Thursday, 29 April 2010

SM Prime hikes Reit offer size to $500m

Jenniffer B. Austria
Manila Standard

SM Prime Holdings Inc., the country’s largest shopping mall operator and developer, is increasing size of its planned real estate investment trust offering to $500 million from an initial $300 million due to strong interests from investors.

SM Prime executive vice president Jeffrey Lim told reporters following an annual stockholders’ meeting that the company planned to put between 15 and 18 shopping malls in the country into a Reit company that will be listed in the Philippine Stock Exchange by the second half of the year.

SM Prime has 36 malls in the Philippines and three in China.

“SM Prime believes we offer compelling story for Reit structure. We have matured assets that we can incorporate into the Reit in order to raise capital. Using the Reit strucuture, SM Prime will be able to expand malls here and also in China,” said Lim.

He said the company would use proceeds from Reit for expansion, debt payment and to “pay back shareholders.”

The Reit law provides a regulatory and tax incentive framework to real estate companies to raise cash by publicly listing their income-generating assets, such as malls or office buildings

SM Prime, meanwhile, said it would open 1 at least one mall each year in China over the next three years, increasing its outlets in the world’s biggest economy to to 10 by 2014.

SM Prime will open four malls in the Philippines this year—Novaliches, Tarlac City and Calamba and San Pablo in Laguna. The four will bring to 40 the company’s shopping malls in the country with total gross leasable area of 4.8 million.

SM Prime will also open one mall in Jiangsu province, China, by the fourth quarter of the year. SM Prime’s three other malls in China are in Xiamen, Jinjiang and Chengdu.

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