SM to open 3 new malls in 2021 despite COVID-19 struggles

Despite the economic impact of the coronavirus pandemic, property and mall developer SM Prime Holdings still intends to open 3 new malls in 2021.

The Sy-led company is opening malls in Daet City, Camarines Norte; Roxas City, Capiz; and Caloocan City.

SM said these plans are still subject to local government units' guidelines and the prevailing quarantine classification.

The new malls, as well as the expansion of some existing malls, will add almost 270,000 square meters of gross floor area to SM's retail space.

"We welcomed 2021 with high hopes as most areas in the Philippines, including Metro Manila, were placed under GCQ (general community quarantine) in the 1st quarter of 2021. Along with the sustained growth of our residential business, our mall affiliates together with many of our SME (small and medium enterprise) partners were able to reopen their shops, allowing our mall business segment to perform better," SM Prime president Jeffrey Lim said.

Mall earnings

SM Prime saw some "slight recovery" in its earnings in the 1st quarter of 2021, as mobility restrictions due to the pandemic eased.

Consolidated net income stood at P6.5 billion in the January-March period.

On a year-on-year basis, that is lower by 21.7%. But on a quarter-to-quarter basis, it is an almost 80% growth from the P3.6 billion in the 4th quarter of 2020.

Meanwhile, revenues in the 1st quarter of 2021 stood at P20.8 billion, 19% lower than in the same period last year and almost the same as in the 4th quarter of 2020.

SM Prime's mall business got P5.9 billion in revenues, 9.4% higher than the 4th quarter's P5.3 billion, but only a little over half of the P11.3 billion in revenues on a year-on-year basis.

The quarter-on-quarter growth was driven by revenues of operating mall tenants, which stood at P5.6 billion.

SMDC

Meanwhile, its residential business, SM Development Corporation (SMDC), reported a 5% revenue growth of P11.9 billion in the 1st quarter of 2021 from the P11.4 billion in the same period last year. This accounted for 57% of the company's consolidated revenues.

Reservation sales surged 31% to P32.4 billion.

The newly launched residential projects that are located in Metro Manila such as Gold Residences in Parañaque City, South 2 Residences in Las Piñas City, Mint Residences in Makati City, Sands Residences in the City of Manila, and Sail Residences in Pasay City accounted for almost 70% of the reported reservation sales.

SMDC aims to launch 15,000 to 20,000 residential units in 2021.

SM Prime's other business segments, which include offices as well as hotels and convention centers, contributed P1.6 billion to the company's consolidated revenues. – Rappler.com

Ralf Rivas

A sociologist by heart, a journalist by profession. Ralf is Rappler's business reporter, covering macroeconomy, government finance, companies, and agriculture.

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