SM Prime Holdings, the mall development arm of the SM Investments Corporation, is also considering the issuance of real estate investment trusts (REITs) overseas for its China mall holding unit if it is deemed to be more profitable than an initial public stock offering.

REIT is an investment vehicle created from pooled real estate properties that provide greater dividends than the conventional form of securities investments. REIT is an attractive alternative due to its high yield compared to that of a fixed-income and regular-paying company.

In an informal chat with reporters, SMIC chief finance officer Jose Sio said the are currently considering both an IPO and REIT issuance but will definitely sell and list these overseas where securities fetch a better value than the local capital market.

“In China, stocks trade at 25 to 30 times the value of their capital while you get only 14 to 15 times in the local market,” Sio said. SM Prime is planning to consolidate all its China mall operations into SM Land (China) Limited (HK).

Sio said the they are still trying to decide whether to list the unit in Shanghai, Hong Kong or Singapore noting that while they do not have operations in Singapore, they have a bigger equities market there.

He explained that there is a bigger pool of investors in these markets and these investors have larger capacity for investing. Sio said Chinese investors will also be more familiar with their operations in China.