SM Prime revives $1-billion REIT IPO

SM Prime Holdings Inc. is considering reviving an initial public offering of a real estate investment trust that could raise as much as $1 billion, according to people familiar with the matter, in what would be the largest such listing in the Philippines.

The company has restarted discussions with advisers on listing its shopping mall portfolio through the REIT, the people said, asking not to be identified as the information is private. A first-time share sale in Manila could happen as soon as the fourth quarter, the people said.

Deliberations are preliminary and SM Prime could still decide against a transaction, the people said. A representative for SM Prime didn’t immediately respond to requests for comment.

At $1 billion, the listing could be the biggest ever in the Philippines by a REIT, surpassing RL Commercial REIT’s $450 million offering in Sept. 2021, according to data compiled by Bloomberg. There haven’t been any IPOs in the country so far this year.

Founded in 1994, SM Prime is the largest shopping mall developer and operator in the Philippines, according to its website. It has 82 malls in the Manila area and seven malls in China. SM Prime has also expanded into developing residential projects, office buildings and hotel and convention centers.

The company has been exploring a REIT IPO for some of its assets to raise funds since at least 2020, when President Jeffrey Lim confirmed that the firm was planning a REIT offering and said no banks were formally appointed. In 2022, Lim discussed in a media briefing the possibility of packaging office space assets in a REIT ahead of a mall unit listing.

Shares of SM Prime have fallen about 6% in the past 12 months, giving the company a market value of about $19.2 billion. — Bloomberg