SM Prime to build 3 BPO towers outside Manila
Property giant SM Prime Holdings (SMPH) expects to complete this year up to 2017 three new business process outsourcing (BPO) towers outside Metro Manila to complement its shopping mall complexes in Clark, Pampanga, Sta. Rosa, Laguna and Iloilo.
These three office towers—SM Clark BPO Towers, SM Sta. Rosa BPO and SM Iloilo Tower—are among the key projects in the pipeline to boost the company’s recurring earnings.
The office towers in Clark and Sta. Rosa were expected to be completed by the fourth quarter of this year while SM Iloilo Tower was slated for completion by the first half of 2017, SMPH said in a regulatory filing that also detailed a retail bond offering worth as much as P10 billion.
SMPH has earmarked P2.42 billion in capital outlays in the second half of this year to complete these three new commercial buildings.
SM Clark BPO Towers will be a commercial building adjacent to SM City Clark and will have a lot size of 6,090 square meters (sqms). The building will also have a gross floor area (GFA) of 67,296 sqms.
SM Sta. Rosa BPO will be adjacent to SM City Sta. Rosa with a lot size of 12,092 sqms. It will have a GFA of 30,000 sqms.
SM Iloilo Tower will be adjacent to SM City Iloilo and will have a lot size of 5,480 sqms. It will also have a GFA of 45,000 sqms.
Other office buildings expected to be completed by SMPH in 2017 are Three e-com Center and Cyber Building 1. It expects to complete the following year Four e-com Center and SRO Cebu-Building 1. By 2020, Six e-com Center will be completed.
Local credit watchdog Philippine Rating Services Corp. (Philratings) has given a triple-A rating (PRS Aaa) to SMPH’s proposed bond issue of P5 billion, which also has an attached oversubscription option of P5 billion.
The rating for SMPH’s outstanding bonds amounting to P39.99 billion was likewise maintained at “PRS Aaa,” the highest rating in Philratings’ scale.
Obligations rated “PRS Aaa” are deemed of the highest quality with minimal credit risk. This also means a firm’s capacity to meet its financial obligation is “extremely strong.”
Philratings said its rating reflected the following key considerations: SMPH’s strong financial profile; its solid brand equity and very good operational track record; well diversified portfolio, with components that complement each other; and continuous aggressive construction and expansion of development projects leading to significant growth going forward.
The consolidation of SM’s real estate properties made SMPH one of the biggest integrated developers in the Philippines. SMPH operates four core businesses: malls, residential, commercial, and hotel and convention centers.
As of end-March, SMPH already has 56 malls operating in the Philippines, with a total GFA of 7.3 million sqms. The company has likewise expanded its business outside the Philippines and currently operates six malls in China. These are located in the cities of Xiamen, Jinjiang, Chengdu, Suzhou, Chongqing and Zibo.
