SM spending P65 B for 5 new malls

MANILA, Philippines – SM Prime Holdings Inc., the listed property developer of tycoon Henry Sy, is pouring in an estimated P65 billion this year to build at least five new malls in the Philippines, its top official said.

“It will be about P60 to P65 billion,” SM Prime president Jeffrey Lim said in an interview.

To fund the capital expenditures, SMPH plans to go back to the debt market, possibly in the first quarter of the year to raise P15 to P20 billion in retail treasury bonds (RTBs).

“It’s part of our shelf registration of P60 billion,” Lim said, referring to the company’s three-year debt program registered with the Securities and Exchange Commission (SEC).

In July last year, SMPH company launched a P10 billion retail bond offer, the first tranche of the three-year P60 billion funding program.

Lim said despite the increase in interest rates by US Federal Reserve last December, it is still a good time for corporates to borrow. “It depends on the needs but generally, it’s a good time to borrow now,” he said.

As the Sy group’s property arm, SMPH is the largest integrated property developer in the Philippines with interests in malls, residences, offices, hotels and convention centers as well as tourism-related property developments.

In the third quarter of 2016, the company posted a 15 percent net income to P4.9 billion from P4.2 billion a year ago.

At present, the company has 58 malls in the Philippines and six in China with a gross floor area of 8.5 million sqm. It opened SM East Ortigas last December and SM City Tianjin.

By the end of 2016, SMPH has a combined GFA of almost nine million sqm.