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SM Prime sets P80-billion 2018 capital expenditure for provincial businesses

SM Prime

MANILA – SM Prime Holdings Inc on Tuesday said it has set an P80-billion capital expenditure for 2018 to support the growth and expansion of its businesses in the provinces.

The capex will be allocated to key provincial cities, SM Prime, integrated property and SM malls operator, told the stock exchange.

“We want to take advantage of the fast growing provincial areas in the Philippines with increasing urbanization and commercialization stemming not only from robust domestic demand but also from increasing investments in the country,” SM Prime president Jeffrey Lim said.

SM Prime recently opened SM Center Imus and is set to open SM City Urdaneta Central in Pangasinan and SM City Telabastagan in Pampanga this year.

SM Prime also said it is targeting to launch at least 15,000 residential units this year through SM Development Corp (SMDC) and open its third office building at the Mall of Asia Complex as well as the expansion of Park Inn Hotel in Clark, Pampanga.

Bloomberg earlier quoted SM Prime’s vice president Alex Pomento as saying that the company would also build the first Philippine outlet of Swedish furniture brand Ikea within the Mall of Asia complex.

Source: http://news.abs-cbn.com/business/04/24/18/sm-prime-sets-p80-billion-2018-capital-expenditure-for-provincial-businesses

SM Prime mulls REIT listing

SM Prime

SM PRIME Holdings, Inc. can raise between $500 million and $1 billion should it launch a real estate investment trust (REIT) on the stock exchange, an option the company continues to explore amid plans to undertake more reclamation and other projects.

 

Listing a REIT on the Philippine Stock Exchange (PSE) remains an option for the property arm of SM Investments Corp. to finance future projects, its Executive Vice-President and Corporate Information Officer Jeffrey C. Lim told reporters and analysts in an Aug. 4 briefing in Pasay City.

Asked on the sidelines how much SM Prime expects to raise from listing such a trust, Mr. Lim said: “[It’s] dependent on the market but given the size of SM Prime now and the number of malls, I think it can easily be $500 million to $1 billion.”

Mr. Lim cited the potential of launching a REIT in raising capital particularly for the reclamation of 1,500 hectares in Cordova, Cebu. The local government awarded the P138-billion contract to SM Prime last year.

Venturing into the REIT market may allow SM Prime to undertake the Cebu project simultaneously with the reclamation of another 660 hectares of the Manila Bay under a plan awaiting approval from the Office of the President.

SM Prime won separate contracts worth P54.5 billion and P50.19 billion to reclaim and develop around 300 hectares within the jurisdiction of Pasay City and Parañaque City in 2013 and 2014, respectively.

“As you may have known, we have a P60 billion actually in shelf registration for a retail bond and I think the liquidity also in the local market is there that if we are given the go signal, we can immediately start,” Mr. Lim said.

“I think pronouncements from the government seem to indicate that they’re willing to review the REIT implementing rules and regulation so that’s another avenue for us to actually raise the funds for these reclamations,” he added.

Republic Act. No. 9856, which lapsed into law in December 2009, allows for the establishment of REITs or stock corporations using a pool of investor fund to purchase and manage income-generating real estate assets.

SM Prime had intended to launch a REIT sometime in the second half of 2010 to raise $500 million. It would later shelve the plan because of stringent rules on the public float requirement and tax structure.

The Aquino government had applied a 12% value-added tax on initial transfers of assets to a REIT and required 67% of outstanding shares in the trust be passed onto public investors in three years.

“REIT will be good for the Philippine economy as a whole because there will be more investors coming in, there will be more foreign investors also investing in REIT,” SM Executive Vice-President, Chief Financial Officer and Corporate Information Officer Jose T. Sio noted.

“In the case of SMIC, I think the property group, being one of the largest, if not the largest in Southeast Asia, it’s very advantageous for SM Prime, especially the mall and commercial business and the hotel business to be implemented under the REIT listing,” he added.

Aside from expanding its mall and other operations generating recurring revenues, SM Prime is diversifying its residential business with a foray into affordable housing development.

SM Prime intends to build 2,000 to 5,000 affordable housing units within properties spanning at least 20 hectares. The company is investing P1 billion to launch such a development initially in Cabanatuan within the year, Mr. Lim said.

“It’s more of testing the market. Depending on the take up and reception, we’re buying more properties for economic housing — we call it affordable — mostly [in] North Luzon and South Luzon,” added Mr. Lim, who will assume SM Prime’s presidency starting Oct. 1.

Shares in SM Prime closed 65 centavos or 2.22% higher at P29.9 apiece on Friday.

