Kuok property unit breaches P2-B profit mark in 2013

MANILA, Philippines - The local property unit of Malaysia’s Kuok Group breached the P2-billion net income level last year on the back of higher sales from its upscale condominium projects.

In a regulatory filing, Shang Properties Inc. said its consolidated net income hit P2.01 billion, up 22 percent from P1.64 billion in 2012.

“The group’s gross revenue increased by 27.8 percent to P6.9 billion in 2013 from P5.4 billion mainly due to higher revenue from the sale of condominium units and higher rental income from mall and office leasing operations,” Shang Properties said.

In particular, revenues from condominium projects jumped 46 percent to P3.93 billion from P2.69 billion due to higher sales recognized from One Shangri-La Place and Shang Salcedo Place projects.

The 64-story Shang Salcedo Place is located on a 3,045-square meter (sqm) lot in Makati’s Salcedo Village. Estimated to cost around P5 billion, the project offers a total of 778 units, targeted for turnover to residents by 2015.

One Shangri-La Place, the company’s largest development to date, is targeted for completion this year. It is composed of twin skyscrapers housing 1,304 units above the six-level Shangri-La mall expansion.

“Shangri-La Plaza’s growth of P343 million was mainly due to the revenue generated by the newly opened East Wing Mall and rental escalation of the existing mall,” the company said.

The office leasing operations at The Enterprise Center in Makati picked up 20 percent to P803.8 million on the back of improved average occupancy rate to 97 percent in 2013 from 86 percent a year ago.

In contrast, costs and expenses rose 29 percent to P3.66 billion from P2.83 billion in 2012.

Shang Properties said it recorded higher cost of condominium sales, depreciation expense, and interest expense and bank charges.

The property firm is looking to put up a new residential project this year to take advantage of the booming property sector. It has a 10,000-sqm lot in Malugay in Makati that is undergoing advanced planning.

Shang Properties is also looking to start selling 98 large apartments in Shangri-La Hotel at the Fort. The P18-billion, 60-story Shangri-La Hotel at the Fort in Bonifacio Global City has 577 rooms and almost 100 hotel residences.