SM Prime cautious on new residential launches

SM Prime Holdings Inc., the property arm of the SM Group, remains cautious about launching new residential projects for the rest of the year, according to Cris Noel Torres, SM Prime's executive vice president. Torres stated that the company is taking a cautious approach, closely monitoring market reactions before committing to any core or premium residential developments. SM Prime president Jeffrey Lim echoed this caution, revealing that the company does not have any residential launches planned for Metro Manila this year.

Despite the cautious stance, SM Prime still possesses a substantial inventory of residential units, currently numbering around 29,791. The total value of this inventory is estimated at P200.4 billion. Of these units, only 13 percent have been ready-for-occupancy (RFO), meaning that 87 percent are still in the process of development.

John Ong, SM Prime's chief finance officer, emphasized the company's focus on accelerating the completion of these ongoing projects to boost reservation take-up, as RFOs tend to attract reservations more quickly.

The company's residential revenues, encompassing core, leisure, and premium offerings, declined by 1 percent to P20.6 billion during the first half of the year, down from P20.9 billion in the same period last year. Reservation sales for the period reached P24.8 billion, a 4 percent year-on-year decrease. Despite this decline, SM Prime president Jeffrey Lim remains optimistic for the second half of the year, projecting residential revenues to range between P30 billion and P35 billion.

Last year, SM Prime entered the premium primary residential market with the launch of the Signature Series by SM Residences. This new brand enables the company to cater to a diverse range of market segments, from economic housing to ultra-luxury residences.