SM Prime Holdings Inc. will keep its 2027 capital spending at P60 billion to P100 billion but hold off on new office developments and be more selective with residential launches as it sees no quick recovery in the property market.
SM Prime President Jeffrey Lim said the company would prioritize ongoing developments, mall expansions, and hospitality projects, with spending decisions guided by market conditions and the prospects for individual projects.
“We expect capital spending in 2027 to be in line with this year,” Lim said, adding that project timelines could be adjusted depending on market conditions.
“Our hotel and convention center projects will proceed as planned,” he said.
Lim said premium residential developments offer better opportunities, while new launches in the core segment would depend on a meaningful improvement in buyer demand and market sentiment.
“Looking ahead to 2027, we do not expect a quick or sharp recovery in the property market,” he said.
The cautious outlook reflects persistent weakness in residential demand, prompting SM Prime to rely more heavily on recurring income from its leasing business.
The company expects rental income to outpace Philippine economic growth next year and drive revenues, helping offset softness in residential sales.
Meanwhile, SM Prime expects holiday spending to support mall revenues in the final months of 2026, following stronger sales in October.
SM Supermalls president Steven Tan said food and beverage sales grew by double digits, while mall foot traffic remained stable.
“Sales, especially on the side of F&B, have grown double digit,” Tan said.
He noted that shoppers were spending longer periods inside malls, potentially consolidating their trips as higher fuel costs make frequent travel more expensive.
Tan said third-quarter revenues were the strongest recorded this year, with the momentum extending into October and expected to support holiday spending.
The outlook highlights the divergence in SM Prime’s businesses, with residential development facing a prolonged recovery while malls and hospitality projects provide opportunities for continued expansion and recurring income.
