Shopping mall giant SM Prime Holdings Inc. said its net earnings grew nine percent in the first nine months of the year with the entry of new malls and the expansion of existing ones amid a slowing economy.

Consolidated net income reached P4.7 billion from January to September this year on the back of a 10-percent growth in revenues to P12.8 billion.

The revenue figure included the operations of the three SM malls in China which SM Prime acquired late last year.    These are SM Xiamen, SM Jinjiang and and SM Chengdu.

“It is very encouraging for us to see steady growth in SM Prime’s operations this year on the back of a very challenging business climate. We feel fortunate that Asia appears to be in a much better position to weather the global financial turmoil,” said SM Prime president Hans T. Sy.

SM Prime said rental fees continued to account for the largest share to total revenues, rising 14 percent to P11.1 billion.   The increase came from both same store rental growth, which increased five percent and from additional floor space generated by new malls SM City Marikina last September and SM City Bacolod, SM City Taytay and SM Supercenter Muntinlupa in 2007.

The three malls that had undergone expansion last year were SM City Pampanga, SM City Cebu and SM Mall of Asia. Combined, the new malls and expansions added 475,000 square meters (SQM) to SM Prime’s total gross floor area (GFA).

The average occupancy rate for the new malls now stands at 94 percent, SM Prime said.

Meanwhile, cinema ticket sales, declined seven percent to P1.3 billion from P1.4 billion in 2007 due to a dearth of blockbuster movies during the period.

Operating expenses increased nine percent to P5.9 billion. Effective cost-saving measures undertaken in all SM malls have kept costs growing by single-digit levels, notwithstanding spiraling fuel and power costs, SM Prime said.

Thus, income from operations went up 12 percent to P7 billion from P6.3 billion.

For the remainder of the year, SM Prime will open SM Supercenter Rosales in Pangasinan and SM City Baliuag in Bulacan. The new 15,000-sqm Atrium of SM Megamall is also expected to be open for business this month.

SM City North EDSA and SM City Fairview are also currently undergoing expansion and due for completion in 2009.

By end-2008, SM Prime will have 33 malls nationwide. Including the SM China malls, total estimated GFA will reach 4.7 million sqm.

Meanwhile, SM Development Corp., a property unit of the SM Group, reported a 97.1 percent drop in net income during the period under review due to unrealized mark-to-market losses from equity investments.

Income from real estate operations, however, grew grew five-fold to P642 million. Revenues surged 122 percent to P2.9 billion on the back of stronger sales and the substantial completion of Mezza Residences and cluster six of Chateau Elysee.

From January to September this year, SMDC pre-sold a total of 2,037 residential units worth P3.7 billion or an increase of 67 percent from the previous level.

“We are strongly encouraged by the improved performance of our core business in residential development. At this point, the domestic market remains highly viable given the sustained demand we are experiencing. We are however closely monitoring the developments amid the turbulent external environment to enable us to make the necessary adjustments, if and when we are required to do so,” said SMDC president Roger R. Cabuñag.

Chateau Elysee, a six-cluster mid-rise condominium project in Parañaque City, is now in its fourth cluster, which is 96 percent completed while Mezza Residences across SM City Sta. Mesa is 89 percent completed.

Other projects of the company include Berkeley in Katipunan Road, Grass Residences beside SM North EDSA, and Lindenwood Residences (a residential subdivision in Muntinlupa City).

In August this year, SMDC broke ground for two more condominium projects, the Sea Residences near the Mall of Asia Complex in Pasay City and Field Residences in Sucat, Parañaque City. Next to be launched are Princeton Residences beside Gilmore Station of LRT 2 line along Aurora Blvd., and Tree Residences in Cainta, Rizal.