Property developer SM Prime Holdings Inc. (SMPH) said Tuesday it will postpone its planned $1-billion real estate investment trust (REIT) offering amid the current interest rate environment and market volatility.
SMPH president Jeffrey Lim said in a news briefing following the company’s annual stockholders meeting that borrowings and internally-generated funds would support most of the company’s requirements.
“Given the interest rate environment and market volatility, I don’t think we can do it [REIT offering] this year. But we will continue to assess [the market] as we move forward,” Lim said.
SMPH earlier planned to raise up to $1 billion through REIT of malls. The malls, with the total valuation estimated at around $3.5 billion to $4.5 billion, would initially cover 12 to 15 malls out of the 30 to 35 fully-matured shopping centers across the country.
SMPH is the only major property developer in the country that has yet to launch an REIT company.
The proceeds from the fund-raising was supposed to fund the planned reclamation project in Pasay City.
SMPH’s SM Smart City president Glen Ang said during the same press briefing the reclamation project is on track to be handed over by 2028,
“We are following our timeline. We have worked out a concept program in order to speed up, catch up on our timeline. so far we’re on track,” Ang said.
The reclamation project, which will be connected to the Mall of Asia (MOA) complex, is a 360-hectare mixed use development with various components including malls, offices, residences, entertainment arena, hotel and convention center.
SMPH allotted P100 billion for 2024 capital expenditures, of which 60 percent will be for the construction development and 40 percent for land banking activities and reclamation project.
It also plans to open four new malls in the Philippines this year, which will provide more than 400,000 square meters (sqm) of gross floor area (GFA).