Property developer SM Prime Holdings Inc. disclosed Tuesday its plan to raise a record $1 billion from its real estate investment trust offering in the second half of 2023.
SMPH president Jeffrey Lim said in a news briefing following the annual stockholders meeting the company had started the process of incorporating an REIT unit that would initially own 12 to 15 malls in the Philippines.
“Hopefully we can launch the REIT by second half of the year subject to market conditions,” Lim said.
SM Prime owns 82 malls in the Philippines and seven malls in China. Of the 82 Philippine malls, 30 to 35 are fully mature, according to the company.
“We can initially transfer 12 to 15 mature malls into the REIT, and then the rest will be for the future for the growth of SM REIT,” Lim said.
SMPH is the remaining major property developer in the country that has not launched an REIT company.
SMPH said it would use the proceeds from the REIT listing to partially fund a $2-billion reclamation project in Pasay City.
The Bay City reclamation project, which will be connected to the Mall of Asia Complex, is a 360-hectare mixed-use development with various components such as mall, offices, residences, entertainment arena, hotel and convention center.
SMPH chief finance officer John Nai Peng Ong said the company earmarked P80 billion in capital expenditures for 2023 to expand its mall, residential, office and hotel businesses.
He said that for the residential business, the property firm lined up 10 new projects with total sales value of P80 billion.
Jose Mari Banzon, president of residential arm SM Development Corp. said these projects are mostly affordable to mid-rise projects located in key provinces.
Banzon said SMDC is also preparing to launch a new product line—affordable lots. SMDC will initially launch the new product in Tarlac, Pampanga, Cagayan de Oro, Davao and Bacolod.
Banzon said despite the rising interest rates, demand for residential units remained strong, particularly from overseas buyers.
He said at least 70 percent of SMDC’s sales came from overseas market, while 30 percent represented local buyers.
SM Prime registered a P30.1-billion consolidated net income in 2022, up by 38 percent from P21.8 billion in 2021.
Consolidated revenues grew 29 percent to P105.8 billion from P82.3 billion, while consolidated operating income climbed 52 percent to P49.2 billion from P32.4 billion.