MANILA -Sy-led SM Prime Holdings is planning to launch the country’s biggest real estate investment trust (REIT) listing in the second half of 2023 via a $1-billion initial public offering, company president Jeffrey Lim said on Tuesday.
Lim said they were in discussions with advisors for the IPO but added that plans could be delayed if market conditions would prove unstable.
“I think the key really is timing because interest rates are still very volatile,” Lim said after the property giant held its annual stockholders’ meeting on Tuesday.
SM Prime, whose initial REIT portfolio will feature shopping malls in the Philippines, is the only remaining property giant in the country without REIT presence. The largest REIT thus far was Robinsons Land’s RL Commercial REIT, which raised P23.5 billion during its debut in 2021.
Lim said on Tuesday they “saved the best for last”.
SM Prime is targeting a valuation of $3.5 billion to $4 billion and will have 12-15 shopping malls in its portfolio, he said. The company, which has 82 shopping malls in the Philippines, has yet to finalize the specific mall assets to be included in the REIT.
Proceeds will be used to support SM Prime’s 2023 capital spending budget of P80 billion and the completion of its P100-billion Manila Bay reclamation project, company chief finance officer John Nai Peng C. Ong said on Tuesday.
The City of Pasay granted SM Prime the notice to proceed with the 360-hectare reclamation project in 2019, a previous announcement showed.
“For the reclamation, the commitment is three to four years. I think the main priority is to reclaim the land and, by next year, hopefully you will see the entire three islands up,” Lim said.
“It’s a mixed-use development,” he added.
According to Lim, they will open three shopping malls in the Philippines this year in Bataan, San Pedro (Laguna) and Santo Tomas (Batangas).
Jose Mari Banzon, president of SM Development Corp., said they will launch 10 projects with 20,000 units worth P80 billion in 2023.
The developer will also start to sell affordable housing lots in provinces such as Tarlac, Pampanga, Cagayan de Oro, Bacolod and Davao.
SM Prime ended 2022 with a net income of P30.1 billion, up 38 percent, while revenues jumped 29 percent to P105.8 billion. Malls account for 47 percent of total sales. By the end of year, shopping mall revenues surged 106.6 percent to P49.8 billion.
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