No SM Prime REIT IPO listed this year

No SM Prime REIT IPO listed this year

Jeffrey Lin—MEG J. ADONIS

MANILA, Philippines — High interest rates and market volatility have delayed Sy-led real estate giant SM Prime Holdings Inc.’s plan to launch a real estate investment trust (REIT) this year, delaying the country’s largest initial public offering (IPO). .

SM Prime president Jeffrey Lim said on Tuesday that 2024 is not the “right time” to launch a US$1 billion real estate investment trust initial public offering (IPO).

“For this year, I think we may not be able to do it because of the interest rate environment, and the market at this time is not suitable for REITs. [listing],” he told reporters at the company's annual shareholder meeting.

Lim is also counting on the company's “strong” cash flow to continue growing without a REIT IPO, which will allow the company to recycle capital from existing assets that generate recurring income.

Read: SM Prime ‘in no rush’ to launch US$100 million IPO

The real estate giant's net profit surged 33% to 40 billion pesos last year as its mall business rebounded after the epidemic. Meanwhile, consolidated revenue reached 128.1 billion pesos, an increase of 21%.

Reclamation project on track

The REIT's listing proceeds are intended to fund several of SM Prime's expansion plans, including a $3 billion reclamation project in Manila Bay that is expected to be completed in 2028.

read: SM Prime focuses on P100-B bond plan

The expensive project will cover 360 hectares, roughly the size of five Asian shopping mall complexes. SM Prime plans to develop the project as a mixed-use township development.

According to Lam, they will finance the project mainly through loans.

Chief Financial Officer John Nai Peng Ong clarified that the delay in the REIT launch will not affect the progress of the reclamation project.

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“The project is on track and we are following our timeline… We have developed a concept plan to expedite and meet our timeline,” he said. [the project] It will be handed over in 2028,” Ong added. Inquire

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