716% rise in SM property arm's net

REALTY CONCERN BULLISH ABOUT SUSTAINING GROWTH

By Honey Madrilejos-Reyes

Reporter

MIDDLE-income residential developer SM Development Corp. said its net income grew 716 percent for the first quarter of the year to P661 million versus P81 million in the similar period last year. At the sidelines of the company’s annual stockholders meeting Tuesday, company president Rogelio Cabunag told reporters the substantial growth was supported by improvements in its equities portfolio and real estate sales. “While we are a smaller company compared with the other real estate firms, we are optimistic that we can sustain growth.” Cabunag said their company, a listed property firm majority-controlled by the SM Group, intends to raise P3.5 billion in fresh capital this year to fund future developments and acquire additional land. The required capital could be raised either through the public sale of additional shares or new borrowings. “We have to fill up our pipeline as we accelerate the sale of our existing projects.” The company is spending around P2 billion this year, bulk of which would fund three new residential projects in Alabang and Quezon City—Lindenwood Residences in Susana Heights, Alabang; Berkeley Residences in Katipunan Avenue, and Grass Residences in North Edsa, both in Quezon City. Lindenwood homes are designed in the mold of American houses. It is a 2-hectare property divided into 390 lots selling for P3.5 million to P7 million. “Construction in Lindenwood already started and our clients can start building their homes in the first quarter of 2008.” The Berkeley is a 30-story condominium designed for students, academics, and families with school children with units ranging from 19 to 80 square meters in studio-type, one-bedroom, two-bedroom, and penthouse configurations. The Grass Residences, a condominium adjacent to SM North Edsa shopping mall, is a 3-tower project packaged as one of the most convenient and accessible properties for the mobile professional. Each unit at Berkeley and Grass would cost P1 million to P3 million. Last year, company net income grew 51 percent to P984 million from P652 million in 2005 on the back of higher revenues, which amounted to P1.4 billion. The sales upswing was attributed to the increase in demand for its completed residential properties Chateau Elysee and Mezza Residences.

 

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