NextGen Day

The largest mall operator in the nation, SM Prime Holdings, Inc., hopes to raise $1 billion by listing a real estate investment trust (REIT) in the second half of the year.

Tuesday in Pasay City, at the company’s annual shareholders meeting, SM Prime president Jeffrey Lim made the declaration.

According to Lim, they have begun the process of forming the REIT firm and are currently in consultation with its advisors, which include banks, accounting, and legal professionals.

Given current market conditions and the fact that interest rates are continuously rising, he predicted that the REIT may go public by the second half of this year.

In a press conference, Lim stated that the REIT’s offering will have a total valuation of between US$3.5 billion and US$4 billion.

According to him, 12 to 15 of the company’s shopping complexes will initially be included in the REIT entity.

SM Prime now owns and manages seven malls in China and 82 malls around the Philippines.

“And I believe that we currently have 30 to 35 (shopping complexes) that are fully developed. Therefore, we can simply transfer 12 to 15 into the REIT, and the remaining funds would be used for the expansion of SM REIT in the future, according to Lim.

The money raised from the REIT offering, according to SM Prime Chief Financial Officer John Nai Peng Ong, will go toward the company’s expansion plans.

“If we are successful, the USD 1 billion proceeds will be used for the SM Prime expansion projects—for our ongoing business, malls, homes, businesses, and hotels, as well as the Bay City reclamation project here in Pasay,” Ong continued.

Reclamation undertaking

The reclamation project of SM Prime’s 62-hectare Island A has already protruded from the water. In the second half of 2024, the business anticipates Islands B and C to develop.

The project for reclamation will be financed in large part by REIT earnings.

SM Prime, however, plans to spend PHP 80 billion on capital projects this year.

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