SM Prime Holdings Inc., the country’s largest property developer, is tapping the debt market this year, floating as much as P33.5 billion to fund its domestic expansion and to build more malls in China, while dropping its earlier effort to raise cash from share sale.

Jeffrey Lim, SM Prime chief financial officer, said at the sidelines of COL Financial Group’s forum that the debt exercise would be done in two tranches, the first of which would involve a P20-billion bond float for the domestic market.

The second tranche, on the other hand, would raise up to $300 million (about P13.5 billion).

The domestic float will carry a tenor of seven to 10 years. The $300 million will involve a syndication of loans to bankroll its expansion in China.

“It will be for land banking and for development. But we also need funding for the construction of our Tianjin mall, which will open next year. And we will be planning for Yangzhou set to start construction by next year because we need to open that going to 2016,” Lim said, referring on the proceeds of the funds.

All the debt exercises aim to fund the SM Group’s P80 billion in capital expenditures for the year, P70 billion of which would be spent for the property group; the rest is earmarked for its retail and banking units.

About three quarters of the proceeds of the domestic float, Lim said, would go to mall development, as the group plans to spend some P7 billion to P8 billion to expand existing malls in the country.

Lim said SM Prime is also looking to acquire two to three more locations in China to expand their China malls.

He said SM hopes to open an average of one mall per year in China, the world’s second-largest economy, and these will still be in the second- or third-tier cities.

For the domestic market, where the bulk of SM revenues still comes from, the expansion include its flagship Mall of Asia (MOA) in Pasay City, on which it will build an additional 200,000 square meters of retail space, or an equivalent of one community mall. The company also lined up to expand its shopping malls in Lipa, Bacolod, Iloilo and North Edsa in Quezon City.

The group is also eyeing to put up office spaces for the business-process  outsourcing sector near its facility in North Edsa and Taytay.

The expansion of MOA, which was previously its largest mall, would start by the third quarter of the year and would be completed by 2016. The cost of construction is about P1.8 billion.

The rest of its expansion is set to be completed within two years, depending on how large the expansion is; some of its projects involve doubling the size of the mall.

For the year, the SM group is targeting a growth of 14 percent of its revenues from the malls alone, from a flat growth in 2013.

SM Prime reported that its profit for last year reached P16.72 billion, slightly up from the previous year’s P6.64 billion.

Consolidated revenues reached P59.79 billion, or 5 percent higher than the previous year’s P57.22 billion.

Rental revenues accounted for 54 percent of total. Rental revenue grew 11 percent at P32.20 billion from P28.95 billion in 2012