SM Prime Holdings—controlled by the family of the late retail billionaire Henry Sy Sr.—will spend 100 billion pesos ($1.7 billion) this year to expand its property footprint across the Philippines.
“These planned investments position us to meet evolving customer needs while driving SM Prime toward its next phase of growth,” Jeffrey Lim, president of SM Prime, said in a statement. “Our robust project pipeline will enhance the expansion of strategic initiatives across our diversified portfolio.”
SM Prime will spend 67 billion pesos of the capital expenditures, or about two thirds of the total, on residential projects and master planned communities outside of the Metro Manila area, where developers are sitting on thousands of unsold condominium units.
There are about 74,000 unsold apartments—valued at least 158 billion pesos and the highest inventory in eight years—in the National Capital Region, according to Joey Bondoc, an analyst at property consultancy Colliers Philippines.
The glut in Metro Manila—which will take about eight years to clear—has been building up since the pandemic due to the exit of Philippine offshore gaming operators and elevated interest rates, according to Bondoc. Personal income and remittances also haven’t risen as fast as condo prices, added.
SM Prime said its residential projects this year will include integrated property development projects primarily in the main island of Luzon as well as the Visayas region in central Philippines.
The remainder of this year’s budget will be spent to expand SM Prime’s shopping malls, offices, hotels and convention centers.
About 21 billion pesos will be used to build an additional 205,400 square meters of new shopping malls and redevelop 124,488 square meters of existing retail space. SM Prime currently has 87 malls in the Philippines with 9.4 million square meters in gross floor area.
SM Prime will spend another 12 billion pesos to expand its offices, construct two new convention centers, and renovate and expand its hotels. The company has 22 office towers with 1.6 million square meters of built up space. It also has 10 hotels and eight convention centers.
The Sy family also has interests in banking, geothermal energy, logistics, retail, and shipping through its listed holding company, SM Investments. The group traces its roots to Henry Sy Sr., who sold overrun shoes in 1958 at a store in Manila he aptly called Shoemart. Following Sy’s death in 2019, his six children—Teresita, Elizabeth, Henry Jr, Hans, Herbert and Harley—inherited his fortune. The family is the richest in the Philippines with a net worth of $13 billion.
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