SM unit to raise P3.6B for land purchase

BY RUBY ANNE M. RUBIO, BusinessWorld Senior Reporter SM Development Corp., the property arm of the SM group, wants to raise P3.6 billion through a shares offering or by borrowing from the debt market, President and Chief Operating Officer Rogelio R. Cabunag said on Tuesday. In a briefing after the annual stockholders’ meeting Tuesday, Mr. Cabunag said the amount will be used for land acquisition and its projects. "SM Development has received a number of proposals from investment bankers for capital-raising activity that we may be interested to go into. We are considering all those options," he told reporters. Company Vice-Chairman and Chief Executive Henry T. Sy, Jr. has said the listed firm will be spending P3 billion to P5 billion this year for its various projects. Aside from its existing two condominium projects Chateau Elysee in Parañaque City and Mezza Residences in Sta. Mesa, Quezon City, the Sy-led property developer is also launching three projects namely, the 400-lot subdivision Lindenwood Residences in Susana Heights, Muntinlupa City; a 31-storey condominium project called Berkeley Residences along Katipunan Road; and a three-tower high-rise condominium called Grass Residences behind SM North EDSA. SM Development’s projects include residential condominiums near the SM Malls. On Tuesday, Mr. Sy said SM Development also intended to draw interest from foreigners for its projects in Metro Manila. "Like in Thailand, foreigners are now comfortable with Metro Manila. I am sure they will be buying our condominium projects," he added. Mr. Cabunag said the company’s outlook "has never been rosier," with the prevailing low interest environment and robust trading activity that "will bring a strong demand for strategically located but affordable residential options." "The company is more than ready to take advantage of this favorable business climate," he said, "Already, we are taking hold of opportunities by expanding our real estate portfolio with exciting follow-through projects in our pursuit to fully develop our core business," he added. Mr. Cabunag said SM Development earned P661.7 million in the first quarter, an 830.53% jump from P71.11 million the same period last year as it booked gains from marketable securities. "This came mostly from equity portfolio. But of course, our real estate operation contributed from this growth. As percentage of completion improves, we book more revenues," he said. Mr. Sy said SM Development’s strategy is "to have quality projects." "We always believe our projects will be based on the best location and amenities, nearest to the shopping center with a bridgeway. We always institute an after-sale service, engineering- and maintenance-wise," he said. "We’d rather do it slowly than have a lot of projects then a lot of people complain. We feel very comfortable that whoever buys our units will get their money’s worth. Instead of size, we are looking more for the quality rather than numbers," he added. "We’d rather do it slowly than have a lot of projects then a lot of people complain. We feel very comfortable that whoever buys our units will get their money’s worth. Instead of size, we are looking more for the quality rather than numbers," he added. the quality rather than numbers," he added.