Real estate giant SM Prime Holdings Inc. will soon venture into both the low-cost and high-end markets as the Sy family-led company focuses on expanding to other segments amid a challenging environment for mid-income properties.lucky7
Next year, SM Prime said it would consolidate all its residential projects under the SM Residences brand to cover economic, medium-cost, premium and leisure developments.
By early 2025, SM Residences will launch a 200-hectare premium development, according to SM Prime. Other projects in the pipeline have price tags ranging from P25 million to over P100 million.
Article continues after this advertisementREAD: SM Prime moves closer to breaking record income
FEATURED STORIES BUSINESS BSP shuts down operations of Uno Forex BUSINESS To the trade secretary, please save our bananas BUSINESS Experience holiday joy at Met Park’s festive estateThe developer has earmarked more than 1,000 hectares of land for SM Residences projects in the next five years. Most of these will be for horizontal developments, SM Prime said.
This comes after the national government raised the guaranty ceiling for low-cost housing packages to P4.9 million from P3.6 million, and medium-cost packages to P6.6 million from P5.2 million previously.
Article continues after this advertisementThis means that the government will guarantee loans up to these amounts.
Article continues after this advertisement“The price adjustments will allow us to target a broader segment of the housing market,” SM Prime president Jeffrey Lim said in a statement.
Article continues after this advertisement“It will enable us to better address the growing demand for affordable and quality housing, while contributing to the government’s efforts to reduce the housing backlog,” Lim added.
Inventory oversupplyDespite the continued weakness of the Metro Manila residential market, Lim said they were unaffected by the inventory oversupply in the sector.
Article continues after this advertisementProperty investment management firm Colliers Philippines said that in the third quarter, there were 27,200 unsold condominium units in Metro Manila, 32 percent of which are in the lower-middle income segment; 25 percent, upper-middle income; 24 percent, affordable; and 13 percent, economic.
The upscale and luxury segments accounted for only 3 percent and 2 percent, respectively.
SM Prime’s residential projects are mostly in the middle-income segment under SM Development Corp. With the addition of SM Residences’ luxury projects, SM Prime is poised to compete with other developers like Ayala Land Inc., which has been banking on its premium brands, Ayala Land Premier and Alveo Land, to generate income.
According to SM Prime, SMDC will be consolidated into SM Residences and continue to serve the core mid-market.
In the first nine months of the year, SM Prime’s earnings ended at P33.9 billion, up by 12 percent driven by the mall business.
The developer is now P6.1 billion away from shattering its P40-billion full-year net income record last year. In the third quarter alone, SM Prime’s profits rose by 11 percent to P11.8 billion.
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Next year, the company plans to spend up to P110 billion to support aggressive expansion planslucky7, particularly new domestic malls.
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