Nov 082013

MANILA, Philippines – SM Prime Holdings Inc., which will hold most of the property-related assets of tycoon Henry Sy, has set a capital expenditure budget of more than P70 billion next year as it seeks to spur faster growth amid an expanding economy.

In an interview, SM Prime Holdings Inc. chief finance officer Jeffrey Lim said the bulk of the capital outlays for next year would go to shopping malls (P38.9 billion) and residential development (P18.8 billion). The total budget for malls includes the P18 billion allocated for the expansion of the group’s operations in China.

The group has earmarked P7.2 billion for commercial development (business process outsourcing buildings) and another P4.6 billion for hotels. It has also set aside P797 million for resorts/leisure.

SM Prime is opening two new malls next year – SM Cauayan and SM Angonon and the expansion phase of SM Bacolod and SM Lipa. By the end of 2014, SM Prime will have a total of 50 malls with a total estimated gross floor area of 6.6 million square meters.

In China, SM Prime SM Prime plans to open one mall per year in second and third tier cities. Slated for opening next year is Zibo, which will provide an additional 154,000 sqm of gross floor area (GFA). 

Also under construction is SM Tianjin, which will be SM Prime’s largest shopping center when it opens in 2015. It will have a total GFA of 540,000 sqm.

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It expects to have a total of seven malls in China by 2015 with total GFA of 1.5 million sqm. The company currently has five shopping centers in the cities of Xiamen, Jinjiang, Chegndu, Suzhou and Chongqing.

The group currently has 14 ongoing condominium projects all over Metro Manila excluding Wind Residences which is located in Tagaytay. Its total landbank is 133.1 hectares, 92.2 of which are located outside Metro Manila.

Its office building portfolio, on other hand, stands at 256,697 sqm in terms of floor areas and is seen to increase to 299,589 sqm by 2015 with the opening of ThreeE-com Center  at the MOA complex.

Just recently, the SM Group acquired five office buildings and some parcels of land within the E-Square Information Technology Park in Bonifacio Global City, further enlarging its office portfolio.

Lim said SM Prime would fund its capex requirements through a combination of internally-generated cash, debt and equity.

For 2015, the group is projecting total spending of $1.9 billion.

Moving forward, the group would continue to beef up landbank, continue aggressive rollout of BPO buildings, and maintain strong balance sheet. 

With the consolidation, SM Prime is expected to become a leading integrated real estate company in Asia with a market capitalization of $12.4 billion, revenues of $1.3 billion and total landbank of 825 hectares.

Lim said the full integration of the property would be completed in the next six months.

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