SM Prime eyes P180B in capex for next 3 years
Sy family-led SM Prime Holdings Inc. (SMPH), one of the largest property firms in the Southeast Asian region, intends to earmark P60 billion for capital outlays yearly for the next three years to support its development roadmap that aims to double profits by 2018.
The group is also continuing its expansion in China and evaluating opportunities elsewhere in Southeast Asia. To date, SMPH has received proposals to be part of integrated property developments across the region.
SMPH has set a goal of doubling net income to P32 billion by 2018. In a briefing after Tuesday’s annual stockholders meeting, top officials said the group was on track to meeting this goal.
SMPH will open this year five malls in the Philippines—SM City Trece Martires in Cavite; Cherry Congressional; SM City San Jose in Del Monte, Bulacan; Cherry Antipolo, and SM City East Ortigas.
Apart from building new malls, SMPH is also expanding some of its mature malls to boost revenues. These will include SM City Clark, one of the three SM malls in Pampanga. This is expected to be completed by the third quarter of the year, increasing not only retail space but also opening up office space catering to business process outsourcing (BPO) locators.
SMPH has also earmarked P1.5 billion for the redevlopment of Mall of Asia, which will expand its selling area by about a third and become the country’s first shopping mall with a football field on the roofdeck. Once completed, the mall will have almost 700,000 square meters (sq m) of retail area, surpassing Megamall’s 474,000 sq m.
This year, SMPH reported that business started a bit slow. “But we’ve seen good pick-up in February and March. I’d say we’re very much on track [to achieve the targets],” SMPH president Hans Sy said.
In China, SMPH has been building malls in second- and third-tier cities, of which Sy said were “enjoying very good growth.” The newest mall in Tianjin is set to open by the end of the year.
One big challenge SMPH was facing in its expansion in China, Sy said, was enlisting human resources. However, he said having 56 malls in the Philippines was a big advantage in this regard.
For residential arm SM Development Corp., SMPH chair Henry Sy Jr. said the first residential project would soon start construction behind an existing SM mall in Chengdu. Selling of residential units will begin by 2017, he added. The first of the four towers will break ground soon and the other towers will follow soon.
“This will be our test ground. We are already looking for other locations,” he said, adding that SMDC could build a residential property near the mall.
Sy Jr. said SMDC would also diversify its offering by launching a high-end or premier brand while building more of the medium rise structures to cater to a broader market.
SMPH chief finance officer Jeffrey Lim said the plan for this year was to launch about 2,000 economic housing units or those worth below P1 million. This year, the plan is to roll out about 12,000 to 15,000 housing units.
“We are harnessing the strong synergies between our property businesses, in line with our vision to create community development by building and operating more integrated and sustainable lifestyle cities across the country,” Hans Sy said.
