SM Prime sees 2024 as another banner year

GROWING EMPIRE SM City Caloocan, the 86th shopping mall of SM Prime, opened in May. —CONTRIBUTED PHOTO

With no major roadblocks in sight, real estate giant SM Prime Holdings Inc. expects to breach this year its P40-billion record earnings posted in 2023, according to a top official.

SM Prime president Jeffrey Lim told reporters earlier this week that their financial performance this year was “good so far,” pointing out they had reached their targets for the first half.

The Sy family-led company has yet to release its third-quarter earnings results.

READ: SM Prime H1 earnings up 13% to P22.1B

“It will probably be a banner year because it’s also our 30th year,” Lim said.

He said the recent typhoons may only slightly affect profits in the fourth quarter.

In the first half of the year, SM Prime netted a record P22.1 billion, up by 13 percent, due to growth in its mall and residential businesses.

SM Prime said it would intensify expansion activities in the coming years. It is now nearing its 100-branch mark in the Philippines.

Part of plans to raise capital was to launch its real estate investment trust (REIT) arm, which Lim said would likely be scheduled next year as interest rates begin to go down, thus creating a more optimistic market.

According to Lim, they will list the REIT in the Philippines and maintain the $1-billion size that was initially planned.

“It has to be of a size that will be attractive to foreign investors because you have to have the size and the liquidity,” Lim said, noting that they did not intend to sell more than 40 percent of the company to foreigners.

Improved economy, appetite

To recall, SM Prime previously announced plans to launch its REIT this year. However, volatile market conditions in the first half of the year discouraged the company from pursuing the much-anticipated stock market debut.

Proceeds from the listing of the REIT were meant to bankroll SM Prime’s several expansion plans, including a $3-billion reclamation project in Manila Bay that is set for completion in 2028.

Lim said they were “looking into it again now that interest rates are coming down.”

The Bangko Sentral ng Pilipinas has so far cut the benchmark interest rate of banks by 50 basis points to 6 percent.

This generally signals an improved economy, resulting in increased investor appetite and demand for equities.

But Lim also pointed out that raising funds through the REIT’s launch was “not really a priority,” especially since they had other funding sources.

In July, the subsidiaries of SM Prime and parent firm SM Investments Corp. jointly raised $500 million from the offshore debt market, marking the companies’ largest bond issuance abroad in a decade.

The European medium-term notes program was 3.2 times oversubscribed, with final demand reaching $1.6 billion. INQ