MANILA – SM Prime Holdings Inc is ramping up its residential launches this year, including a maiden project in China and a foray into the low-cost market segment in the Philippines.

SM Prime executive vice president and chief financial officer Jeffrey Lim last week said its residential arm SM Development Corp (SMDC) is shelling out P15-18 billion this year to bankroll its expansion.

This year, SMDC is bringing to the market 4-5 new projects, offering 12,000 to 14,000 units valued at P36-42 billion based on an average selling price of P3 million per unit.

Including expansion phases of existing residential towers, SMDC will launch 7-8 projects this year. Last year, the property developer rolled out 2 new projects and 3 expansion towers.

“We see a lot of demand continuing. Last December, we were able to book P4 billion in sales – we did one of about P5 billion before – but being able to consistently get into that range means there is a lot of demand for affordable residential condominiums,” Lim said.

Issues on the country’s mass transportation system have fuelled demand for condominium projects in prime locations.

“If we have developments near the workplace, they would rather buy and stay in that area rather than go home to their primary homes and spend 2-3 hours on travel time,” Lim said.

SMDC is also in the planning stage for its first low-cost residential project located “north or south of Luzon.”

“The horizontal is in because there is demand especially from overseas Filipino workers wanting to go in the lower range of P800,000 to P1.2 million,” Lim said.

Last year, SMDC unveiled Air Residences, the company’s “premium” residential project in Makati. Lim clarified that its pricing was “not very high,” but the quality of the finish was upgraded because the development was located in a premier location.

SM Prime is also bringing its expertise in residential development to China following the success of its malls.

“Our guys are starting to talk to one of the contractors. If we’re able to get all of this done, we can start it in the first half of this year,” Lim said. He previously said its newly acquired lot in Yangzhou and its property in Chengdu were ripe for residential developments, which will be located near the company’s shopping centers.

SM Prime is the holding firm for the mall, residential, office and leisure businesses of billionaire Henry Sy and family. With the consolidation of the Sy family’s real estate assets, the enlarged SM Prime is now in a position to undertake larger scale projects with the participation of all of its business units.

SM Prime is embarking on a five-year program that entails a capital spending budget of P400 billion to beef up its businesses that will double earnings by 2018.

The strong performance of its shopping malls and improving real estate sales lifted the earnings of SM Prime by 12 percent to P13.5 billion in the first nine months of last year.