 units, out of the 2,822 saleable units.

Construction is expected to be completed by the second quarter of 2015 for its Horizon Homes at Shangri-La Hotel, which has 98 residential units that cost P250,000-P300,000 per square meter.

“We feel that our product is one of the best in the area so we price accordingly,” Mr. Woo said of the property in Fort Bonifacio in Taguig City.

“We feel there is more room to increase the prices.”

Its annual report showed that construction costs for the 62-storey luxury hotel and residential development ended up at around P18 billion.

Mr. Woo said the company is also spending a “substantial amount of money” in renovations and maintenance to maintain the “prestige” and “prime status” of its existing buildings.

Renovations for The Enterprise Center, a 13-year-old office building at the Makati central business district (CBD), is expected to cost the company around P300 million
It also allocated around P1.7 million for the refurbishing of the 22-year-old Main Wing of the Shangri-La Plaza in Ortigas Center.

The East Wing, which was opened in March 2013, is projected to increase revenues by 30% this year.

Another project is Shang Salcedo Place, a luxury residential building in Makati CBD, which has already sold 32% or 245 out of 763 units after it was launched in 2012. Its total sales as of end-2013 hit almost P1.7 billion.

The 64-storey One Shangri-La Place in Ortigas Center, on the other hand, is already 86% sold, or 1,102 of 1,304 units. The project cost is pegged at P1.1 billion, but as of end-2013, sales hit P10.8 billion.

Mr. Woo said the company is “optimistic” on the property market and is now looking for land in Makati City, Ortigas Center and Fort Bonifacio as it has exhausted its Metro Manila land bank.

Shang’s subsidiaries are Shangri-La Plaza Corp.; SPI Parking Services, Inc.; Shang Properties Realty Corp.; EPHI Logistics Holdings, Inc.; Shang Global City Holdings, Inc.; Shang Fort Bonifacio Holdings, Inc.; Shang Property Management Services Corp.; Shang Property Developers, Inc.; and KSA Realty Corp.

First-quarter net income rose 21.5% to P2.303 billion year on year, as gross revenue similarly grew 27% to P6.9 billion. Costs and expenses increased 28% to P3.849 billion.

Shang Properties shares were unchanged at P3.30. -- Daphne J. Magturo

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