The Sy family’s SM Prime Holdings Inc., a leading integrated property developer in Southeast Asia, is increasing its capital expenditures to P100 billion to P110 billion next year as it continues to expand its core businesses.
“Actually, our forecast (capex) for this year is P100 billion but I don’t think we’ll get to P100 billion actually,” SM Prime President Jeffrey Lim said in an informal chat with media.
He noted that the company continues to expand its product offerings and is slated to open at least four, maybe even five, new malls in 2025. These will be in La Union, Zamboanga, Laoag, and Sta. Rosa, Laguna near Nuvali.
Aside from new malls in the pipeline, SM Prime is also spending for the expansion and renovation of its existing malls as Lim explained that, “What we do is like, every five years we do a refresh and then, eight years we look into redevelopment.”
“We continuously evolve because consumers now are very demanding—especially the millenials…It’s not just about shopping and eating anymore. It’s the experience when they go inside the mall. So, that’s why, we have to a lot of amenities and then, we also have bring in new concepts,” Lim said.
He cited as an example the SM Mall of Asia where there are already game parks for bowling, basketball, billiards, and table tennis in just one area.
Lim said SM Megamall is already undergoing redevelopment as well as SM’s old malls in Cebu, Bacolod, and Rosales.
SM Prime, through SM Development Corporation, also continues to launch new projects, mostly in the provinces, where demand is stronger, but will include one in Metro Manila.
“But we have to closely monitor the inventory level,” said Lim who disclosed that they currently have enough units in their inventory which is good for 16 months of sales.
For its office leasing business, he said SM Prime is currently constructing 6 ECom in the Mall of Asia complex after noting that the departure of Philippine Offshore Gaming Operators (POGOs) did not have a big impact on the company since “we have not been big in that space.”
While there is more competition from formers lessors of POGOs with vacancies weighing on rental rates, Lim said “the office group that we have is doing well” due to demand from business process outsourcing firms that are expanding and requiring more space.
A portion of SM Prime’s capex is also allotted to the ongoing reclamation project in Manila Bay where it had earmarked a capex of P20 billion for 2024.