SM to form low-cost housing unit
MANILA, Philippines - SM Development Corp., the residential construction arm of retail tycoon Henry Sy’s SM Investments Corp., will launch a new brand that will cater to the low-end segment of the market in its bid to alleviate the chronic housing backlog in the country.
In a briefing yesterday, SMDC vice chairman and chief executive officer Henry Sy Jr. said the new brand would be affordable to those who want to buy a place of their own or wish to move out of their parents’ houses.
The units will be priced 30 percent lower than the MPlace brand, which sells for a minimum P1.2 million per unit.
Sy said the move is part of efforts to reach a broader market and provide Filipinos with quality homes in prime locations.
Initial sites for projects under the brand would be in Fairview in Quezon City and Sucat, Parañaque.
To ensure a pipeline of new projects, SMDC has acquired P2 billion worth of prime properties, most of which are located in Metro Manila. It is also looking to purchase lots in key provincial cities.
Rosaline Qua, president and chief operating officer of SMDC, pointed out that their business model is what drives people to buy units from the company’s projects. “Our model is to provide Filipinos a home that comes in a whole bundle of amenities that families can enjoy. Since it is SM, it will most likely have a Save More or an SM mall within the vicinity, making it convenient for families,” she said.
For next year, SMDC is looking at a 10 to 15 percent growth in both bottom and top line. Year-to-date reservation sales are now above P30 billion, exceeding its 2012 target of P28 billion to P29 billion.
This year alone, SMDC completed expansion of existing projects and launched additional two new projects translating to 9,403 units valued at P21.9 billion. These projects include Jazz Tower B , Wind Tower 4, Field Bldg 4, MPST Tower C, Grace Residences and Breeze Residences.
Qua said the company has so far sold 39,667 units or 81 percent from the first year of operations until end-September this year.
Sy said SMDC remains interested in expanding overseas, particularly in China and other undeveloped countries in Asia.
He said the family remains upbeat on the long-term outlook of the China property market, which is showing a strong pick up in sales and selling prices.
China is seen to become the largest economy in the world in the next 10 years. It is an attractive market given its massive population and emerging middle class.
The SM Group, through unit SM Prime Holdings, has malls in Xiamen, Jinjiang, Chengdu and Suzhou and is set to open another one in Chongqing before the end of the year, its fifth in China. It is targeting a shopping center in China every year and plans to accelerate this by opening two beginning 2014, which includes its biggest ever mall located in Tianjin.
SM Prime owns land around its malls, suitable for residential condominiums. The group may employ the same strategy as SMDC’s, which builds apartments near SM Prime’s malls in the Philippines.