SM Prime to invest P88B for new malls

The country’s leading shopping mall developer SM Prime Holdings Inc. expects to invest P88 billion over the next three years to expand its shopping mall portfolio in the Philippines and China.

SM Prime also announced Tuesday a 15-percent year-on-year growth in first quarter net profit to P2.79 billion as revenues were boosted by same-store rental revenue expansion alongside the opening of new malls.

“Owing to the consumer-centric business model which we have developed over the years, and our presence in most of the country’s growth centers, we were a natural beneficiary of the country’s strong economy,” SM Prime president Hans Sy told stockholders in a meeting.

SM Prime chief finance officer Jeffrey Lim said gross floor area (GFA) in the Philippines and China would likely grow by 7 to 10 percent each year through 2015 as the group invests P88 billion for expansion. Capital spending this year is estimated at P35 billion while for 2014 and 2015, outlays are estimated at P26 billion and P27 billion, respectively.

Half of the expansion requirements will come from internally generated funds while the rest will be funded by external borrowings, Lim said.

By end-2013, SM Prime will have about 6.1 million square meters in GFA in the Philippines alone.

At present, SM Prime owns and operates 46 stores in the Philippines and five in China.

SM Prime’s revenues rose by 11 percent in the first quarter to P7.83 billion. Rental revenue, accounting for 86 percent of total revenues, grew by 12 percent to P6.73 billion year-on-year.