MANILA, Philippines - SM Prime
Holdings Inc., the country’s largest retail landlord, has set a P63-billion
three-year capital spending plan to rapidly expand its presence here and in
China in its bid to become a regional player.
SM Prime chief financial officer
Jeffrey C. Lim said the company is spending P21 billion each year to build four
to five new malls at home and one mall annually in China to take advantage of
rising consumer spending.
He said the company plans to open up
to 18 malls in the next three years.
He said funding for the massive
expansion will come from a combination of internally-generated cash and
borrowings.
SM Prime expects to end the year with
a total of 46 malls across the country and five in China, with an estimated
combined gross floor area of 6.3 million square meters.
Earlier this year, it opened SM City
Olongapo in Zambales, SM City Consolacion in Cebu and SM City San Fernando in
Pampanga. Three more malls are expected to open in the second half - SM City
Gen. Santos in South Cotabato, SM City Lanang in Davao City and SM Chongqing in
China.
SM Prime’s four malls in China,
located in the cities of Xiamen, Jinjiang, Chengdu and Suzhou, contributed P320
million or seven percent to the company’s aggregate earnings. Combined revenues
amounted to P1.27 billion or nine percent of total.
The SM China malls are enjoying
healthy increases in rental rates, with average occupancy level now at 95
percent.
SM Prime said it continues to see vast
opportunities in China given the world’s second largest economy’s growing
population and emerging middle class.
The group is currently looking to
acquire five properties in its second biggest market. It wants to reach new
markets to further widen its geographical footprint.
The expansion is also in line with the
SM Group’s strategy to list its China assets either in Hong Kong or Singapore
by 2015 in a public offering that could fetch proceeds worth up to $500
million.
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