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SM Prime allots P80B for 2023 capex

Sy-led property developer SM Prime Holdings Inc. (SMPH) has earmarked P80 billion for its capital expenditure (capex) program this year, with the bulk going to its mall and primary residences businesses.

According to SMPH chief finance officer John Nai Peng Ong, the amount will be purely for the firm's shopping center, residential, and office businesses, with 10% going to leisure, commercial, and hotel and convention centers.

“We looked after increased collection efficiencies and collections coming from the improved results that we’re expecting for year 2023, so that means in specific terms we’re looking at around 15% to 20% only of our capex — recurring — to be coming from external funding,” he said.

“What we are looking at is potentially increasing the external funding would be coming from the Bay City reclamation, but with the potential REIT (real estate investment trust) then that can address partly the requirements of the reclamation project,” he added.

SMPH is looking to generate $1 billion from its REIT, with proceeds then going to its 360-hectare reclamation development in Pasay City along the Mall of Asia Complex.

The firm currently has 82 malls across the country, with three set to be opened this year — SM City Bataan, SM Center San Pedro, and SM City Sto. Tomas — which will add some 0.2 million square meters to the gross floor area (GFA).

It also intends to launch one new mall in Yangzhou, China this year, adding 1.2 million square meters of GFA.

SMPH president Jeffrey Lim said mall operations have already significantly recovered after the easing of restrictions in the first quarter of 2022.

“We have started charging full rentals as of the second half, July, of last year, and occupancy are actually at pre-pandemic levels,” he said during the company’s annual stockholders’ meeting (ASM) in Pasay City.

“In terms of traffic, weekends, we’re actually pre-pandemic levels already, so we are very positive for 2023 given that it’s all open now and based on the first-half traffic count that we’re seeing in the malls, we are very positive in the outcome of mall operations in 2023,” he added.

For its residential business, SM Development Corp. president Jose Mari Banzon said the firm plans to launch 10 projects this year, covering 20,000 units estimated at around P80 billion.

SMPH’s business segments include residential, commercial, and hotels and convention centers, and malls with 82 shopping centers across the country.

Aside from SMDC, its subsidiaries include Costa del Hamilo Inc., Tagaytay Resort Development Corp., SM Arena Complex Corporation, SM Hotels and Conventions Corp., and SM Land (China) Limited.

SMPH recorded a 38% increase in its 2022 net income to P30.1 b billion, as consolidated revenues jumped by 29% to P82.3 billion.

Shares in SMPH closed Tuesday down by P0.25 or 0.74% at P33.70 apiece from Monday’s finish of P33.95.—AOL, GMA Integrated News