Shang Properties sees P6B sales from Makati project
MANILA, Philippines—Upscale property developer Shang Properties Inc. is upbeat on the high-end residential market in the country, noting the strong market reception to its newly launched condominium project in Makati that is expected to bring about P6 billion worth of new inventory to the property market.
SPI chief finance officer Vicente Formoso told reporters after the company’s annual stockholders’ meeting on Tuesday that the company has seen increasing consumer affluence in the country.
“We see that every day. That’s why we launched a new project Shang Salcedo a few days ago. That’s a new 67-story building. We’ve started sales and it’s going very well,” Formoso said.
This upscale condominium project, which offers 770 residential units, is located at the corners of Buendia, HV de la Costa and Tordesillas streets in Salcedo Village, Makati. This was the property earlier acquired from the Phinma group where the Asian Bank Plaza once stood.
“We expect to be able to sell over a three-year period,” Formoso said, noting that the company would start turning over units to buyers by 2015.
For as long as the market is good, SPI would continue to pursue the residential business while increasing its recurring income base, according to Formoso.
Apart from the EDSA Shangri-La mall, the company is constructing mixed-use One Shangri-La Place in Ortigas Center, which it expects to complete by yearend. It also leases out office space at The Enterprise Center along Ayala Ave. in Makati. It will also own 40 percent of the upcoming Shangri-La complex at Bonifacio Global City.
SPI is also looking at more residential developments within the Makati and Bonifacio area. “We’ve identified sites and are negotiating,” he said.
But with three ongoing big-ticket items, Formoso said, SPI might wait two years down the road before beginning on whatever new landbank it might soon acquire.
To fund its large projects, Formoso said SPI has been looking to contract a total of P6.4 billion in bank credit. He saw no need to raise fresh funds using equity at present because the company’s debt level has been low.
Asked about SPI’s earnings outlook for the year, Formoso said that from an accounting recognition system alone, this 2012 should be better than the level a year ago, with the company realizing more revenues alongside progress in the construction of residential projects.
SPI chalked up a net profit of P1.1 billion in 2011 from condominium sales revenues as well as retail and office space leasing.
The company’s principal stockholder, the Kuok Group of Malaysia, is a diversified regional conglomerate with interests in real estate, trading, transportation, food, manufacturing, finance, leisure and recreation and media. It is well known for its Shangri-La Hotels and Resorts and luxury property unit Kerry Properties Ltd., which has extensive operations in Hong Kong and mainland China.
