SMDC all set for growth, prepared to face market resurgence

5 minutes min. read

The good guys at SM Development Corp. (SMDC) will be resilient to challenges and ready to build a nation of homeowners, declared company president Jose Mari Banzon during “InqTalks: A Dialogue with The Experts.”

The good guys at SM Development Corp. (SMDC) will be resilient to challenges and ready to build a nation of homeowners, declared company president Jose Mari Banzon during “InqTalks: A Dialogue with The Experts.”

SMDC Investments and the Market

Banzon was specifically bullish about the residential segment.

“We are very positive about the future. We anticipate a resurgence in residential property sales both from end-users and from investors,” he said. “Definitely, SMDC is very much prepared to face this resurgence.”

Over the COVID-19 pandemic, while many real estate products suffered a slump, residential offerings maintained brisk sales. However, Banzon claimed more remained ripe for the taking. Many assumed a wait-and-see attitude since the hard lockdowns in 2020. Encouraged by a deescalation, they are eager to invest.

Banzon first pointed to overseas Filipinos, with record-breaking remittances of $34.9 billion in 2021 and an expected increase of 4 percent this year. The numbers could presage a decisive comeback, Filipinos based in thriving economies like the Middle East taking the lead.

What the Investor Market is Looking For

“We have also seen a revival in interest in the investor market looking for rental yields because workers have started coming back to the office, students started coming back to school for face-to-face classes,” added Banzon. Projects in Makati and the Bay Area— including Shell and Shore Residences, and Jazz and Air Residences—recorded 80- to 90-percent occupancy, mostly from tenants and renters, even in a soft economy. As things pick up, vacancies will only narrow.

The inflation occurring worldwide will inform homebuyers, too, he noted. “Traditionally, the best hedge against inflation is real estate.”

To ensure growth, SMDC will cling to the very reputation that has helped it become the nation’s largest and fastest-growing real estate developer.

SMDC will continue offering bespoke homes in accessible spots, where residents enjoy resort-like amenities and hotel-like services. Projects will foster an enriching community life and champion sustainability. They will be pioneering, world-class and sustainable environments delivering on style, comfort and convenience.

Such a successful model emanates from SMDC’s understanding that it is a cog in the bigger machinery, explained Banzon. “We belong to the SM Group where we maximize the synergies with other SM companies.”

Intergrated Mall Lifestyle

Promoting the “integrated mall lifestyle,” SMDC ensures that it either builds near an SM mall or allots for a retail component. Trees Residences has The Strip; Sun Residences has Sun Mall. Other addresses have a Savemore, Hypermarket or Alfamart. SMDC also hosts banks, salons, restaurants, etc.

Property management is another forte for SMDC. Banzon said: “I encourage [sellers] to bring their potential buyers to our developments. We have developments … turned over in the last 10 years [that], if you go there, it’s still brand-new because … it’s well-managed.” All those combine to bring capital appreciation, he noted.

If the makings of the Filipino’s ideal home evolve, as they do, Banzon assured homebuyers that SMDC would be prepared to recalibrate. Undertakings outside Metro Manila offer evidence.

“[W]hen there was a lockdown … and people started working from home, … they [have wanted] to be outside Metro Manila where there is more open space, there is more green, fresh air,” he said. “SMDC realized this, and we developed medium-rise condominiums in Baliuag, Bulacan (Joy Residences), Santa Rosa (Calm Residences), even Cagayan De Oro (Vail Residences) and Iloilo (Glade Residences).”

SMDC has successfully penetrated key cities and regions like Calabarzon and Central Luzon, where 2021 growth rates of 7.6 and 7.4 percent, respectively, outpaced the national average.

The builder’s adaptation and agility have been backed by a strong balance sheet, a formidable land bank and an ageless resilience.
“You know the most important raw material for a developer is its landbank, and we have not only a huge landbank… Our properties are in very prime locations,” he said. Homebuyers should also trust SMDC’s cash flow that “could sustain [it during] a crisis,” just like this long-drawn battle with COVID-19.

“SMDC has always been flexible and versatile,” Banzon revealed. “We keep our ears close to the ground, find out what the buyers are looking for and develop our products accordingly.”

SMDC, he concluded, was “very committed to … provide Filipinos their dream homes so you can be sure that we’ll be coming up with more innovative products.”