(Source: Seeking Alpha | November 21, 2017)
SM Prime Holdings continues to be the largest mall operator in the Philippines that has a stable mall portfolio with average 94% occupancy rate and 7% same-store rental growth.
For the past five years, its overall revenue grew 8.5% annually while net income grew 12.5% annually. The company earns 10.5% ROE, in line with industry average and above company’s cost of capital.
SM Prime Holdings is the property development business of the SM Group (SM Investments Corp.), a conglomerate
owned by Henry Sy, the richest man in the Philippines. Its main business is the development, construction, and maintenance of commercial shopping centers.
It also constructs and manages buildings such as condominiums, apartments, hotels, restaurants, stores, and other structures for mixed-use purposes. Its business segments are dividend into: Malls, Residential, Commercial, and Hotels & Convention Centers.
The company has the biggest shopping mall portfolio in the country, with 67 malls (60 in the Philippines and 7 in China) that has a total gross leasing area of 9 million square meters as of the end of 2016.
Its mall portfolio boasts of having 5 of the largest shopping malls in the world, being able to hold thousands of
restaurants and retailers. For instance, its flagship malls, SM North Edsa and SM Mall of Asia, have gross floor areas of 498,000 sqm and 406,962 sqm, respectively, larger than malls such as the Mall of America in Minneapolis (273,529 sqm) or the King of Prussia Mall in Philadelphia (259,500 sqm).
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