SMDC profit up 24% to P1.3 billion in first half

MANILA, Philippines - SM Development Corp. (SMDC), the residential property arm of tycoon Henry Sy’s listed holding firm SM Investments Corp., said yesterday its net earnings grew 24 percent in the first half this year on higher sales from its condominium projects.

In its disclosure to the Philippine Stock Exchange, SMDC said consolidated net income rose to P1.3 billion as revenues from real estate operations surged 77 percent to P4.1 billion. Net recurring income from real estate operations went up 47 percent to P1.1 billion.

SMDC raised P12.4 billion from pre-selling activities during the period under review, mainly coming from the Princeton, Light, Jazz, Sun, and Wind projects under the SM Residences brand.

 “SMDC’s healthy and dynamic performance during the first half of the year is a result of the dedicated service of the SMDC team and the market’s strong acceptance of our product offerings. We continue to trailblaze this sector as we launch more projects, particularly “My Place,” a new brand of residences that reaches out to young and independent homeowners wanting to express their personal sense of style,” said Henry Sy Jr., vice chairman of SMDC.

As of the first half of the year, SMDC has 13 residential projects in the market. In June, the company launched its affordable housing brand, My Place, with its pilot project in South Triangle on Panay Avenue in Quezon City.

The new project, My Place South Triangle, involves four condominium towers, offering a total of 3,000 units with sizes ranging from 20 square meters to 40 square meters. Slated for completion in the first half of 2013, the project is estimated to cost around P2 billion.

This pioneering business model aims to tap a younger market, composed mostly of upwardly mobile young adults who want to experience independent living. Together with the company’s SM Residences brand, My Place is expected to further strengthen SMDC’s product offerings, Sy added.

SMDC is considering raising at least P5 billion through a rights offering or follow-on offering this year to fund its landbanking activities.

In May, the company raised P10 billion from the issuance of corporate notes, which was more than three times oversubscribed by domestic institutional investors.

SMDC is also planning to acquire properties in Cebu and Davao to tap a wider clientele base, particularly overseas Filipino workers.