SM Prime Holdings Inc. is shifting its focus toward expanding recurring revenue streams as persistent macroeconomic headwinds weigh on the property market through next year.

John Nai Peng C. Ong, SM Prime chief finance officer, said the Sy-led developer plans to lean more heavily on stable commercial assets while counting on ready-for-occupancy (RFO) residential units to boost property sales once completed.

“We have a solid pipeline that positions us well through the near-term challenges,” Ong said in a briefing. “So, for next year, we are looking at the recurring business segment, and we plan to open key retail, hospitality or hotels, as well as MICE (meetings, incentives, conferences, exhibitions) facilities to further elevate our estates.”

The capital expenditures will fund commercial developments including the SM Harrison Plaza retail hub and the phased expansion of SM Megamall.

Project launches in the pipeline also comprise hospitality and convention venues such as Park Inn by Radisson at SM City Dasmariñas, the SMXCITE facility in Pasay, Balea at Pico Terraces, and North Towers 4 and 5 in SM North EDSA.

For the remainder of 2026, Jeffrey C. Lim, SM Prime president and chief executive officer, said overall operational results should at least equal the previous year’s performance.

Non-residential segments are expected to sustain momentum and absorb softer residential demand during the second half of the year.

The company’s residential arm, SM Development Corp. (SMDC), will pause new project launches in Metro Manila for the rest of the year. However, the company is targeting between ₱30 billion and ₱35 billion in reservation sales in the second half—up from the ₱25 billion generated in the first six months.

To protect revenues, SMDC is refining its sales process to curb cancellation rates while prioritizing the delivery of active construction projects.

“We have quite a number of condos and developments that are still under construction and we believe that, when we get these developments into the RFO stage, the buyer is less likely to cancel because the buyer can move in already,” said Cris Noel E. Torres, SM Prime executive vice president.

SMDC held an inventory of roughly 29,000 units at the end of the first half. Finished, unsold RFO units accounted for 13 percent of total inventory, while ongoing developments made up the remaining 87 percent.

“That means we are focused on hastening the completion of these in-process or ongoing inventories,” Ong said. “That's because we continue to see that RFOs tend to have a faster reservation take-up.”