SY family-led property developer SM Prime Holdings Inc. (SMPH) is taking it slow with regard to the possibility of an initial public offering of its real estate investment trust, or REIT, but could push through with the listing next year amid easing interest rates.
"We'll have to look into it again as interest rates are coming down," SMPH President Jeffrey Lim told reporters earlier this week.
"Definitely not for this year, so, we'll probably look at it for next year," he added.
The timeline is still indefinite as SMPH is still figuring out where best to use the proceeds of the possible issuance and how the listing could attract potential foreign investors.
"If we will do one, it has to be of a size that will be attractive to foreign investors, because you have the size and liquidity," Lim said.
The REIT will be listed only on the Philippine Stock Exchange as the company does not intend to sell more than 40 percent to foreign investors.
The property developer is "taking it slow" on the planned listing, Lim said, noting that the company still has other sources of funding, such as its $3-billion Euro Medium-Term Note (EMTN) program.
The EMTN was established through SMPH and SM Investments Corp.'s wholly-owned subsidiaries SMPHI SG Holdings Pte. Ltd. and SMIC SG Holdings Pte. Ltd., with the aim of allowing both firms to tap the offshore bond market to fund the SM Group's continued expansion.
"We have other options. I think [that] if the right opportunity is there, we will consider [listing], but it's not at the top of the list" at the moment, Lim added.
He expects 2024 to be a "banner year" for SMPH as the company and the local and global economy have begun to recover from the ill effects of the coronavirus pandemic.
"It (2024) will probably be a banner year because it's also our 30th year, and it's also my 30th year in SM Prime," he said.
SMPH reported a P40-billion net income in 2023, up 33 percent from the previous year. In the first half of 2024, SMPH's consolidated net income grew 13 percent year-on-year to P22.1 billion from P19.4 billion in the same six months of 2023, backed by strong sales.
First-half consolidated revenue rose 8 percent to P64.7 billion from P59.9 billion as the firm chalked up growth across its business segments: malls, residential developments, and offices, hotels, and convention centers.
SMPH shares surged by 60 centavos, or 2.0 percent, to P30.65 apiece on Thursday despite a 1.89-percent drop for the benchmark Philippine Stock Exchange index.
Philippine financial markets were closed on Friday as the country marked All Saints' Day.
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