SM Prime Holdings Inc., the merged property development arm of the SM Group, said Monday net income in the first quarter climbed 11 percent to P4.58 billion from P4.11 billion a year ago, on higher rental revenues.

“We are off to a good start this year maintaining a steady growth for the first quarter of 2014. As we move towards our five-year road map, we are very optimistic that SM Prime will achieve its targets,” SM Prime president Hans Sy said.

SM Prime said in a disclosure to the stock exchange consolidated revenues rose 3 percent to P15.35 billion in the January-March period from P14.95 billion year-on-year, as higher rental revenues offset the decline in real estate sales.

Rental revenues, which accounted for 56 percent of the consolidated revenues, grew 12 percent to P8.56 billion in the first quarter from P7.63 billion in the same period last year.

It said the increase in rental revenues was led by the opening of new malls in 2012 and 2013, including 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 combined gross floor area of 818,000 square meters.

It said excluding the new malls and expansions, same-store rental growth reached 7 percent.

Real estate sales, however, recorded a 17-percent drop in the first quarter to P5.02 billion from P6.01 billion in 2013. “The decrease is primarily due to sales take up attributable to only two project launches in 2012 of about 4,600 units from Breeze and Grace Residences compared to the nine project launches in 2010 and 2011 of about 26,700 units mainly from Jazz, Light, Wind, Shell and Green Residences,” the company said.