Posted on
June 28, 2015 09:13:00 PM [ BusinessWorld Online ]
By Krista A. M. Montealegre, Senior Reporter
By Krista A. M. Montealegre, Senior Reporter
SM Prime
Holdings, Inc., the property holding firm of tycoon Henry Sy, Sr., has beefed
up its land bank along the Philippines’ busiest highway.
FILE photo
shows SM Prime Holdings Executive Vice President Jeffrey C. Lim at the
company's analyst and media briefing.
SM Prime
Executive Vice-President Jeffrey C. Lim told reporters last week the company
recently purchased about two hectares of land from DMCI Property Developers,
Inc. located near the Guadalupe station of the Metro Rail Transit (MRT) Line 3.
“It’s a big
block owned by DMCI. Siguro nalakihan sila (Maybe DMCI thought it was too big)
so they sold to us a portion of the property,” Mr. Lim said, but declined to
provide the value of the land.
The
acquisition of the Guadalupe property brings SM Prime’s land bank along
Epifanio de los Santos Avenue (EDSA) to 12-14 hectares, consisting of roughly
six chunks of land located in Makati, Ortigas, Mandaluyong and Quezon City.
“Who can
argue about EDSA?” Mr. Lim said when asked why the developer was increasing its
land bank on the country’s major highway.
SM Prime may
launch residential projects with a retail component on the ground floor within
these lots in the next two years, he said.
STRATEGIC
SM Prime’s
strategic move to grow its land bank along EDSA is a manifestation of the
confidence of developers in the role of the transport system in drawing its
target market to its developments.
“Commuter-based
residential and retail developments attract the target market due to
convenience and ease of transport to and from their place of work. Foremost of
this target market are those Metro Manila workers -- who live within Metro
Manila during weekdays, but reside in the fringe provincial areas during the
weekend,” Claro dG. Cordero Jr., head of research and valuation at real estate
advisory firm Jones Lang LaSalle, said in a mobile phone message.
Commercial
land values along EDSA have increased at an annual cumulative average growth
rate of approximately 15% over the last 10 years, Mr. Cordero said.
“Developers
are banking on the efficiency of existing and future developments, where it is
possible for seamless commute from Metro Manila to other provincial areas --
through the planned MRT lines and the ongoing Skyway projects,” he added.
At end-March,
SM Prime had a land bank of 177.5 hectares for its condominium developments,
some of which could be converted into mixed-use developments, according to a
presentation to investors uploaded on its Web site.
The SM Group
has also won three reclamation deals over the last two years, the latest of
which is a P138-billion 1,500-hectare project in Cordova, Cebu.
The cities of
Pasay and Parañaque, in 2013 and last year respectively, both awarded to the SM
Group separate contracts to reclaim and develop around 300 hectares each in
Manila Bay under their jurisdiction for P54.5 billion and P50.19 billion,
respectively.
SM Prime,
however, must hurdle several government approvals before it can proceed with
the reclamation projects.
SM Prime
reported a consolidated net income of P12.6 billion in the first quarter, up
176% year on year, due to a one-time gain from the sale of securities and
sustained growth in its shopping mall and residential businesses.
Even without
that one-off gain, SM Prime’s profit was still up 14% -- picking up from the
11% growth seen a year earlier.
SM Prime is
part of Sy-led SM Investments Corp., which has core businesses in retail,
banking and real estate.
The Sy family
also has interests in gaming, geothermal energy and infrastructure.
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