SM allots P6B for condo project in Sta. Mesa

BY JENNEE GRACE U. RUBRICO, BusinessWorld Senior Reporter Publicly listed SM Development Corp. is allocating up to P6 billion for the construction of four residential towers in its newest project, the Mezza Residences in Sta. Mesa. Henry Sy, Jr., vice-chairman and chief executive, told reporters in the sidelines of the project’s launch last Friday that "each tower will cost around P1.2 billion to P1.5 billion." The Mezza Residences is the first high-rise condominium project of SM Development, the arm of the SM Group of companies that develops residential towers near SM malls. The project, which will have a total of 1,500 units, is a joint venture between Banco de Oro, which owns the land, and SM Development, which will develop the two towers. The Mezza Residences, located across SM Centerpoint in Sta. Mesa, will have 38 storeys for each building. The two towers which were launched on Friday will have 300 one bedroom, two bedroom and three bedroom units each, with floor areas of between 21 and 86 square meters. The units, SM Development President Rogelio Cabunag told BusinessWorld, will be delivered by 2008. "We hope to start construction for the two buildings by the fourth quarter," he said. He said units would be sold from P48,000 to P55,000 per square meter, depending on the which floor the units are located. Mr. Cabunag said SM is targeting the villages in the area for the project. "There are also a lot of businessmen in the area in Araneta, even medical practitioners in the UERM [University of the East Ramon Magsaysay Memorial Medical Center]," he said. He said SM is contemplating the holding of a possible international road show for the project. "We’re considering that for the international market," he said. Officials of the project said that as of Friday, the group has been able to sell 150 units, or 25% of the total number of units for the two towers. Mr. Cabunag said SM Development decided to go into high-rise development because demand for the project in its location is for such buildings. "There’s an opportunity there. Most of the condominiums on that area are built on a high-rise level," he said. Meanwhile, BDO Realty Corp. may increase the size of its joint-venture project with Sta. Lucia in General Trias, Cavite, depending on the latter’s performance. BDO Realty, a unit of Banco de Oro, earlier entered into a joint-venture agreement with Sta. Lucia to develop 127 hectares of raw land in General Trias. The project would be developed into a subdivision called Rio De Oro. "We have 400 hectares of land in General Trias, and Sta. Lucia is developing 127 hectares. The rest of the land will still be developed by Sta. Lucia depending on how they perform [on the 127 hectares]," BDO Realty Manager Charlie O. Torio told reporters. BDO Realty has been mandated by its parent company to dispose of some of the foreclosed assets of Banco de Oro. Mr. Torio estimates the bank has P7 billion in foreclosed assets. Sources earlier said BDO Realty needs to dispose of P1 billion worth of properties covering 200 hectares of land. The 200 hectares, which comprise 20% of the idle assets BDO Realty needs to dispose, will yield revenues of P2.5 billion over 10 years, sources earlier said. BDO Realty is one of six subsidiaries of BDO. The others are BDO Capital & Investment Corp., BDO Financial Services Inc., BDO Card Corp., and BDO Private Bank.