MANILA, Philippines - Upscale realty firm Shang Properties Inc. is in talks with several banks to secure a long-term loan of up to P6.4 billion, which it intends to use to fund three large projects.
At the company’s annual stockholders meeting yesterday, Shang Properties chief finance officer Vicente P. Formoso said the firm would rather take on new debt rather than tap the equities market to take advantage of historically low interest rates.
Formoso noted that the company’s debt level has remained at a relatively low level, giving them enough elbow room to obtain loans to finance future growth.
Shang Properties is simultaneously constructing three major projects — One Shangri-La Place in Ortigas Center, Shangri-La Hotel at the Fort, and the Shang Salcedo Place in Makati – with a combined development cost of P37.3 billion. The amount includes the P1.8 billion earmarked for renovations of the existing Shangri-La mall, its parking building and its surroundings.
Amid a strong property market and an improving local economy, Shang Properties expects sales to continue to grow at a healthy pace, Formoso said.
Formoso said 2012 will “definitely be better” than last year due to the expected construction completion rates.
The company expects to generate P6 billion in sales from the 64-story Shang Salcedo Place, located on a 3,045-square meter lot in Salcedo Village. Estimated to cost around P5 billion, the project offers a total of 778 units which will be turned over to residents by 2015.
To capitalize on a resurgent property market, Shang Properties is bent on acquiring more properties, particularly in Makati. “We have identified two sites in Makati and we hope to complete negotiatins in the next coming months,” Formoso said.
Shang Properties’ largest development to date, One Shangri-La Place is on track for completion in 2014 with construction already reaching the 10th level.
One Shangri-La Place is a two-tower high rise residential development featuring 1,304 units that will rise atop the six-level Shangri-La mall expansion. Slated opening end this year, the new mall will be home to over 150 shops and a myriad of restaurants.
About 60 percent of the residential units had already been sold, generating sales revenues of P6.6 billion.
Meanwhile, the Shangri-La Hotel in Bonifacio Global City will account for P18 billion or bulk of the total expenditure program. Shang Properties holds a 40 percent stake in the project with Hong Kong-listed affiliate Shangri-La Asia Ltd. and Alphaland Development Inc. owning the balance.
The project will entail the construction of a 577-room Shangri-La Hotel as well as 97 serviced apartments and 99 luxurious residential condominium units.