SM Prime to borrow P5 B to fund 2012 capex

MANILA, Philippines - SM Prime Holdings Inc., the country’s largest retail landlord, is planning to raise P5 billion through a syndicated loan facility to help fund its 2012 capital expenditures.

Jeffrey C. Lim, executive vice-president and chief finance officer of SM Prime, said the company has set a P21-billion capital expenditure budget for next year to continue the expansion of its operations locally and in China.  

Lim said the loan, which will likely have a term of five to seven years, will be arranged by a group comprised of ING Bank, ANZ and Rizal Commercial Banking Corp.

SM Prime is opening five malls next year in Gen. Santos City, BF Sucat, Novaliches and Consolacion, Cebu.

Also opening in 2012 is SM Chongqing in southwestern China, which will have a gross floor area of 146,323 square meters. The project, with a total investment of around 900 million yuans, will be developed in two phases and will be SM Prime’s fifth mall in China.

To ensure sustained growth, the company is looking to acquire a five-hectare property located in Xinxiang, China which has a population of about 5.71 million as of 2010.

The property is owned by the Chinese government.

The group’s retail sales in China have grown more than 11.5 percent in the past five years. SM Prime intends to open at least one new mall per year in the world’s second largest economy.

SM Prime’s total gross floor area is expected to reach 6.2 million square meters by end-2012, 19.2 percent higher than this year’s estimated GLA of 5.2 million sqm.

By yearend, SM Prime’s total branch network is seen to hit 43 across the country.

SM Gen. Santos City will be the group’s third largest mall in Mindanao after SM City Davao renovated and SM Lanang opened. It will rise on an eight-hectare leased prime property along Santiago Blvd and San Miguel within the central business district of Gen. Santos.

The company is also gearing up to open its biggest mall, SM Tianjin, with a floor area of 530,000 sqm., in the second quarter of 2014. The mall will feature three oval-shaped arch buildings, showcasing the latest and the best in mall design and build quality.

Also slated for opening in 2014 is the P4.5-billion SM Seaside City Cebu, which is expected to become the biggest shopping mall in Cebu and the group’s biggest next to SM CityNorth Edsa, Mall of Asia along Roxas Blvd. and SM Megamall in Mandaluyong. The project, with a gross floor area of 241,600 sqm, forms part of the P20-billion, 30-hectare integrated development project at South Road Properties (SRP) dubbed SM Seaside Complex.