SMDC eyes horizontal development in P18-B expansion this year

MANILA, Philippines -  The residential development arm of the Sy family’s property conglomerate SM Prime Holdings Inc. will undertake a more aggressive growth path this year, allotting as much as P18 billion to double the company’s new project launches and potentially make its foray into horizontal housing development.

SM Prime chief finance officer Jeffrey Lim said SM Development Corp. (SMDC) is earmarking a capital ex-penditure budget of P15 billion to P18 billion this year to fund new projects as well as expand existing developments.

For this year, Lim said SMDC would hike its new project launches to about four or five from only two last year.

The new projects would add 12,000 to 14,000 units to SMDC’s portfolio and would generate sales of as much as P14 billion, Lim said.

In addition, he said two more existing projects would be expanded this year through the addition of new towers.

“We see a lot of demand continuing and there’s a lot of demand in terms of afford- able residential condos,” Lim said, when asked regarding the firm’s more bullish plans for the year.

SMDC also intends to push through with its planned maiden venture into low- cost horizontal development.

“We’re working on horizontal development, but that is still in the planning stages. Hopefully we can launch one project within the year to serve as our pilot,” Lim said.

Lim said SMDC is still finalizing the location for the horizontal project, but it would likely be in the province, either north or south of Metro Manila.

He said the move to venture into hori- zontal development arose from demand coming from overseas Filipino workers (OFWs) looking for units at the P800,000 to P1.2 million range.

“We’re still in the drawing board for the branding for that because we need to first work on securing the property. Once we have that, then we can accelerate the plans for the launching,” he said.

Aside from local projects, SMDC also wants to expand its residential footprint abroad with a project planned in China this year.

“Yes, we’re in the planning stage now, our guys are starting to talk to some of the contractors. If we are able to get all off these done, hopefully we should be able to start it within the first half of this year,” Lim said referring to the China project.

“We continue to look for areas we can develop. For horizontal development, we’re looking outside Metro Manila, but in Metro Manila we still have a lot of properties we can develop,” he added.

Lim said SMDC is expected to post stronger growth for full year 2014 and it continues to be positive for its 2015 performance also.

SMDC posted a 12 percent hike in revenues of P3.7 billion in the third quarter last year compared to P3.3 billion recorded in the same period a year ago.