THE country’s biggest mall builder and operator said it will borrow a substantial part of the money required for next year’s capital expenditures from the local market.  In a briefing, Jeffrey C. Lim, SM Prime Holdings Inc. executive vice president, said the company will borrow P4 billion out of the P6-billion capex for next year while the balance would come from internally generated funds. 

SM Prime is set to launch three malls in the next few months, including SM Baliwag, SM Marikina and SM Rosales, Pangasinan. The developer is also expanding its existing malls like SM North and SM Megamall to cater to a growing clientele. By end-2008, the company expects to have 33 malls nationwide. 

Jose T. Sio, SM Investments Corp. (SMIC) chief finance officer, said the parent company will borrow 40 percent of the group’s P25-billion capital expenditures for next year.

“If it [makes] good sense then we might go for foreign debt [but] right now we’re (leaning) toward peso loans,�? he said.  Earlier, SMIC said next year’s spending program was almost P6 billion higher than this year’s and about P15.6 billion of the capex would go to its property development, P6 billion to its mall business, P2.3 billion its banking arm, and the remaining P2 billion to its retail business. 

At-end September, SMIC’s net income had grown 14 percent to P8.5 billion, with its recurring income up 22 percent to P6.2 billion over a year ago. Consoli-dated revenues surged 96 percent to P82.6 billion, 82 percent of which came from its retail business, which jumped 130 percent to P65.2 billion due to the acquisition of SM Supermarkets and Hypermarkets last year. 

By the end of this year, SMIC expects total revenues to hit P100 billion.  The SM group is developing its SM Mall of Asia Complex and its large-scale ecotourism project in Nasugbu, Batangas. At the same time it is expanding the Taal Vista Hotel, converting the 400-room Cebu hotel into a five-star facility managed by Sofitel.

The group also began construction of a 400-room Radisson Hotel in the Mall of Asia Complex to be opened in 2009.  Lim said the SM group may finalize the acquisition of founder Henry Sy’s malls in China valued at P10.8 billion. These would be folded under SM Prime by the second quarter next year.