SM Prime Holdings, Inc. plans to issue P20 billion in retail bonds for the next three months.

Jeffrey Lim, SM Prime chief finance officer, said the bonds will mature in 7 and 10 years.

The P20 billion bonds will finance the P36 billion capex SM is budgeting for the year. SM Prime is the new holding company grouping all property operations of the conglomerate.

Lim then said that about 70-75 percent of the amount will go to mall development, with the group eyeing to spend P7-8 billion for expansion of existing malls. 

The company also plans to buy more properties.

In another development, SM Prime will also raise another $320 million in dollar-denominated bonds that will be used for the expansion of its shopping malls in China.

 The dollar bonds are more short term compared with the peso bonds, maturing at five to seven years.

“It will be for land banking and for development.  

The Tianjin Mall will open next year while construction will start for the Yangzhou by next year for soft opening by 2016 “ said Lim. 

Lim said SM Prime is also looking to acquire two to three more locations in China to expand their China malls. 

SM Prime Holdings, Inc. (SM Prime) recently reported that profit for last year reached P16.72 billion, slightly up from the previous year’s P6.64 billion.

Consolidated revenues reached P59.79 billion 5 percent higher than the previous year’s P57.22 billion.

Rental revenues accounted for 54 percent of total. Rental revenue grew 11 percent at P32.20 billion from P28.95 billion in 2012.

In May 2013, SM initiated a corporate restructuring exercise to consolidate the SM Group’s property companies and real estate assets under SM Prime. 

The reorganization paved the way for the delisting of shares of SM Development Corp. and Highlands Prime Inc., the merger of SM Land and SM Prime with the latter as the surviving entity, and the injection of the SM group’s real estate assets and shares in property companies into the mall developer.

It was approved by the  Securities and Exchange Commission (SEC) five months later.

SM Prime said its consolidated profit would have increased by 8 percent to P17.55 billion were it not for the one-time restructuring cost of P1.28 billion.

This is the first time the property group of the SM Group of companies is reporting as a single property group, consolidating its mall, residential, office and tourism development businesses.