I'm not sure that giving more memory to the program would make it run much better. Performances are much more bounded to the size and the count of displayed items than to memory usage. Nevertheless, I just tried again your file under Mac OS X on my i7 with 4 GB max allocated to the program and I didn't feel it ran so bad.
If you're under Windows, I think you can't go higher than 2 GB of memory with a 32 bits program. So try first a little less like -Xmx1900m.

You could also use the 64 bits version of the program, by installing a 64 bits version of Java on your system, then downloading Sweet Home 3D Jar executable file and running it with the following command: (for 4 GB of memory).

I would be pleased to know if it would work better.