SM PRIME HOLDINGS INC., the country’s largest shopping mall empire, is planning to raise at least $300 million from the offering of shares in real estate trust funds (REITs).

The company will spin off some of its shopping centers to the REIT, an instrument that gives investors the option to invest directly in the finished product instead of the property developer itself.

The plan was to tap the REIT this year but the schedule would depend on how soon the implementing rules of the new REIT enabling law would be issued, SM Prime chief finance officer Jeffrey Lim said yesterday.

“It’s good for the development of capital market in the Philippines. This will bring new set of investors into the company. It will also be good for SM Prime because it will allow us to unlock values from our properties and raise more capital,” Lim told reporters at the inauguration of SM Fairview Annex 2.

Under the proposed bill, REITs must have at least 1,000 public shareholders who will own a total of at least one-third of the outstanding capital stock of the company, each owning at least 50 shares.

The minimum paid-up capital must be P300 million. At least 75 percent of the deposited property of the REIT must be invested in or consist of income-generating real estate.

Lim said SM Prime had yet to make a decision on how much it would raise from an offering of REIT but noted that $300 million could be easily raised.

“We haven’t decided yet on the number of malls and location (to be included in the REIT). The first thing we’ll do is to hire financial advisers,” he said.

Proceeds from the REIT will be used by SM Prime to fund its P12 billion capital expenditure program for this year. The excess proceeds (as the total amounts to about P13.8 billion in peso terms) could be used to pare down debt, Lim said.

He said SM Prime would have to plan such an offering size to provide sufficient liquidity for these instruments.

SM Prime, the country’s largest retail landlord, expects to end this year with 4.5 million square meters of retail space for lease. SM Fairview Annex contributed 300,000 sqms in additional floor area.

The company operates 36 domestic shopping malls plus another three in China.