SM Group sets 85-B 2015 capex

SM Investments Holdings, Inc. (SM), the holding firm for tycoon Henry Sy’s businesses, may allot a higher annual capital spending this year as the group ramps up investments in the light of positive economic outlook for the Philippines.

SMIC investor relations chief Cora Guidote said the capital expenditure (capex) of the entire SM Group is “anywhere at 75 billion to 85 billion.” SM group’s investment portfolio cuts across a wide range of industries from malls to residential developments to retail, hotels, energy and banks.

“There’s more spending because there are many events [that the country is anticipating such as the Asia Pacific Economic Cooperation (APEC) meeting], election is coming soon. So the odds are in our favor,” Guidote said in an interview on the sidelines of Nikkei Asian Review Forum held in Makati.

Guidote said that continued increase in group’s capex may go on until next year given the 2016 Presidential election.

“Barring any climate disturbances, our economy will be very good this year,” she further said.

With larger capital needed for its consolidated property firm, the entire SM Group has allocated 80 billion in its 2014 capex. On the holding company level, the entire capex was about 80 billion, of which 70 billion was for its property arm SM Prime Holdings, Inc., while the rest went to its other retail business and its banking business.

In 2014, the group started allotting the biggest portion of its capex for SM Prime, which was then being prepared to become the parent firm of all of SM Group’s real estate units.

The enlarged SM Prime is now the holding firm for the mall, residential, office and leisure businesses of the Sy family.

The next wave of the SM Prime’s five- year roadmap, which intends to spend 400 billion from 2014 to 2018, has already started with around 60-billion capex allotted for the real estate giant’s 2015 expansion activities, which includes more prospects in China.

In an earlier interview, SM Prime executive vice president Jeffrey Lim said the whole SM Group will embark on around 60-billion capex this year to bankroll its expansion, which includes establishment of additional SM Prime malls, landbanking activities, among others.

Aside from its expansion activities in the domestic side, SM Prime also has prospects in China this year, which involves opening of two malls.