SM Prime allots P80-B for capex this year (Sabong News)
Author
James A. Loyola
Date
APRIL 25 2022
SM Prime Holdings Inc. is allotting a capital expenditure budget of P80 billion for this year to fund landbanking activities as well as the development of malls and residential projects.
During the firm’s annual stockholders’ meeting, SM Prime President Jeffrey Lim said 20 percent of the capex budget will be for land acquisition while the balance will be for construction and land development.
He noted that, “We’re optimistic about the prospects for 2022” because of the reopening of the economy under Alert Level 1 and, while business may not yet return to pre-pandemic levels by the end of this year, they are targeting that about 80 to 90 percent of that level for leasing and residential sales.
For SM Prime’s malls, Lim said sales and foot traffic are actually already close to pre-pandemic levels during weekends although business still has to catch up during weekdays.
“We still have to work some more to bring weekdays to pre-pandemic levels but, we believe that once the work from home… or when the government really pushes for companies to really go back to their offices, I think that would be good,” said SM Supermalls President Steven Tan.
For its residential business under SM Development Corporation, the firm is increasing its focus on mid-rise and horizontal projects in the provinces as these are more affordable and have higher demand.
“The products that we’ve been launching lately and that we will be launching for the rest of the year will predominantly be medium rise, which has lower price points. And these are the ones that are selling very well now,” said Lim.
Medium rise units are priced at around P3.2 million each but SMDC is also venturing into the horizontal (house and lot) market which has even lower price points.
“We have actually started in the horizontal market which is in the lower price points,” he said adding that they have already started in Baliwag, Bulacan; Sta. Rosa, Laguna; and in Iloilo.
Medium-rise projects already comprise about half of SMDC’s portfolio as it moves to the provincial areas which benefit from remittances from overseas Filipino workers.
“What we’re trying to do is to bring the products near the market. So that’s the provincial areas. And what is rather attractive there is that these products are alongside our malls or are near our malls. So it creates the opportunity for the integrated approach of the SM Prime,” he explained.
