SMDC won’t buy Kidney Institute property

MANILA, Philippines – Henry Sy-led SM Development Corp. (SMDC), the real estate arm of Henry Sy’s SM Investments Corp. (SMIC), will no longer buy the National Kidney Transplant Institute (NKTI) property in Quezon City.

In a disclosure to the Philippine Stock Exchange on Monday, July 15, SMDC said the National Housing Authority (NHA) agreed to return the company’s initial investment on condition it waives its rights over the property.

SMDC won the property – covering 1.63 hectares – in a bidding held by NHA on Oct. 16, 2012. The property is divided into two lots – one is currently being used as parking space while the other is subject of a dispute involving illegal settlers.

According to Cora Guidote, SMIC chief investor relations officer, SMDC pulled out of the deal because it did not want to get caught in a row between NHA and NKTI.

NKTI claimed the bidding held by NHA was illegal. It said it had the right to occupy the property under a presidential proclamation issued by the late former president Ferdinand Marcos in 1984.

NHA wanted to sell the property to pay off its obligations to other government-owned agencies.

SMDC already paid around P300 million of the P783-million purchase price of the property.

SMDC vice chairman and CEO Henry Sy Jr. told The Philippine Star that the company would instead focus on developing its land holdings in Metro Manila.

For 2013, SMDC allotted approximately P20 billion for capital expenditures. Of this amount, P13 billion would be spent for project development and P7 billion for land banking, it said.

Sy said they would raise funds to finance the capex.

SMDC recorded P7 billion in sales take-up, equivalent to 2,560 units, in the first quarter of 2013. To date, the company has 54,583 units in its portfolio – both completed and ongoing projects. The company has a land bank of 173 hectares, of which 63 hectares are in Metro Manila.

The SM property units recently announced a plan to merge and dislodge Ayala Land Inc. as the country’s biggest property group. – Rappler.com