SM Prime cautious on new residential launches

MANILA, Philippines — SM Prime Holdings Inc., the integrated property arm of the SM Group, is keeping a cautious stance when it comes to residential project launches for the remainder of the year.

“We’re taking a deliberate approach with respect to residential,” SM Prime executive vice president Cris Noel Torres said.

“So for core and even premium, we’re taking a wait-and-see approach, checking how the market is reacting,” he said.

SM Prime president Jeffrey Lim, for his part, said there would be no launches yet this year for residential developments in Metro Manila as far the company is concerned.

Torres, however, said SM Prime still has quite a bit of inventory to work through, which the company will be focusing on selling.

SM Prime has inventory of around 29,791 units, with inventory sales value at P200.4 billion.

“Roughly 13 percent only of this 29,000 (units) are RFOs (ready-for-occupancy). That means 87 percent are ongoing developments. That means we are focused on hastening the completion of these in-process or ongoing inventories, as because we continue to see that RFOs tend to have a faster reservation take-up,” SM Prime  chief finance officer John Ong said.

SM Prime’s residential revenues, covering core, leisure and premium offerings, slipped by one percent to P20.6 billion during the first half from P20.9 billion last year on lower revenue recognition from prior-year sales.

Reservation sales during the period reached P24.8 billion, down by four percent year-on-year.

“I think for the second half we are targeting above that, probably in the range of P30 billion to P35 billion,” Lim said.

SM Prime last year launched a premium primary residential brand called Signature Series by SM Residences.

Its entry into the segment allows the company to serve every market segment, ranging from economic housing to ultra-luxury residences.