SMDC is going horizontal as it prepares to launch subdivisions

MANILA - Henry Sy Jr., the eldest son of SM Group founder Henry Sy Sr., said SM Development Corporation (SMDC) could launch the first SM subdivisions in Cavite, Pampanga and Bulacan this year, as the mall and real estate developer ventures into horizontal projects for the first time.

Sy said they are "testing the markets with projects of a few hundred hectares each."

He said the house and lots will follow their current style of "5-star affordable, with lot sizes of as low as 35 square meters." If it proves feasible, Sy said they will launch full-scale.

Sy said they want to expand the range of their real estate developments, not because they have too many condominiums, but because the market in the Philippines remains very big.

Interestingly enough, based on SM Prime's 2015 annual report, SMDC has more condominiums than SM Prime Philippine malls have parking slots.

But Sy insists there has been no slackening of demand for condominiums.

While Ayala Land has a target of 6,000 rooms for its Seda Hotel business by 2020, Sy said SM Prime Holdings is not prioritizing hospitality, because there isn't enough infrastructure to support an aggressive expansion in the hotel and tourism business.

Sy said, "Look at our airports and our roads, there is still too much to be done. Office space is better than tourism for us."

He said the SM Group will stay "more prudent" when it comes to infrastructure projects, as they do not want to build railways or roads. They only want to develop properties along new roads and railways.