SM PRIME Holdings, Inc. has taken a step closer to its planned major fund raising which could happen by August, the key property development vehicle of SM Investments Corp. (SMIC) said yesterday.

SM Prime said in a brief statement attached to a disclosure that “its board of directors approved the issuance of fixed-rate peso retail bonds of up to P25 billion,” adding that the debt notes will be offered in tenors of five, six and seven “and/or” 10 years.

Asked on timing of the issue, SM Prime Vice-President for Finance Teresa Cecilia H. Reyes replied by phone: “There is still no timeline available, but we expect that it should be offered by August this year.”

She added that the exercise has yet to be approved by the Securities and Exchange Commission.

Ms. Reyes said SM Prime gas hired First Metro Investment Corp. and BDO Capital & Investment Corp. as its joint underwriters, managers and bookrunners.

SM Prime said in its statement that “proceeds of the bonds will be used to finance capital expenditures for expansion of the company’s malls, offices and hotel operations.”

SMIC’s property business — consolidated last year under SM Prime — consists as well of SM Development Corp.; Highlands Prime, Inc.; Costa del Hamilo, Inc.; Prime Metroestate, Inc.; and SM Hotels and Conventions Corp.

SM Prime said in a separate statement that its consolidated net income rose 11% to P4.58 billion last quarter from P4.11 billion in the same three months last year.

Consolidated revenues increased 3% to P15.35 billion from P14.95 billion.

Rental revenues made up 56% of consolidated revenues, climbing 12% annually to P8.56 billion from P7.63 billion. “The increase in rental revenue was primarily due to the new malls that opened in 2012 and 2013, namely: SM City Olongapo, SM City Consolacion, SM City San Fernando, SM City General Santos, SM Lanang Premier, SM Aura Premier and SM City BF Parañaque with a total gross floor area of 818,000 square meters,” the statement read, adding that, without the new malls and expansion, “same-store” rental growth stood at 7%.

Real estate sales, however, fell 17% to P5.02 billion from P6.01 billion, “primarily due to sales take-up attributable to only two project launches in 2012 of about 4,600 units… compared to the nine project launches in 2010 and 2011 of about 26,700 units…”

“On the average, it takes about two years before revenues are recognized due to the percentage of completion accounting,” the company explained.

Still, cinema ticket sales increased 40% to P1.06 billion from P760 million due to the opening of digital cinemas at new malls “and the showing of local blockbuster movies with 100% sales growth year on year.”

Amusement and “other revenues” increased 30% to P710 million from P546 million, mainly due to the opening of new rides at Sky Ranch in Tagaytay City in March last year and of the ice skating rink in SM Megamall last January.

Consolidated operating expenses grew 11% to P5.75 billion from P5.18 billion.

“We are off to a good start this year, maintaining steady growth for the first quarter of 2014,” the same statement quoted SM Prime President Hans T. Sy as saying.

The company’s shares gained eight centavos or 0.48% to close P16.70 apiece yesterday from P16.62 each on Friday last week.