SM Prime hikes 2015 capex to P80 B

MANILA, Philippines -SM Prime Holdings Inc., the umbrella property firm of Henry Sy’s SM Group, is hiking its spending by almost a fifth this year as it ramps up expansion of its mall empire, residential and office projects.

In an interview, SM senior vice-president for investor relations Cora P. Guidote told The STAR that SM Prime would take the lion’s share of the SM Group’s P80 billion capital expenditures this year.

Guidote said the real estate and shopping mall arm of SM Investments Corp. (SMIC) would invest P70 billion for its projects this year – 17 percent higher than the capex budget of P60 billion last year – while the retail and banking units of the group would each get P5 billion.

“On the parent company level, we’re okay in terms of funding. It’s up to SM Prime to do fundraising of its own. For funding, we encouraged the subsidiaries to be self-sufficient,” Guidote said.

SM Prime, the country’s largest mall developer, plans to further expand its empire of shopping centers across the country with the opening of four to five new branches this year.

New malls to be launched this year are SM Sangandaan in Caloocan, SM San Mateo in Rizal, SM Cabanatuan in Nueva Ecija, and SM Trece Martires in Cavite.

SM is also set to complete expansion of its mall in Iloilo this year.

SM Prime owns and operates 50 SM malls in the country at present, three of which are included on the world’s 10 largest malls.

Aside from upcoming new shopping malls, SM Prime through subsidiary SM Development Corp. (SMDC) is set to launch seven new residential projects this year.

SMDC also intends to push through with its maiden venture into low-cost horizontal development this 2015.

For its office developments, meanwhile, SM Prime plans to begin construction early this year of two new office buildings in Quezon City along EDSA and in Ortigas, that would beef up the SM Group’s portfolio by 160,000 square meters in gross floor area (GFA) upon completion by 2017.

SM Prime’s net income in the first three quarters of 2014 grew 12 percent year-on-year to P13.5 billion as revenues increased nine percent to P47.8 billion.

SMIC, the holding company of the Sy family, in 2013 merged its property assets under mall developer turned property conglomerate SM Prime.