SM Prime looking at P100 billion capex for 2024

SM Prime Holdings Inc. (SMPH) is looking at up to P100 billion for its capital expenditure (capex) program this year, with the firm awaiting the improvement of market conditions before launching its $1-billion real estate investment trust (REIT).

According to SMPH President Jeffrey Lim, the company is looking at a capex close to the P80-billion it earmarked in 2023 when bulk of the amount went to the firm’s shopping center, residential, and office business.

“I think we’re looking siguro (maybe) close to that number, or mga 100 (billion pesos),” he said in an interview on the sidelines of The Business Manual CEO Awards where he was one of the awardees on Sunday evening.

“May mga (there would be a) mix. We can go to the market naman eh,” he added, when asked how the capex would be funded.

For its planned REIT, Lim said the company is still waiting for market conditions to improve before this could be launched.

“We’ll see. We have to ano eh, we have to look at the market monitor, so there are plans,” he said.

“We’ll have to study and look at the market pa, so we just have to parang wait a bit, don’t get too excited,” he added.

SMPH had said it was looking to launch its REIT by the second half of 2023, which would, in turn, finance its reclamation project in Pasay City. It intends to raise $1 billion from the REIT, with the total valuation estimated at around $3.5 billion to $4.5 billion.

The REIT would initially cover between 12 to 15 malls from 30 to 35 fully matured shopping centers across the country, with the rest to be included in the future for the growth of the unit.

Sought for more details on the delay, SMPH Vice President for Investor Relations Alexander Pomento said liquidity remained a constraint given the size of the planned offering.

“It’s really just waiting for the market condition to improve, because we’re talking about a big-size company. Given the liquidity of the market, it’s a big constraint right, pero (but) the program is still there. It’s a question of when, not if,” he said on the sidelines of the same event.

“If the market condition improves along the way, then we’re ready. Pwedeng second quarter if really, market improves right, kasi ready naman kami eh (cause we’re ready),” he added.

SMPH ended the third quarter of 2023 with a P10.900-billion net income, up from P8.060 billion the same quarter in 2022. Revenues for the quarter climbed to P32.749 billion from P27.328 billion, while costs and expenses grew to P17.179 billion from P14.052 billion.

Its net income for the first nine months of the year stood at P30.767 billion, up from P22.433 billion. Revenues rose to P92.602 billion from P73.673 billion, while costs and expenses increased to P48.080 billion from P39.039 billion.

SMPH ended 2022 with 82 malls in the Philippines and seven shopping malls in China located in the cities of Xiamen, Jinjiang, Chengdu, Zibo, Chongqing, Tianjin, and Suzhou. 

It also had 64 residential projects, 18 office buildings, nine hotels, six convention centers, and two trade halls.

Its subsidiaries include SM Development Corp., Costa del Hamilo Inc., Tagaytay Resort Development Corp., SM Arena Complex Corp., SM Hotels and Conventions Corp., and SM Land (China) Limited. — DVM, GMA Integrated News