SM Prime seeks $1 billion from listing of REIT


The country’s largest mall operator SM Prime Holdings Inc. is aiming to list its real estate investment trust (REIT) in the second half of the year to raise $1 billion.

SM Prime president Jeffrey Lim made the announcement during the company’s annual stockholders’ meeting in Pasay City Tuesday.

Lim said they have started the process of incorporating the REIT company and are now in discussion with its advisers, including banks, accounting and legal.

“We can launch the REIT by the second half of this year, of course subject to market conditions, especially now that interest rates still keep on moving up,” he said.

In a press conference, Lim said the total valuation for its REIT listing will be around $3.5 billion to $4 billion.

He said the company’s REIT unit will initially involve 12 to 15 of its shopping centers.

SM Prime currently owns and operates 82 shopping malls in the country and seven malls in China.

“And I think right now, probably we have 30 to 35 (shopping malls) are fully matured. So, we can easily transfer 12 to 15 into the REIT, and then the rest will be in the future for the growth of the SM REIT,” Lim said.

SM Prime chief finance officer John Nai Peng Ong said proceeds from the REIT listing will be used for the firm’s expansion projects.

“If we will be able to proceed with it, that proceeds of the USD1 billion will be used for the SM Prime’s expansion projects –for our recurring business, malls, residences, commercial and hotels but also including Bay City reclamation project here in Pasay,” Ong added.

The 62-hectare Island A of SM Prime’s reclamation project has already emerged from the sea. The company targets Islands B and C to shape up in second half of 2024.

A big chunk of the REIT proceeds will finance the reclamation project.

Meanwhile, SM Prime sets a capital expenditure of P80 billion this year.


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