LISTED SM Prime Holdings Inc., the country’s largest mall developer and operator, is looking at the Philippine Real Estate Investment Trust (REIT) Act as a main funding source. The company is just waiting for the law’s guidelines to come out in the second quarter this year.

The REIT Act will provide a regulatory and tax incentive framework for real estate companies to raise cash by publicly listing their income generating assets such as malls or office buildings.

In an interview yesterday, SM Prime chief finance officer Jeffrey Lim said the firm can ‘easily’ raise $300 million this year, which is slightly higher than the P12 billion programmed for the 2010 capital spending program.

‘There are several options for us, but the major fund raising vehicle we will look at is the REIT,’ said Lim, at the sidelines of yesterday’s launch of the SM Fairview Annex.

He declined to say which assets will be transferred into REITs, noting that this would depend on the final implementing guidelines for the new investment option expected to be released in May.

‘If this will become a reality by the second quarter, then SM Prime will definitely look into setting up a REIT,’ he said, adding that the firm remains open to other fundraising instruments. ‘We believe this will enhance shareholder value of SM Prime and unlock the value of our [assets].’

Shares of REITs are to be listed on and traded at the Philippine Stock Exchange. Individual investors may invest in these firms, allowing companies to raise funds from their REITs.

The law also’ provides certain tax incentives but continue enjoying these, the REIT must maintain its status as a listed company and annually give out at least 90 percent of distributable income to shareholders.

The transfer of assets into REITs is seen to fund most of SM Prime’s P12-billon capital spending this year, while the excess could be used to pay down maturing debts. Lim said the company has maturing debts in 2011 amounting to $30 million.

The company also continues to expand this year. Programmed for 2010 is the opening of five new malls.

Yesterday, SM Prime launched the 33,000-square meter expansion to its SM Fairview mall.

‘There should be better opportunity for us in 2010 [and] we will be able to deliver good growth,’ said Lim. This follows growth during what was considered a ‘challenging’ 2009, said Lim.

He disclosed that the company increased its full-year 2009 net income by between 8 percent to 10 percent, while revenues grew between 12 percent and 15 percent.

In 2008, SM Prime’s consolidated net income amounted to P6.41 billion, higher than P5.97 billion in 2008. Revenues hit nearly P18 billion.

In 2010, SM Prime is set to open five SM malls in Novaliches, Quezon City; Tarlac; Masinag, Antipolo City, Rizal; as well as in Calamba and San Pablo, both in Laguna province.

The company expects to end this year with 41 malls in the country with a gross floor area of about 4.5 million square meters.

Overseas, SM prime plans to open one mall in China in Suzhou, to end 2010 with four shopping centers in the mainland.