SM Prime sets aside P35 B to continue expansion binge

 

 

By JAMES A. LOYOLA Top mall developer SM Prime Holdings Inc. is spending P35 billion over the next five years for the construction of new malls as well as the expansion or renovation of existing malls nationwide. SM Prime president Hans Sy said in a briefing after the firm’s stockholders’ meeting yesterday that the capex is consistent with the programmed capex of about P7 billion a year. Jeffrey Lim, SM Prime executive vice president added that the firm plans to build or expand 35 to 40 new and existing malls over the next five years and will be financing this huge capex with both internally generated funds as well as with some borrowings. Sy said the capex includes the P7 billion the firm intends to spend for this year for the construction of malls in Taytay, Rizal and Muntinlupa as well as the recently opened SM Bacolod. He added that SM Prime is also allotting P1.8 billion for the expansion of the newly completed Mall of Asia since it is already a huge success. Sy said they will be adding leasable areas as well as a planetarium since they have just acquired new property adjacent to the mall. In 2008, Sy said the firm will build new malls in Tarlac, Naga, Calamba, Baliuag, and Marikina in addition to the expansion of existing malls including the redevelopment of SM City North EDSA. Lim said the firm intends to add 387,000 square meters in new gross leasable space with the expansion projects they have slated for 2008. Sy said the P35 billion capex does not include the planned acquisition of more land for their expansion in both Metro Manila and the provinces. "We are even open to the acquisition of existing malls," he said noting that there is a huge demand for mall space in the provinces due to the presence of families of overseas Filipino workers as well as the expansion of business process outsourcing firms which always prefer to have offices beside malls. Lim said they will seriously look at existing malls for possible acquisition "when the opportunity presents itself." He added that several malls in both Metro Manila and the provinces have already been offered to them and they are currently evaluating them. Meanwhile, Sy said SM Prime is doubling its authorized capital stock to P20 billion from the existing P10 billion so the firm will have enough unissued shares ready when there are investment or capital raising opportunities. Lim explained that the firm’s P10 billion capital has already been fully issued and they need more capital to have the leeway to explore fund raising and investment opportunities. Sy said the firm will also make an announcement in the second half on whether or not SM Prime will acquire the Sy family’s investments in China and, they are, how this will be done noting that it could involve the issuance of new stocks. He said SM Prime currently has three malls in China with two in Fujian province in the cities of Xiamen and Jin Jiang and another mall in Xeng Du.

 

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