SM Prime to raise $1 billion from REIT

MANILA, Philippines — SM Prime Holdings Inc. plans to raise as much as $1 billion from a planned real estate investment trust (REIT) listing within the year.

SM Prime president Jeffrey Lim said the company is targeting   to launch its REIT by the second half of the year.

“We intend to raise $1 billion from the REIT,” Lim said in a press conference following the company’s annual stockholders meeting yesterday.

Proceeds will be used to fund the reclamation cost and initial development of SM Smart City, which will rise in the Bay Area in Pasay.

“We have started the process of incorporating the REIT company and we are now in discussions with advisors. Hopefully we can launch the REIT by the second half of the year. If there is an opportunity for us to make the listing in the second half, we will make the proper announcement,” Lim said.

The initial plan is for the REIT to comprise purely shopping centers or between 12 and 15 Philippine malls owned by SM Prime. Other asset classes may be infused into the REIT later on, officials said.

At present, SM Prime has 82 shopping malls, of which 39 to 35 are fully mature.

This developed as SM Prime said the company is scheduled to open three new malls this year, which will provide an additional 200,000 square meters of gross floor area.

For its residential business, SM Prime aims to launch 15,000 to 20,000 residential units.

In 2019, SM Prime officially received from the city of Pasay the Notice to Proceed (NTP) for the reclamation project.

This new project will be connected to the SM Group’s Mall of Asia (MOA) Complex, which is also a reclaimed land project of both parties, and turned into a business district featuring a mall, offices, residences, entertainment arena, five- star hotel, and convention center.

As the city’s joint venture partner, SM Prime will undertake to develop the actual raw land reclamation and horizontal development works.

Glenn Ang, president of Smart City said  60 hectares  (comprising  island A) have already been reclaimed with the next two islands completing the remaining 300 hectares.

SM Smart City is envisioned to be a mixed use development similar to the success of the Mall of Asia reclamation project.