SM Development Corp., the residential development unit of property developer SM Prime Holdings Inc., is spending a record P39.2 billion in capital expenditures for 2018, as it remains aggressive with launches and expansion outside Metro Manila.
SMDC’s planned 2018 spending represents more than double the P17.2-billion capital expenditures it earmarked for 2017, based on investors’ presentation.
SM Prime said SMDC also planned to launch 15,000 to 18,000 units in 2018, about the same pace as in 2017.
The residential group earlier said it planned to accelerate project launches from the current average of 15,000 to 18,000 units to 30,000 units annually, over the next couple of years, after it venture into affordable hosing projects.
The group said while project launches would accelerate, the sales value of affordable housing units would be lower than condominium units being sold in Metro Manila.
The group has also been acquiring properties in the provincial areas and secondary cities to support the planned expansion.
SMDC has a land bank of 464.54 hectares, including more than 397 hectares outside Metro Manila and 67 hectares within Metro Manila. The current land bank is enough to keep the company busy over the next five years, it said.
SMDC is to break ground this week for its first community development in Marilao, Bulacan called Cheer Residences.
SMDC, which accounts for 32 percent of SM Prime’s consolidated revenues, booked a 10-percent growth in sales in the first nine months to P20.5 billion from P18.66 billion a year ago.
Reservation sales in the nine-month period increased 18 percent to P42.08 billion from P35.52 billion, while unit sales went up 3 percent to 12,963 units from 12,579 units in the same period last year.
The group also has 2,789 ready-for-occupancy units.
The property firm earlier announced it would diversify into provincial areas and begin offering affordable house and lots to address the huge housing backlog in the country.
The company initially acquired properties in Metro Manila’s nearby provinces like Bulacan and Cavite for the planned diversification.
It also plans to launch projects in Davao, Cebu, Iloilo and other areas in Visayas and Mindanao where there the SM shopping malls.