SM Prime Holdings Inc. is moving to a later timeline its planned real estate investment trust (REIT) citing an unfavorable market.
Jeffrey Lim, SM Prime president, said the current interest rate environment and the capital market as a whole do not offer a good time to sell shares from its planned REIT.
“Next year we’ll see, because we don’t know what’s going to happen in the next several months,” he said. “I don’t think it’s the right time for us to do it.”
Lim’s pronouncement delays what was speculated last year to bring to the market $3.5 billion to $4 billion worth of REIT assets out of SM Prime’s portfolio of retail spaces through its various malls. The potential REIT sale was speculated to raise for SM Prime around $1 billion.
Last year, Lim said SM Prime may infuse an initial 12 to 15 malls into the offer. He had said the company has firmed up which assets go into the REIT and is finalizing the timing of the sale that was supposedly eyed last year.
Lim said the mall selection comes from the 30 to 35 “fully mature” malls of the company which also carry some office spaces.
As of last year, SM has 85 malls in the Philippines and eight in China, 91 residential developments, 18 office buildings, 10 SM hotels, six convention centers and two trade halls, which Lim said is a stark contrast to the four malls – SM City North EDSA, SM City Santa Mesa, SM City Megamall and SM City Cebu – that SM Prime had when it listed in 1994.
SM Prime, meanwhile, is keeping a “guarded optimism” despite its plan to spend P100 billion for capital expenditure (capex) this year.
Of the “strategic” capex, Lim said 40 percent will be directed towards acquiring properties and “doing coastal developments that will pave the way for a modern eco friendly urbanization.”
The remaining 60 percent will be dedicated to enhancing SM Prime’s mall development and unveiling new residential properties under SMDC Corp. and construction of new hotels and convention centers.
