SM Prime ready to launch real estate investment trust 

Sy-led property developer SM Prime Holdings Inc. is planning to list its own real estate investment trust (REIT) in the second half of 2023, according to a report by BusinessMirror.

Jeffrey C. Lim, SM Prime president, said the company expects to raise some $1 billion or about P55.5 billion from its REIT. Total valuation would be around $3.5 to $4 billion, which would be at least four times bigger than the current listed RL Commercial REIT Inc.

“So it’s purely initially shopping centers (REIT portfolio). We’re still doing some evaluation with bankers. And I think the key really is the timing. Because you know, interest rates are still very volatile. So we want to make sure that when we launch, it is something that is sustainable, and that we can deliver our commitments,” Lim said on the sidelines of the company’s annual stockholders’ meeting.

SM Prime currently has 82 malls in the Philippines.

Proceeds of the REIT listing will be used for the company’s plan to reclaim some 360 hectares of land in Pasay, situated across SM’s Mall of Asia.

Lim said the company will spend a total of $2 billion for the entire reclamation project, but it would take some three years for the entire development to be completed.

“And I don’t think we will be spending the entire $2 billion in one year. So whatever we raised now from the REITs, we can use it up to probably end or middle of next year. And then the REITs should also roll. So we may inject additional assets in the future and then raise additional funds to fund the requirements.”

This new reclamation project in Pasay City will be connected to the Mall of Asia Complex, which is also a reclaimed-land project.

Pasay City is the joint venture partner of SM Group, which will undertake to develop the actual raw land reclamation and horizontal development works. The company has finalized the selection of consultants and contractors from a roster of reputable companies with proven global reclamation and dredging experience to ensure the “proper and responsible implementation” of the project.

SM Prime is also scheduled to open three new malls and expands certain malls in the Philippines this year, which will provide an additional 200,000 square meters of gross floor area. These new shopping malls will be in Bataan, San Pedro in Laguna and Sto. Tomas in Batangas.

SM Prime said it will spend some P80 billion in capital expenditures this year to continue its expansion plans in its key business units, which will provide the company a stronger presence in major areas across the country.

Lim said there the company will build four new malls by next year.

For its residential business segment, SM Prime said it aims to launch 15,000 to 20,000 residential units, subject to government approval of licenses to sell. SM Prime is set to launch Lanson Place Hotel and Serviced Suites in Mall of Asia Complex in Pasay City this year.