SM Prime completes 2012 fund-raising

MALL OPERATOR SM Prime Holdings, Inc. has completed its financing requirements for the year amounting to P21 billion, signaling its preparation to spend a further P63 billion in the next three years for expansion here and overseas.

“2012 [fund-raising is] done already. For next year, we will know by [the first quarter] how much we need to raise,” Jeffrey C. Lim, SM Prime executive vice-president and chief financial officer, told BusinessWorld in a text message.

Previously, SM Prime said it was allocating P21 billion for capital expenditure this year, of which P14 billion is intended to fund projects in the Philippines while P7 billion will be funneled for those in China.

The capex was supposed to be sourced from a mix of debt and internally-generated funds.

Last May, the firm announced that it had raised P7.5 billion in fresh funds from the issuance of fixed-rate and floating-rate notes, which were reportedly snapped up by institutional investors.

SM Prime told the stock exchange last week that moving forward, it was earmarking an estimated P63 billion to bankroll the construction of four to five malls in the Philippines, and one mall in China.

“We will raise funding yearly for this,” Mr. Lim said.

SM Prime, however, has yet to determine whether it will tap the equities or bond market for future capex requirements.

“We will have to wait until next year,” Mr. Lim said.

SM Prime was incorporated in 1994 to take charge of the SM group’s commercial shopping centers and related businesses. This year, SM Prime aims to have a mall portfolio of 46 Philippine malls and five China malls, with an estimated combined gross floor area of 6.3 million square meters.

The Sy-led company is eyeing as much as seven new properties in China for mall expansions as the firm exploits higher consumer spending there.

SM Prime hiked its January-to-June net income by 15.22% to P4.92 billion due to its new malls and robust sales, earlier reports show.

Shares of SM Prime dropped by 1.85% to P13.80 last Friday from P14.06 at its previous close.

For latest update on real estate development and its RA 9646, the Real Estate Service Act of 2009, visit www.ra9646.com.