THE BIGGEST BUILDER
AMONG the three core businesses of SM Investments Corp. (SMIC), the property segment, which is managed by SM Prime Holdings, Inc., shares the biggest slice of the group’s consolidated net income of P31.2 billion last year, contributing 39% or P23.8 billion.
SM Prime is one of the largest publicly- listed companies in the Philippines in terms of market capitalization with P947 billion as of May 17, 2017. SM Prime is one of the biggest real estate conglomerates in the country and in Southeast Asia with interests in malls, residences, office buildings, resorts, hotels and convention centers. With this stature, SM Prime is set on building integrated lifestyle city properties across the nation to capitalize on the group’s synergies and provide better convenience to communities.
SM Prime’s consolidated revenues last year grew by 11.6% to P79.8 billion from P71.5 billion in 2015. Its revenues were boosted by the strong sales take- up of housing units and steady growth income from malls and office buildings rentals. The company had a fruitful year as its recurring net income also increased by 13.9% to P23.8 billion.
SM Prime is also the country’s largest mall developer in terms of gross floor area ( GFA) and geographical reach. In 2016, SM Prime closed the year with a total of 67 malls inside and outside the country.
Sixty of these malls are located in the Philippines including the four new malls that opened last year namely SM City San Jose Del Monte, SM City Trece Martires, SM Cherry Congressional and SM City East Ortigas. In addition, expansion in SM City San Pablo in Laguna and SM City Molino in Cavite was also completed last year. With these, SM Prime’s total retail space increased by 4.7% with a combined GFA of 7.7 million square meters (sqm).
The other seven malls, with a combined GFA of 1.3 million sqm, are located in China including SM City Tianjin in Tianjin’s Airport Economic Area which opened last year. Other SM malls in China are SM City Xiamen, SM City Jinjiang, SM City Chengdu, SM City Suzhou, SM City Chongqing and SM City Zibo.
Meanwhile, SM Prime’s residential group, SM Development Corp. ( SMDC), also posted a 12.6% total revenue growth to P25.4 billion last year. Major contributor for this was the stronger sales takeup in ready for occupancy units from projects including Princeton Residences, M Place Residences, Mezza II Residences in Quezon City, S Residences, Shore 2 Residences and Coast Residences in Pasay City and Jazz Residences in Makati City. A total of 10,783 residential units were launched in 2016 to serve more start-up families and young professionals.
Aside from malls and residential properties, which are major revenue drivers for SM Prime, it also has six office buildings under the Commercial Properties Group that primarily cater to the growing Business Process Outsourcing industry, the largest of which are located in the Mall of Asia Complex with an estimated GFA of 383,000 sqm. The group posted a growth of 32.4% in revenues to P2.7 billion which are credited to the rental revenues of FiveE- com Center at the Mall of Asia Complex in Pasay City.
For SM Hotels and Convention Centers, SM Prime’s hotel group, revenues surged by 31.5% to P3.2 billion driven by a mix of developed occupancy in its existing hotels and with the opening of Park Inn Clark in Pampanga in December 2015 and Conrad Manila in Pasay City in June 2016.
SM Prime now has a total of 1,510 hotel rooms from its six hotels namely Taal Vista in Tagaytay, Radisson Blu Cebu, Pico Sands Hotel in Hamilo Coast, Park Inn Davao, Park Inn Clark and Conrad Manila. It also has four convention centers and three trade halls in its portfolio.
This year, SMIC plans to spend at least P50 billion per annum over the next two years to support its developmental goals. It is set to open five new malls in the Philippines located outside Metro Manila and is scheduled to launch 15,000 to 18,000 residential units in high-rise and mid-rise buildings as well as house and lot developments. —