SM Prime gears up for more mall openings

MANILA, Philippines — SM Prime Holdings Inc. is gearing up for another massive capital spending program for its various developments next year, with more new malls slated for opening.

The listed integrated property developer of the Sy family is looking to spend P100 billion to P110 billion for its capital expenditures next year, according to its president Jeffrey Lim.

The company has various options available for its funding sources to support its aggressive spending plan.

“The Euro Medium Term Note (EMTN), it’s there available for us if we want to tap into it. The program is there already so SM Prime will have to just evaluate. As we need the money, then we decide whether we can still do retail bond because we have shelf registration or if we need to tap the EMTN,” Lim said

SM Prime and SM Investments Corp. (SMIC) last May established a $3-billion multi-issuer EMTN program which will allow the companies to tap the offshore bond market to fund their continued growth and expansion.

SMIC raised $500 million from the first tranche of its EMTN program last July, marking its largest offshore bond issuance since 2014.

SM Prime also has an existing Securities and Exchange Commission-approved shelf registration of bonds worth P100 billion.

The company has raised P25 billion last June from the first tranche of the bond program.

For this year, SM Prime was originally looking at a P100-billion capital spending to support its various programs and expansion initiatives.

“Actually, our forecast this year is P100 billion, but I don’t think we’ll get to P100 billion actually. That’s more of a guide,” Lim said.

As the largest mall operator and developer in the Philippines, SM Prime is targeting to open five new malls next year.

Lim said these SM malls slated for opening in 2025 are in La Union, Laoag, Zamboanga and Santa Rosa in Laguna.

The location of the fifth mall to be opened for next year has not been identified.

SM Prime’s mall network in the country currently stands at 87.

This year, it opened SM City Caloocan in May and SM City J Mall in Cebu last month.

SM City San Fernando, La Union and SM City Laoag were supposed to open this year but have been included in next year’s pipeline.

SM Prime is targeting to have a portfolio of 100 malls in the country by the end of 2027 as it looks to further solidify its dominance in the Philippine retail landscape.

Aside from construction of new shopping centers, SM Supermalls is also undertaking a redevelopment with the aim of transforming its malls into sustainable, innovative and community-centric spaces.

Under its reinvention plan, SM Supermalls intends to create more spaces for leisure and interaction in its malls, while celebrating local communities at the same time.

A key feature of the redevelopment of SM Megamall, SM Mall of Asia, SM City Bacolod, SM City Cebu and SM City Iloilo is the integration of indoor gardens as well as the development of more outdoor greeneries.

Depending on the size of the mall, Lim said that the investment for the redevelopment typically ranges from P800 million to P1.5 billion per location.

“You have to continuously evolve because consumers now are very demanding. It’s not just about shopping and eating anymore. It’s the experience when they go inside the mall. That’s why we have to add a lot of amenities and then we also have to bring in new concepts,” Lim said.