SM Prime sets sights on premium residential development

By Revin Mikhael D. Ochave, Reporter

REAL ESTATE company SM Prime Holdings, Inc. is entering the country’s premium residential market.

“The premium segment is shock-resistant,” SM Prime Holdings Executive Vice-President and Premium Residential Line Head Jose Juan Z. Jugo said in an interview with ����ý.

“It can weather storms better than the broader market. It is more resilient. SM is seeing the opportunity to move to a wider spectrum of residential products with the premium market. There is enough space in this segment for another large player,” he added.

In November last year, SM Prime announced the expansion of its residential portfolio into the high-end horizontal and vertical principal homes, bolstering its current economic, mid-range, and leisure residential offerings.

The company is aiming to launch its first upscale residential project this year. It is a master-planned subdivision designed with a strong focus on sustainability, convenience, and community.

“We’re ready to work hard. We already are working hard. Definitely, this first project will make a significant impact in the high-end segment,” Mr. Jugo said.

“SM Prime is so big. When a company is this big, you have to start thinking about where you are going to get the growth. What an organization this large needs is a new engine. Hopefully, this will provide that to a certain extent,” he added.

He noted that the new venture aims to leverage the company’s expertise in creating upscale, large-scale developments, similar to its success in the mall sector.

“These new SM malls, they’re beautiful and very upscale. However, they also have not left behind the broader segment in the retail market. They’ve been able to adapt from being a very broad-based market leader to now entering and succeeding in high-end retail,” he said.

“If we do what we’re expected to do, we now become a full-line residential developer, from economic all the way to ultra-luxury. We’re trying our best to move the needle toward the upper spectrum,” he added.

Mr. Jugo brings over 23 years of real estate experience to SM’s new venture. He previously served as the executive vice-president of listed luxury property developer Shang Properties, Inc. until July 2023.

He was also the managing director of Ayala Land Premier, Inc., vice-president of Ayala Land, Inc., and director, chief executive officer, and non-independent executive director of Malaysian real estate developer MCT Bhd., now known as Avaland Bhd.

Mr. Jugo has a graduate degree from Escuela Superior de Estudios de Marketing de Madrid and an undergraduate degree from De La Salle University.

“What can be expected is that, because we’re a very large company, it will be a continuing thing. We do not expect to do just one premium project and then call it a day. It will be a succeeding series of high-end projects if we do things right,” Mr. Jugo said.

“The land is there. The resources are there. The commitment of the principals is there. We are being given leeway to grow our own organization the way we think we should to succeed. It will be a long-term thing,” he added.

Real estate consultancy firm Colliers Philippines said that demand for premium residential units is recovering, led by a cash-rich market.

It also advised property developers to prioritize the upscale and luxury segments due to steady demand amid market challenges.

“We’re creating our own brand. Right now, we are all SM Development Corp. (SMDC). However, we will eventually have our own brand, logo, and even our own legal entity. It is a development company for the premium segment. SMDC will be mid-market. We will be upper market,” Mr. Jugo said.

“It’s a startup. I tell my team members that this is a startup. Even our mindset has to be different. We’re building the organization,” he added.

SM Prime has earmarked P100 billion in capital expenditure for its malls, residences, and integrated property developments this year.

For 2024, the company posted a 14% increase in its consolidated net income to P45.6 billion as revenue climbed by 10% to P140.4 billion.

SM Prime’s portfolio consists of 87 local malls, 22 office towers, and more than 185,000 residential units launched. It is the real estate subsidiary of Sy-led conglomerate SM Investments Corp.