The property business of the country’s richest man Henry Sy, Sr. will open certain sections of SM Tianjin, including the cinema and supermarket, in the middle of December, SM Prime President Jeffrey C. Lim said.
“We’re going to soft-open on Dec. 17,” Mr. Lim told reporters told reporters on the sidelines of the 3rd Annual Securities and Exchange Commission — Philippine Stock Exchange Corporate Governance Forum in Pasay City on Tuesday.
By that time, about 60% of the development will open to the public. This translates to around 150,000 square meters of gross floor area within two buildings, Mr. Lim noted.
SM Prime is pursuing expansion plans in China despite the slowing economic growth there in recent years. But for now, the property developer will focus on the Fujian province.
“We’re going to look at properties, as announced before, in the Fujian area. So, we will focus on the Fujian province,” Mr. Lim said. SM Tianjin represents the seventh mall development of SM Prime in China. The company’s other malls are located in Xiamen, Jinjiang, Chengdu, Suzhou City, Chongqing and Shandong.
Aside from malls, SM Prime is embarking on residential development in China. It broke ground for seven condominium towers in Chengdu — the company’s first residential project in the country — earlier this year.
“We’re just starting, so selling will probably begin in the middle of next year because we are not allowed to pre-sell in China,” Mr. Lim noted.
Asked whether the peso’s weakness against the dollar may impact its expansion thrust overseas, Mr. Lim replied: “I don’t think so. I think it depends on the market, the location and on the prospects.”
“For example, if we invest in China, we use renminbi and we don’t borrow dollars to be used here in the Philippines,” Mr. Lim added.
The peso’s depreciation may rather benefit the company’s business in the Philippines, where remittances from overseas Filipino workers have boosted household consumption and kept the economy afloat.
“We hope that it will stimulate spending in terms of consumer spending in the malls given [the families of overseas Filipinos] will have more pesos,” Mr. Lim said.
Also, SM Prime intends to pursue fund-raising activities as planned despite the anticipated rate hike in the United States, a development expected to induce capital outflows and inflate borrowing costs in emerging markets.
“We will move as we have planned given the increase, I think, will not be substantial — I think even if they increase by 25 basis points,” Mr. Lim said.
In this light, SM Prime looks to launch “between first and second quarter of next year” the second tranche of a P60-billion shelf offering. The company issued the first P10 billion in fixed-rate retail bonds last July.
In the first nine months, a sustained growth in rental operations and real estate sales allowed SM Prime to generate revenues amounting to P57.8 billion or 11% over last year’s P52.2 billion. Its net income accordingly rose 13% to P17.5 billion from P15.5 billion.
Shares in SM Prime closed 20 centavos or 0.76% higher at P26.50 apiece on the Philippine Stock Exchange on Wednesday.
