SM, Ayala Land proceed with expansion projects
Construction cost starts swelling
By Elizabeth Sanchez-Lacson
Philippine Daily Inquirer
First Posted 01:35:00 07/07/2008
MANILA, Philippines--Property firms continue to pursue large-scale projects despite swelling construction costs.
The SM Group, for one, is pushing through with planned expansions at its sprawling Mall of Asia property in Pasay City.
SM Prime Holdings Inc. president Hans Sy said the group was building its second business process outsourcing (BPO) building, One e-Com Tower 2, by the end of the year. It will have a floor area of 100,000 square meters.
Sy said the SM Group is spending as much as P2 billion for its One e-Com Tower 2.
"Overseas remittances continue to increase and BPOs have not stopped expanding," Sy said.
Aside from this, the group is also set to build a new sports stadium on a two-hectare lot across from its SMX Convention Center. The stadium will be a venue for major sports events such as basketball, boxing as well as concerts and could accommodate 15,000 people.
Meantime, Ayala Land Inc. (ALI) said there would be no delays in its real-estate projects as the property firm copes with higher construction costs and compressed profit margins.
"Take-up has been very good. We're more than 40-percent sold out at [residential project] The East Tower at the Serendra (in Fort Bonifacio in Taguig City). Sales are holding up in spite of a significant price increase," Ayala Land president Jaime Ayala said.
The company has implemented an average increase of 20 percent across its projects to cover for the rise in steel and cement prices.
Steel prices, which have doubled from last year, account for 10 percent of ALI's construction costs.
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