SM Prime Holdings Inc., the country’s largest integrated real estate developer, said it is earmarking P60 billion to P70 billion in capital expenditures for 2017 as it plans to build more shopping malls.
SM Prime executive vice president Jeffrey Lim said in an interview at the sidelines of the Philippine Investment Forum hosted by CFA Institute the company also planned to issue P10 billion to P15 billion worth of retail bonds by the first quarter of 2017 to finance the expansion plan.
SM Prime, which has shelf-registration for P60 billion worth of fixed-retail bonds, already issued P10 billion worth of 10-year bonds.
Lim, who will assume the post of SM Prime president starting Oct. 1, said the company was now focused on expanding its malls outside Metro Manila as land prices in the metropolis increased significantly over the past few years.
“We are more focused more on provincial areas because land prices in Metro Manila have been prohibitive to develop commercial centers,” Lim said.
He said land price in Bonifacio Global City was now at P500,000 per square meter while prices along C-5 area was at P100,000 per sqm. Land prices in the provinces were also starting to go up, with prices in Zamboanga now ranging from P25,000 to P35,000 per sqm.
“These have never been heard of before. If we continue to see this, it may be difficult to expand. In our case, we go to areas outside Metro Manila to have the first mover advantage,” Lim said.
He said aside from rising land prices, he was concerned about the delay in the conversion of certain areas into commercial sites.
Lim said in China, the company was negotiating for the acquisition of two new sites, with an average size of 4 hectares to 5 hectares each, located on third-tier cities.
SM Prime opened SM Zibo early this year and will have soft opening of SM Tianjin before the end of the year.