Shopping mall operator SM Prime Holdings Inc. said it has plans to launch its own real estate investment trust (REIT), but the ongoing pandemic has pushed the company to rethink its strategies.
John Nai Peng C. Ong, the company’s CFO, also said the company is still firming up the structure of its REIT.
“The pandemic has got to do with the timing. It’s a timing consideration,” Ong said.
“Personally, hopefully not. We have been working on it for quite a while,” he said when asked if the REIT launch will happen in the next three years, based on the company’s timetable.
Many investors are waiting for SM Prime to list its own REIT on the Philippine Stock Exchange (PSE). The company builds residential condominiums, offices and horizontal housing units.
Ong said is looking at a number of options for its REIT, such as injecting office properties or even its retail business or the commercial spaces in the lower levels of their buildings that were built mainly for the tenants.
Jeffrey C. Lim, the company’s president said the company is looking at having an office REIT initial public offering (IPO).
“We continue to look at it (REIT) and explore it. Given the situation now we will work on the potential office first; the mall will come in later. So the plan is there; we are working on it. We cannot disclose it at this time because we have not decided on the assets and the structure yet,” Lim said.
The company may not inject malls in its REIT at a time when the country is still in the middle of a pandemic. Foot traffic in shopping centers is still not back to prepandemic levels, especially during weekdays, according to Lim.
Weekend traffic in the malls are close to pre-pandemic levels, but that may change in an instant if a more stringent alert level is imposed due to a surge in Covid-19 cases.
Some of the large spaces of its malls were also converted to other uses, such as a vaccination site or other government services such as satellite sites for passport or national ID application.
“We believe that even if we’re not able to reach a pre-pandemic level before the end of the year, at least we should target between 80 to 90 percent (of 2019 figures). So we are optimistic about the prospect for 2022,” Lim said.
SM Prime may be overtaken by the Villar Group which has already secured the go-signal of the Securities and Exchange Commission (SEC) to conduct an IPO for its REIT.
VistaREIT Inc. (Vreit), the REIT of property developer Vista Land and Lifescapes Inc., said it will focus on community shopping malls.
With an appraised P35.95-billion portfolio valuation, Vreit banks on a strong portfolio of 10 community malls and two Philippine Economic Zone Authority-accredited office buildings, making it the first REIT in the country that offers majority community malls.
Vreit expects to conduct the IPO from May 10 to 16 and debut on the PSE on May 26, based on the timetable the company submitted to the SEC.