Source: http://www.bworldonline.com/content.php?section=Corporate&title=sm-prime-mulls-reit-listing&id=131568

SM, Robinsons, Megaworld take top awards for retailing

SM City North Edsa

MANILA, Philippines – Three of the biggest family conglomerates that owned shopping centers were hailed as among the best local retailers and owners last Thursday.

The SM Group, Robinsons Retail Holdings and Megaworld had been awarded by the Philippine Retailers Association (PRA). The companies are owned by the Sy, Gokongwei and Tan families.

Specifically, SM Group’s SM Megamall was named the shopping center of the year for the large category. Its grocery counterparts, Savemore and SM Hypermarket, were awarded as supermarket and hypermart of the year, respectively.

Megaworld’s Newport Manila, meanwhile, bagged the shopping center of the year award for the mixed-use township category, while its Lucky Chinatown Mall won under the medium category.

Robinsons Place Malolos in Bulacan was hailed shopping center of the year under the small category, and Robinsons Department Store was named full line department store of the year.

The annual PRA awards, now on its 19th year, seeks to encourage Filipino retailers to adopt world-class standards and practices by recognizing Filipino retailers who have epitomized the model of growth and good ethical practices.

Apart from the usual categories handed out annually, this year’s edition recognized tycoon Lucio Co of Puregold with the President’s Award for his contributions in the local retail industry.

“(This is) in recognition of his success and influential contribution to the growth of micro-retail entrepreneurs, particularly through the Tindahan ni Aling Puring program that promoted the enhancement and development of micro-retail entrepreneurship in the Philippines,” PRA said.

“The program manifested Puregold’s mission to serve and uplift the livelihood of every Filipino family, while at the same time contributing to the country’s aspiration for inclusive growth,” it added.

Trade Secretary Adrian Cristobal Jr. said the retail industry has been a strong pillar of economic growth over the past five years, contributing an average of 13 percent to the country’s gross domestic product (GDP).

He said both retail and trade are bound to benefit from the expected continued strong economic growth, which hit a three-year high of 6.9 percent in the first quarter.

“We hope major players in the retail industry will continue to provide market opportunities for small entrepreneurs, especially those in the food processing and agriculture sectors,” he said.

Source: http://www.philstar.com/business/2016/06/20/1594524/sm-robinsons-megaworld-take-top-awards-retailing

SM Prime betting big on low-cost housing

SM Prime

SM PRIME Holdings, Inc. expects its low-cost housing business to eventually account for half of the residential business, as the property conglomerate of tycoon Henry Sy, Sr. plans to start selling units at its maiden real estate venture in China next year.

Jose Mari H. Banzon, SM Prime business unit head for primary residential, told reporters last week the integrated property developer plans to start offering this year medium-rise buildings (MRB) and house-and-lot packages with prices ranging from P800,000 to as much as P2.5 million.

“Ultimately, the target is to be half-half: half from high rise [projects] and half from MRBs and house-and-lots, in terms of launches and contribution to revenue,” Mr. Banzon said.

These projects will be gradually launched in phases, he said. The foray into economic housing will account for a tenth of the 12,000 to 15,000 units the real estate firm intends to launch this year with an estimated sales value of P36 billion to P40 billion.

“If you look at demand, [the] affordable [segment] is good. Shortage in housing is big and the biggest backlog is in the lower level,” Mr. Banzon said.

So far, SM Prime has launched two residential projects in Pasay and Tagaytay this year, with 13 to 15 more slated for roll out in new locations for the rest of the year, depending on market conditions.

“Our sales in the first quarter is significantly higher than in the same period last year. It’s still [because of] the backlog. We haven’t really come close to serving it,” Mr. Banzon said.

CHINA PROJECT
In China, SM Prime has started excavation work on its first residential project in Chengdu — a seven-storey development situated beside its shopping mall.

“You cannot start selling until you have reached the ground [level]. We will start selling in the first quarter of next year,” Mr. Banzon said.

The real estate developer is scouting for properties for possible residential projects in first- and second-tier cities in China where demand continues to be strong.

“SMDC (SM Development Corp.) is aggressively looking for land in China,” Mr. Banzon said.

SM Prime is on the third year of a five-year program that entails a capital spending budget of P400 billion to beef up its businesses that will double earnings by 2018.

Without a P7.4-billion trading gain on marketable securities, net income climbed 14% year-on-year to P20.9 billion last year, slightly faster than the 13% jump to P18.39 billion in 2014.

SM Prime is part of SM Investments Corp., which has core businesses in retail, banking and real estate. The family also has interests in gaming, geothermal energy and infrastructure.

Shares in SM Prime added 30 centavos or 1.38% to close at P22 each on Friday.

Ayala, SM, Aboitiz, Megaworld likely to pull out of Laguna Lakeshore PPP if…

Ayala SM Aboitiz Megaworld

THE “mega” consortium formed by the country’s  biggest property developers is pulling out of the running for the P123-billion Laguna Lakeshore Expressway Dike deal if the government proceeds with the auction on Monday.

