SM Prime sets P33-B capital spending for ’25
Property giant SM Prime Holdings Inc. is shelling out P33 billion this year to expand its malls, hotels and offices in response to growing foot traffic and travel demand that can jolt consumer spending.
In a disclosure on Thursday, the Sy family-led mall operator said it was optimistic that election-related expenditures would bode well for their business, especially in retailing.
“We expect moderating inflation, easing interest rates and election-related spending to fuel our growth in 2025. Our malls should do well and our office, hotel and convention centers could provide additional upside,” SM Prime president Jeffrey Lim said.
Out of the total budget, P21 billion will go to expanding SM Prime’s mall gross floor area (GFA) by 205,400 square meters (sqm). Some 124,488 sqm of existing mall space will be redeveloped.
SM Prime projects its mall GFA to reach 8.08 million sqm by the end of year.
The listed property group will channel P6 billion to building two convention facilities, renovating hotel rooms and adding new restaurants to its existing hotel portfolio.
Another P6 billion will go to developing new office towers and work spaces in response to growing lease take up of its current inventory. This includes Six E-Com Center, a two-tower development within the Mall of Asia complex that is designed to cater to business process outsourcing firms.
Fundraising
As SM Prime lays out capital expenditure guidance, it is also beefing up its coffers with the slated P25-billion bond offering.
It is the second tranche of the company’s P100-billion bond program approved last year. The property developer raised P25 billion from the first tranche last year.
To complement this, SM Prime also plans to raise funds via a real estate investment trust (REIT) offering this year as it takes cues from the further cuts in interest rates that can boost investor appetite.
SM Prime had planned its REIT foray last year but volatile market conditions deterred the company.
In total, SM Prime intends to spend up to P110 billion this year to fund its mall business expansion and venture into both affordable and high-end residential segments.
