SM Prime to borrow $100 million if REIT listing slips

MANILA, Philippines - SM Prime Holdings Inc., the country’s largest retail landlord, will look to raise up to $100 million from the debt market should its planned real estate investment trust (REIT) listing fail to take off this year.

On the sidelines of REIT conference yesterday, SM Prime executive vice-president Jeffrey C. Lim said the company would tap the debt market if it fails to launch a REIT offering this year. “We might either tap the bond market or just borrow money,” he said.

Lim said the additional fund would be used to refinance debt.

SM Prime is spending P12.1 billion this year, P8 billion of which will go to its domestic expansion while P4 billion will be spent for its expansion in China.      

This year, SM Prime is slated to open four new malls – SM City Novaliches in Quezon City; SM City Tarlac; and SM City Calamba and SM Supercenter San Pablo, both in the province of Laguna. These would bring the company’s s total malls to 40 by the end of the year, of which 16 are in Metro Manila and the others are spread out nationwide. The 40 malls will have an estimated combined gross floor area (GFA) of 4.8 million square meters.

SM Prime is targeting to put up two malls each year in China to bring the total number of malls in the mainland to 10 by 2014 as it seeks to take its malls overseas public. It is scheduled to open its fourth mall in China, SM Suzhou, in the fourth quarter of the year. Located in the province of Jiangsu. SM Suzhou will have a GFA of approximately 70,000 sqm.

Two new malls also slated for opening are in Chonggqing and Zibo, which will add to the firm’s three existing malls there - SM Xiamen, Jinjiang and Chengdu.

SM Prime said it expects to add 300,000 sqm to its current gross leasable area of 4.5 million sqm this year and another 300,000 to 350,000 sqm next year.

For next year, SM Prime will start building malls in Gen. Santos City, Commonwealth Ave. in Quezon City, Lanang (second mall in Davao City) and its second mall in Cebu to be located in La Consolacion, South Reclamation project.

The company has allotted P6 billion over the next three years to develop two shopping malls within the reclaimed 240-hectare South Road Properties (SRP) in Cebu City.