SM Prime to start project on reclamation site by end-2025
SM Prime Holdings Inc. is set to begin by the end of the year the construction of a horizontal development as part of its $3-billion reclamation project in Manila Bay.
Jeffrey Lim, president of the real estate giant, told reporters on Tuesday they were on track to complete sand filling on the 360-hectare area within this year.
“We can start the horizontal development after that,” Lim said. He reiterated that the property needed to be turned over to the national government and Pasay City local government by 2028.
During their annual stockholders’ meeting, Lim said that they were already working on the final master plan for the project “to allow infrastructure work to begin as soon as possible.”
Roughly the size of around five Mall of Asia (MOA) complexes, the project will feature an integrated property development with offices, residences and a five-star hotel, among others. It will also be connected to the MOA complex, which also sits on reclaimed land.
SM Prime received a notice to proceed for the new reclamation project in 2019.
Also, Lim confirmed that they would not pursue the launch of their real estate investment trust (REIT) this year. He said it was “not a priority as of the moment because of market conditions.”
To recall, proceeds from the listing of SM Prime’s REIT were meant to bankroll several expansion plans, including this latest project.
However, Lim said they had other means of funding and that the REIT’s delay would have no effect on the progress of the project.
“We’re able to tap the debt market … we don’t intend to prioritize the REIT at this time. Not within the year,” he said.
P100-B expansion
SM Prime will spend P100 billion this year to expand its chain of malls, residential projects and other developments amid expectations that consumer demand will improve.
Of that amount, P67 billion will be set aside for SM Residences—its new residential brand—as well as other integrated property developments.
A total of P21 billion will be spent on expanding the company’s mall gross floor area by 205,400 square meters (sq m) to over 8 million sq m by the end of the year.
The mall segment remained SM Prime’s main profit driver in the first quarter. During that period, the company earned a record P11.7 billion, up by 11 percent.
Malls accounted for 69 percent of SM Prime’s total bottom line. This segment delivered a 13-percent jump in earnings with P8.1 billion.
The residential segment posted a 4-percent increase to P2.1 billion. The office and warehouse segment grew by 15 percent to P1.2 billion.
