Shopping mall operator SM Prime Holdings Inc. ruled out the establishment of its own real estate investment trust (REIT) this year citing unfavorable market conditions.
Jeffrey C. Lim, company president, has opted to defer the proposed exercise for when the interest environment and the market volatility prove in alignment with its business plans,
“I don’t think we can do it this year. We will continue to assess as we move forward because so far we’re able to find our requirements to borrow… it’s better for us to postpone it,” Lim said
“So as a matter of timing, we continue to look at retail as an option. But other than the borrowings but it’s a timing matter (on REIT float), considering the market conditions at this point in time,” John Nai Peng C. Ong, the company’s CFO, said.
Proceeds from the REIT exercise will help fund SM’s 600-hectare Manila Bay reclamation project costing aroundt $3 billion.
“The (reclamation) project is on track. We are following our timeline, it has not moved,” Lim said.
SM Prime said it will continue expanding its key business units and stronger presence in major areas across the country.
The company said it is looking at P100 billion as capital expenditure this year supporting various programs using a mix of internally-generated funds and loans from banks.
SM Prime is scheduled to open four new malls this year that adds 400,000 square meters of leasable gross floor area.
