SM Prime Holdings, Inc., the country’s largest mall developer, has secured P6.55 billion ($150 million) in its maiden equity placement with various institutional investors.

Fresh funds will be used to develop new malls in the Philippines and China, the company told the local bourse yesterday.

“The equity placement [was composed of] 569.608 million common shares, with the placement price set at P11.50 per share following a successful overnight bookbuilding process,” the company said.
Investors came from Asia, Europe and the United States.

“This placement is expected to broaden our shareholder base and increase trading liquidity,” said SM Prime President Hans T. Sy.

The equity deal, the first since the company went public in July 1994, was a result of a delay in the government’s implementation of the law on real estate investment trusts (REIT).

The mall developer wanted to raise $500 million through a REIT firm but the Bureau of Internal Revenue has yet to issue rules implementing the REIT law’s tax provisions.

“[The delay in REITs is] one of the reasons [for the fund-raising]. We have to move on and continue with our programs,” Jeffrey C. Lim, SM Prime executive vice-president and chief finance officer, told reporters late Wednesday.

Macquarie Capital (Singapore) Pte. Ltd. and CLSA Asia Pacific were the joint bookrunners for the transaction.

The new shares will be listed on the local bourse this month.

Mr. Lim told reporters profits of SM Prime likely grew by double-digits in the third quarter compared with the previous year.

Consolidated net income of SM Prime jumped by a tenth to P3.8 billion in the first half due to higher consumer spending.

Meanwhile, SM City Calamba, the 39th mall under SM Prime, will open tomorrow.

“It is SM’s third mall in Laguna, a clear testament to the robust progress and development that the province has sustained,” Mr. Sy said.

SM City Calamba has a gross floor area of 66,516 square meters (sq. m.) and occupies 55,102 sq. m. of land. It has a leasable area of 44,740 sq. m., 82% of which has already been awarded to various tenants such as SM Supermarket, SM Department Store, SM Appliance Center, Ace Hardware, Jollibee, McDonald’s, KFC, Red Ribbon, and National Book Store.

By yearend, SM Prime will have 40 malls in the Philippines, with an estimated gross floor area of 4.8 million sq. m.

Shares in the mall developer were unchanged at P11.98 each yesterday.

Meanwhile, the SM group’s property unit SM Development Corp. claimed to have a 50% share of the real estate market in Tagaytay with its first high-rise condominium project outside Metro Manila.

The company on Wednesday launched the second tower of its Wind Residences project, with a total of 862 units on a 30,359.61-square-meter property in Tagaytay.

The first tower was launched last December 2009. “Our first tower is now 80% sold. We have started construction this month and our target date of turnover is December 2013,” project director Sandro Vicente P. Javier said.

The second tower will begin construction in February.

Wind Residences will have 10 towers. Phase one of the project will have five towers while Phases two and three will consist of three and two towers, respectively.