Individuals with direct knowledge of the matter told the Inquirer that the Team Trident consortium, whose members are Ayala Land Inc., SM Prime Holdings Inc., Aboitiz  Equity Ventures Inc. and Megaworld Corp., will not be submitting a bid on March 28, 2016 due to several unresolved issues.

A key deal breaker for Team Trident, the largest of the three pre-qualified groups eyeing the public private partnership (PPP) project, was the lack of a guarantee over the “road connectivity” for the expressway dike deal, one of the individuals said.

These worries cover connections to the C5 and C6 projects, the person said. A Team Trident spokesman did not respond to requests from the Inquirer to comment.

Bidders have continuously maintained that the Laguna Lakeshore Expressway dike was among the more attractive deals in the PPP pipeline. But it is almost one of the most complex.

The project combines a 47-kilometer tollroad from Taguig in Metro Manila to Los Baños, Laguna running on top of a massive flood control dike under a 37-year concession period.

The project’s main business opportunity is a 700-hectare land reclamation project on Laguna Lake. The winning bidder can develop the reclaimed land into mixed-use projects. This would be the largest property project of its kind so close to Metro Manila.

The Department of Public Works and Highways earlier this month moved the bid submission deadline to March 28 from March 14, 2016 “to make the necessary modifications to the contract to address certain foreseen risks”. The bid submission has been delayed several times since July last year.

Public Works and Highways secretary Rogelio Singson said last week there would be no further delays to the March 28, 2016 deadline.

Team Trident has been the most vocal in airing its concerns over the Laguna Lakeshore Expressway dike project, although other groups have been flagging risks.

These include political uncertainties given that the project, which is expected to be built from 2017 through 2024, would be awarded months or even weeks before President Aquino steps down in the middle of this year.

The two other pre-qualified groups are a unit of conglomerate San Miguel Corp. and Alloy Pavi Hanshin LLEDP Consortium, comprised of Malaysia’s MTD Group, South Korea’s Hanshin and the family of former Senator Manuel Villar Jr.

Neither group has categorically signaled that they would pull out of the project. San Miguel president Ramon S. Ang said last week that they were still keen on bidding.

The  Laguna Lakeshore Expressway dike deal, like other PPP projects under procurement, is not covered by the election ban.

Data from the PPP Center showed 14 projects now under procurement with a combined value of P556.6 billion. So far, 12 deals valued at over P200 billion have been awarded and four are set to be finished before President Aquino steps down in the middle of 2016.

Source: http://business.inquirer.net/208956/ayala-sm-aboitiz-megaworld-likely-to-pull-out-of-laguna-lakeshore-ppp-if

SM Prime to build P5-b Ortigas towers

SM Prime

SM Prime Holdings Inc., the country’s largest real estate developer, said it will spend between P4 billion and P5 billion to develop high-end office towers near SM Megamall in the Ortigas central business district.

SM Prime vice president for finance Ma. Teresa Cecilia Reyes said the planned S-shaped office towers would rise between SM Megamall fashion hall and Edsa Shangri La Hotel. The area is currently an open parking space.

Global engineering consultant Aurecon said earlier the 50-story office development, called SM Megamall Towers, would have 124,200 square meters of floor area, including three levels of underground parking and above-ground parking.

The SM Megamall Towers will have first-class amenities and will have a direct link to SM Megamall.

Aurecon was appointed by SM Prime to provide structural engineering design services for the SM Megamall Towers.

Aurecon will work closely with Arquitectonica, the architect of the high-rise office building, from the concept engineering phase to the design development.

Aurecon said the SM Megamall Towers would add to its growing portfolio of landmark projects including the Shanghai Tower, the Mapletree Business City and VivoCity in Shanghai, China; Wembley National Stadium in London; Motion Gate in Dubai; and the World Tower Melbourne in Australia.

SM Prime has been building its office portfolio over the past few years in a bid to become one of the leading office developers in the country.

SM Prime under its commercial properties group currently has 318,000 square meters of office space within the Mall of Asia complex in Pasay City.

It recently launched the 16-story FourE-ComCenter with gross floor area of 123,000 square meters while another BPO building is expected to be launched before the end of 2016.

It is also developing similar office buildings catering to the business process outsourcing industry such as the SM Cyber Buildings—a mix of build-to-suit and ready-to-use office spaces in Makati City.

SM Prime has 529,000 square meters of land bank for future office projects.  The company said by 2018, it aimed to have seven BPO buildiongs with 460,000 square meters of gross floor area.

Source: http://thestandard.com.ph/business/198824/sm-prime-to-build-p5-b-ortigas-towers.html