SM Prime defers $1 billion IPO of REIT unit

MANILA, Philippines — There will be no initial public offering (IPO) happening this year for the real estate investment trust (REIT) of Sy-led integrated property developer SM Prime Holdings Inc.

SM Prime president Jeffrey Lim said the company is keeping a “wait and see” stance for now for its earlier planned $1 billion REIT listing.

With the current market, Lim said it is better for the company to postpone the planned listing.

“Given the interest rate environment and the market volatility, I don’t think we can do it this year,” Lim said adding that they “will continue to assess as we move forward. So far we are able to fund our requirements through borrowings,” he said.

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

Lim said funding for the project would be through borrowings.

“Because it will take couple of years before we complete the project. So in terms of timeline, we don’t need to borrow the entire cost in one go,” he said.

Lim said  the total cost of the project, including horizontal development, will be about $2.5 billion to $3 billion.

SM Prime officially received from the city of Pasay the notice to proceed for the reclamation project in 2019.

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

“The project right now is on track. We are following our timeline. We have worked out a catch up program in order to speed up, to catch up on our timeline. As we committed, this will be handed over in 2028,” Smart City president Glenn Ang said.

SM Prime said it would continue its expansion program in its key business units and provide the company a stronger presence in major areas across the country.

The company is looking at P100 billion capital expenditure this year to support various programs.

SM Prime is scheduled to open four new malls in the country this year, which will provide more than 400,000 square meters of gross floor area.

It also aims to launch 8,000 to 10,000 residential units for the group’s residential business.

“SM Prime remains committed to its role as a catalyst for economic growth, delivering innovative and sustainable lifestyle cities, thereby enriching the quality of life of millions of people,” the company said.

SM Prime’s board of directors yesterday approved the declaration of cash dividends of P0.346 per share, amounting to P10 billion, to all stockholders of record as of May 8, 2024, payable on or before May 22, 2024.  The declared total amount is higher than the P6.8 billion the company declared in 2023.