by Albert Castro

SM realty unit SM Development Corp. is allocating P4.5 billion as capital expenditures for the year, with about half reserved for landbank expansion.

SMDC aims to expand its portfolio of projects in the coming months eyeing to launch two to three new projects in the year with focus on putting developments around SM landmark malls.

SMDC is replicating its Mezza-type development in two new projects in Sucat and Pasay in brands Field Residences and Sea Residences.

Field Residences is a seven-hectare development beside SM Sucat mall and will be composed of six clusters of 15-storey condo units with a combined available unit of 1,700 while the Sea Residences will be a six-cluster project to be constructed in the vicinity of SM Mall of Asia with total available units of 2,600. The Sea Residences will be developed in three phases, with the first phase slated for completion by 2010.

The third one "Wind Residences" is also a clustered horizontal development to be located in Tagaytay.

Henry Sy Jr., chief executive officer of SMDC, said SMDC’s thrust is to offer "affordable but elegant" units to the country’s middle-income earners.

"The demand is always there for units that allow people to be within the city but with the option to be near the mall," said Sy.

To date, SMDC has five ongoing projects, namely: Chateau Elysee in Parañaque City; Lindenwood Residences in Muntinlupa; and the Mezza, Berkeley,and Grass Residences, all three of which are in Quezon City. Except for Lindenwood Residences, which is a residential subdivision, all are residential condominium projects.

Meanwhile, Roger Cabuñag, president of SMDC, said SMDC’s first-quarter real estate sales more than doubled to P575 million from P256 million last year as it rolled out more real-estate projects and veered away from being a investment portfolio company two years ago.

Cabuñag said gross profit from real estate operations reached P240 million, a 173-percent increase while earnings before interest and depreciation adjustment reached P104 million, an EBITDA margin of 62 percent.

Net income, however, was steady at P14 million, as the ongoing slump in the financial market hit the company, resulting in unrealized mark-to-market losses of P198 million. SMDC holds substantial marketable securities in its portfolio as part of its asset management operations and to support future operations.

"We are pleased with SMDC’s initial results for the year. We have started on the right track, as evidenced by the doubling of our sales revenues during the first three months of 2008," Cabuñag said.