SMDC allots P1B for Hacienda Looc project

SM Development Corp., a listed property development firm controlled by retail tycoon Henry Sy, will need around P1 billion to jumpstart the development of Hacienda Looc, a residential and beach resort community in Nasugbu, Batangas.

SMDC vice-chairman and chief executive officer Henry Sy Jr. said the company would spend about P1 billion for the development of the first phase of Hacienda Looc, which shall house a beach resort, a golf course, and residential communities.

Hacienda Looc consists of hills overlooking the South China Sea and 31 kilometers of coastline that include 13 beach coves.

"Construction will start this year.

It is expected to be completed in two years," Sy said.

Other projects of the company include NorthPointe Residences, a residential condominium in Quezon City and Baguio Residences, a condotel in Baguio City.

NorthPointe is located in a five-hectare property in Bago Bantay, Quezon City. Baguio Residences, on the other hand, is SMDC’s joint venture with the Government Service Insurance System.

It is envisioned as a condotel, servicing residents and visitors of the country’s summer capital.

Sy said the company continues to be on the lookout for projects that will deliver better returns to its shareholders.

SMDC reported a 45-percent jump in its net income last year to P523.49 million from P361.29 million in 2003.

Total revenues grew 76.9 percent to P725.36 million from P410.1 million, mainly coming from investment operations and from sale of real estate.

Gain on sale of real estate amounted to P213.16 million or more than six times the previous year’s P35.31 million.

Interest in fixed-income securities, on the other hand, dropped by 10.9 percent to P139.69 million from P156.81 million as a result of lower gross yield.

SMDC sold units in Phase of Chateau Elysee which is 99.8-percent complete as of 2004. The project is located in Parañaque and is undertaken by SMDC’s 85.5-percent-owned subsidiary SM Synergy Properties Inc.

SMDC was formed in 1974 as Ayala Fund Inc., a closed-end investment company. It changed its business name to SM Fund Inc. after the SM Group of Companies took over ownership in March 1986. The change of the company’s name also reflected its new thrust of property development in the real estate sector.

SMDC targets residential properties near the SM shopping malls. It is also considering ventures in tourism and entertainment to enhance mall operations. The securities investments business of the company is retained to provide a regular flow of earnings and cash while it is in the early stage of transformation.