SM Prime to launch luxury residential project in 2025

Property developer SM Prime Holdings, Inc. (SMPH) unveiled its plan to enter the resilient luxury residential market, with a 200-hectare development in 2025.

The move to venture into the high-end market comes amid the persisting weakness in the middle-income residential market, which has been SMPH's residential unit's main market segment for the past few years.

The company said it has pipelined projects of different formats, with prices ranging from P25 million to over P100 million.

“The price adjustments will allow us to target a broader segment of the housing market. It will also enable us to better address the growing demand for affordable and quality housing, while contributing to the government's efforts to reduce the housing backlog,” said SMPH President Jeffrey Lim.

Part of this strategy involves consolidating all residential projects of SM Prime under the SM Residences brand, which will cover a range of offerings from economic, medium-cost, premium, and leisure developments.

SMPH said it earmarked over 1,000 hectares of land for its SM Residences projects, slated for development over the next five years. About 85% of which is earmarked for horizontal development.

“Our growth over the past 30 years has been largely driven by our market-leading position in the mall and retail segment,” said Lim. “As we move forward, our goal is to unlock the full potential of our extensive land bank through SM Residences and more integrated developments. This will enable us to sustain long-term growth across a broader business portfolio,” he said.

Property consultant Colliers Philippines and Leechiu Property Consultants earlier reported that the middle-income market, offering P3 million to P8 million projects, remained weak amid high interest and inflation rates.

The high-end and premium market segment remained resilient despite the current market environment.

Other property developers like Ayala Land Inc., Rockwell Land Inc., and Robinsons Land Corp. also launched high-end projects.

SMPH reported a 12% increase in consolidated net income in the first nine months to P33.9 billion from P30.1 billion a year earlier. Consolidated revenues reached P99.8 billion.

The group’s mall business, which accounts for 57% of the company’s consolidated revenues, reached P56.5 billion in total revenues in the first nine months of 2024, up 8% year-on-year.

Sales from the residential business amounted to P31.2 billion in revenues in the first three quarters of 2024, or 9% higher than in the same period last year.