SM Prime Holdings, Inc. (SM Prime), the Philippines’ leading shopping mall developer and operator, reported its net income increased by 15.0% to Php5.6 billion from Php4.9 billion in the same period last year.
Revenues in the first half expanded 14.0% to Php16.6 billion from Php14.6 billion in the same period last year.
Rental revenues, which accounted for 83.8% of total revenues, rose 11.8% to Php13.9 billion, while EBITDA rose 14.0% to Php11.1 billion, for an EBITDA margin of 67.0%. New malls opened in 2012 and 2013 with a total GFA of 698,000 square meters (sqm) largely pushed rental revenues higher, add to that the higher contribution of SM’s China malls. New malls opened in 2012 and 2013 were SM City Olongapo, SM City Consolacion, SM City San Fernando, SM City General Santos, SM Lanang Premier and SM Aura Premier. Meanwhile, same-store rental growth stood at 7.0%.
SM Prime’s five malls in China contributed Php1.4 billion in revenues or 8.0% of total consolidated revenues of SM Prime. In terms of rental revenues, the China operations contributed 10.0% to SM Prime’s consolidated rental revenues. Gross revenues of the five malls in China increased 9.0% in 2013 compared with 2012 largely due to improved mall productivity and lease renewals for the first three malls opened, namely SM Xiamen, SM Jinjiang and SM Chengdu. The average occupancy rate for these first three malls is at 93%.
SM Prime has 47 Supermalls strategically located in the Philippines with a total gross floor area of about six million square meters (sqm). In China, SM Prime has five Supermalls located in the cities of Xiamen, Jinjiang, Chengdu, Suzhou and Chongqing with a total gross floor area of around 0.8 million sqm.
Early in the year, SM Prime opened SM Aura Premier, a state-of-the-art civic center in Taguig which spans a total gross floor area of 234,892 sqm. As an integrated development, SM Aura incorporates office towers, a chapel, a convention center, and mini-coliseum, supported by a retail podium with an upscale look and feel. SM Aura Premier also aims to be one of the first civic centers in the country to be certified Gold under the US Green Building Council Leadership in Energy and Environmental Design (LEED) program, an internationally-recognized green building program established in 135 countries.
For 2013, the company is also set to expand SM Megamall this year, with the opening of Building D. By yearend, SM Prime will have 48 malls in the Philippines and five in China with an estimated combined GFA of seven million sqm.
Shareholders of SM Prime recently approved a merger between SM Prime and SM Land, Inc. which will pave the way for the consolidation of the property-related businesses of the SM Group of Companies. The consolidation is intended to create an integrated real estate company, which will allow the merged entity to undertake larger scale projects with the participation of all of its business units. Its expanded scope, under a simpler and more transparent corporate structure, is expected by SMIC and SM Prime to create efficiencies and further crystalize the value of the Group’s real estate businesses. The merged company will be among the largest integrated property developers in the region with offerings spanning across diverse sectors of mall, office, residential, hotel and leisure development.