SM Prime Holdings Inc., the country’s leading real estate developer, plans to spend P120 billion over the next two years to fund expansion until 2020.
SM Prime vice president and investor relations head Alex Pomento said in an interview at the sidelines of an economic summit sponsored by the SM Group, said the property firm would keep its P60-billion annual spending program to fund the expansion of core businesses, including malls, residential, office towers, and hotels.
The annual spending does not include potential acquisitions.
SM Prime earlier disclosed a 2020 roadmap detailing the expansion of a number of shopping malls, hotels, residential and office buildings to sustain the company’s growth.
Meanwhile, SM Prime president Jeffrey Lim said in a separate interview during the same event the company had not yet felt the impact of the rising inflation and interest rate as well as the depreciation of the peso against the dollar.
Lim said the company’s third-quarter performance was “okay” and that growth was still “in line” with the overall target.
“So far we have not seen the impact of inflation rate. I think consumption will continue given that we are going to the holiday season. I think the full effect of inflation rate numbers will probably be seen after the holiday season,” he said.
The rate of inflation jumped to a nine-year high in September to 6.7 percent on rising cost of food and fuel.
The inflation rate year to date reached 5 percent, or over the target range of 2 percent to 4 percent set by the government, which could lead to weakening of domestic consumption.
Lim said the company’s residential business had not been affected also by rising interest rates.
“So far we have not seen it and we continue to do the development. So I guess it is still too early to say and I guess the Chinese market is also increasing the demand for residential projects,” Lim said.
The Bangko Sentral ng Pilipinas last month raised interest rates by 50 basis points to 4.5 percent amid the persistent threat of rising inflation.
The 50-basis-point increase last month was the fourth upward adjustment this year, bringing the total rate hikes to 150 bps since May 2018.
SM Prime posted a 16-percent increase in net income in the first half of the year to P16.6 billion from P14.39 billion year-on-year on double-digit growth in mall revenues and residential sales.
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