SM Prime profit hits all-time high on robust mall business

Property giant SM Prime Holdings Inc. saw its earnings in the first half climb by 13 percent to P22.1 billion, its biggest profit in a single semester, driven by higher gains across all its businesses.

In the second quarter alone, SM Prime’s earnings expanded by 16 percent to P11.6 billion, while revenues grew by a tenth to P34 billion.

The Sy-led company on Monday said consolidated revenues in the first semester had risen by 8 percent to P64.7 billion from the past year.

“SM Prime’s growth in the first half of 2024 remains steady as we realize value from our past expansion projects across our business portfolio,” SM Prime president Jeffrey Lim said in a statement.

“We are determined to continue expanding our core businesses across the Philippines, and introduce innovative and bigger projects in the coming years,” Lim added.

Revenues from the mall business reached P37.5 billion, up by 8 percent, driven by growth in mall rental revenues.

At the same time, the residential business under SM Development Corp. increased by 8 percent to P18.9 billion.

However, reservation sales, a key indicator of future residential business revenue trajectory, fell by 41.31 percent to P40.2 billion in the first semester.

Earlier, real estate consultant firms Colliers Philippines and Leechiu Property Consultants reported that uptake in the residential segment, particularly in Metro Manila, remained weak in the January to June period, mostly due to high interest rates.

They noted that developers were leaning more toward launching premium projects, as target clients in this segment were less affected by the high-interest rate environment.

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SM Prime’s office, hotel and convention center segments reported a combined P7 billion in revenues in the first six months, representing a 13-percent uptick.

The property giant previously said it would spend P100 billion in capital outlays this year, mostly to fund the launch of four new local malls spanning 400,000 square meters (sq m) and 10,000 residential units in northern Luzon, the Visayas and Mindanao.

The company already opened its third mall in Caloocan City in May that covers around 90,000 sq m of retail space.

In June, SM Prime listed its P25-billion bonds at the Philippine Dealing and Exchange Corp., marking the completion of its P100-billion long-term bond program.