SM Prime Holdings, one of the largest integrated property developers in Southeast Asia, is consolidating its residential business under the SM Residences brand which will venture into the luxury market and low-cost housing segment.
In a disclosure to the Philippine Stock Exchange, the firm said it is undertaking a strategic reformat and expansion of its residential business portfolio to optimize its revenue mix across key business units.
The move comes as SM Prime celebrates its 30th anniversary, a milestone that coincides with its long-term plan to gain a stronger foothold in underserved markets and high-growth sectors, including premium and integrated development.
Starting next year, SM Prime will consolidate all residential projects under the SM Residences brand, covering a range of offerings from economic, medium-cost, premium and leisure developments.
SM Prime said it has earmarked over 1,000 hectares of land for its SM Residences projects, slated for development over the next five years. Around 85 percent of which is earmarked for horizontal development.
The National Economic and Development Authority (NEDA) and the Department of Human Settlements and Urban Development (DHSUD) has raised the guaranty ceiling for low and medium-cost housing packages to P4.9 million and P6.6 million, respectively.
“The price adjustments will allow us to target a broader segment of the housing market. It will also enable us to better address the growing demand for affordable and quality housing, while contributing to the government's efforts to reduce the housing backlog,” said SM Prime president Jeffrey Lim.
He added that, “Our growth over the past 30 years has been largely driven by our market-leading position in the mall and retail segment.
“As we move forward, our goal is to unlock the full potential of our extensive land bank through SM Residences and more integrated developments. This will enable us to sustain long-term growth across a broader business portfolio."
For the first nine months of 2024, SM Prime reported a 12 percent increase in consolidated net income, rising to P33.9 billion from P30.1 billion a year earlier. Consolidated revenues reached P99.8 billion, eight percent higher than P92.6 billion.
SM Prime’s mall segment drove revenue growth in the first nine months of 2024, contributing 57 percent of the company’s consolidated revenues.
Total mall revenues rose by percent year-on-year to P56.5 billion, fueled by a eight percent increase in rental income to P48.5 billion. Meanwhile, revenues from cinemas, event ticket sales and other activities grew by four percent to P8.0 billion.
In 2017, SM Prime became the first Philippine company to surpass P1 trillion in market capitalization.
By strategically aligning and expanding its portfolio, the company hopes to sustain its growth momentum, diversify revenue streams and strengthen its leadership position in the real estate sector.