SM Prime Shelves REIT Launch for 2025, Cites Unfavorable Market Conditions

SM Prime Holdings Inc. has decided to put its real estate investment trust (REIT) plans on hold for 2025 due to current market uncertainties. Initially expected to launch in the second half of 2023, the REIT would have helped fund the SM Smart City reclamation project in Pasay. However, company president Jeffrey Lim said the REIT is no longer a priority, as SM Prime will instead tap the debt market and use internal funds to support its ₱100-billion capital expenditure program this year.

Despite market headwinds, SM Prime posted an 11% growth in Q1 net income, reaching ₱11.9 billion. The mall segment contributed 69% of earnings, with other business units including residential, office, and hospitality sectors providing additional revenue.

SM Prime had previously aimed to raise $1 billion from the REIT, backed by 12 to 15 mature malls out of its 30-35 total properties. For now, the company is focusing on liquidity and steady execution as it navigates economic challenges.