SM Prime Holdings Inc., the country’s largest real estate company, said Wednesday it will spend P220 billion over the next three years in line with the target to double net income by 2018.
SM Prime said in a presentation during a recent non-deal roadshow the bulk of the three-year spending program would go to shopping mall, residential and commercial developments.
SM Prime earlier set a target to double net income to P32 billion by 2018.
The company said to achieve the net income target, it planned to have 10.96 million square meters of shopping malls in the Philippines and China; over 139,000 residential units across 41 projects; 2,500 units of leisure homes across 16 developments; 460,000 square meters of commercial space from seven office buildings; and 2,187 hotel rooms from 10 hotel developments by 2018.
SM Prime said in 2016 alone, it would open five new malls and expand two existing malls to end the year with a total of 61 shopping malls with 7.6 million square meters of floor area.
It will also open one mall in China—SM Tianjin with gross floor area of 540,000 square meters. This will be SM Prime’s seventh mall in China.
The company said for its residential business, it would spend P22.8 billion in capital expenditures this year, including P15.9 billon for project development and P6.9 billion for land banking.
SM Prime’s residential group currently has 348.9 hectares in its land bank which could be developed into mixed-use township projects.
SM Prime said its commercial business unit, which caters primarily to the fast growing business process outsourcing industry, was poised to accelerate growth on strong demand for office space.
The company has an available land bank of 529,000 square meters of land bank for future office development.
Meanwhile the group’s hotel and convention centers currently operates five hotels with over 1,150 rooms; four convention centers; and two Megatrade halls with over 36,000 square meters of leasable space.
It is also set to open the 347-room Conrad Hotel within the Mall of Asia complex in Pasay City in the first half of 2016.
SM Prime said despite the massive capital expenditure requirements it would still maintain a very conservative gearing ratio.