SM Prime Holdings, Inc. (SM Prime), one of the largest integrated property developers in Southeast Asia, reported record high profits as it remains optimistic due to strong consumption, lower interest rates, and continued recovery in retail and tourism.

“With inflation contained and policy easing underway, we expect stronger consumer sentiment to drive demand across our businesses. Our P100 billion capex plan is on track, focused on high-impact developments that will build long-term value,” said SM Prime President Jeffrey C. Lim.

The firm recorded an 11 percent rise in first-half net income to an all-time high of ₱24.5 billion in 2025 from ₱22.1 billion last year, driven by higher rental income, real estate sales, and ancillary revenues.

Consolidated revenues improved by five percent during the same period, to ₱68 billion this year from ₱64.7 billion in 2024.

Rental income from malls, offices, hospitality, and MICE contributed 60 percent of the total. Real estate sales made up 29 percent, while the remaining 11 percent came from cinema ticket sales, food and beverage, amusement, and related offerings.

First-half earnings before interest, taxes, depreciation, and amortization rose 10 percent to ₱41.6 billion from ₱37.9 billion last year, while operating income increased 11 percent to ₱34.4 billion from ₱31.1 billion.

“The redevelopment and new attractions at our flagship Mall of Asia drove strong foot traffic and tenant sales. Robust consumer activity and improving business confidence also lifted contributions across our portfolio,” said Lim.

Malls accounted for the largest share of earnings at 69 percent, contributing ₱17 billion—up 14 percent year-on-year—boosted by new openings, higher foot traffic and strong occupancy.

Income from residential projects hiked two percent from ₱5.0 billion to ₱5.1 billion, supported by revenue recognition from completed units and prior-year sales. The segment accounted for 21 percent of total earnings.

The office and warehouse segment contributed seven percent, with earnings increasing nine percent to ₱1.7 billion from ₱1.6 billion owing to improved warehouse occupancy.

Hotels and convention centers accounted for three percent of total income after contributing ₱635 million, up 20 percent from ₱527 million. Strong room bookings and a busy MICE calendar drove the increase.

“Our results underscore the resilience of our businesses and the strength of our diversified portfolio. With our capex program progressing as planned, we are well-positioned to drive long-term growth across key markets,” said Lim.

For the second half of 2025 and beyong, he said catalysts for growth will be the "easing inflation plus the NCR wage adjustment, which I think is effective July 18, will support household consumption moving forward.

"We also see lower interest rates to drive more residential sales and our business expansion. And thirdly, our regional expansion of malls. We just opened SM Laoag and we will open SM La Union in October. And offices, where we are building The Core Towers which will also enhance rental income in the second half."

Meanwhile, for the firm's residential business, Lim said "We are seeing recovery through lower cancellations especially towards June and July and we foresee steady take-up, which should result in a gradual decline in our inventory.

"Once the market normalizes, we have enough inventory to capture new demand without crashing new launches. Meanwhile, we are actually basing our launches and prioritizing provincial locations where demand remains solid. So our strategy for the residential side is that we will pursue our provincial locations where we see strong demand for certain residential locations."

He noted that, of the first half's ₱24.5 billion reservation sales, a significant 65 percent of the units came from their regional site's mid-rise building projects.

SM Prime is planning to raise about ₱15 billion to ₱20 billion from the issuance of retail bonds in the fourth quarter of 2025 with the proceeds to be used to refinance maturing loans as well as to fund the increase in development costs.