SM PRIME Holdings, Inc.’s real estate investment trust (REIT) may be well received by investors due to the potential size of the offering and the strong reputation of the company, analysts said.
“Investors are likely to receive this news positively, given the potential size of the offering and the strong reputation of SM Prime Holdings as one of the largest property developers in the Philippines,” Globalinks Securities and Stocks, Inc. Head of Sales Trading Toby Allan C. Arce said in a Viber message.
If the REIT’s launch turns successful it might boost investor confidence in the property market and attract more foreign investments in the Philippines, Mr. Arce said.
The outlook for SM Prime’s REIT could also be positive given the strong demand for income-generating assets amid the elevated interest rate environment, he added.
“Listing its REIT unit is a strategic move for SM Prime Holdings to unlock the value of its real estate assets and raise capital for future investments,” Mr. Arce said.
BDO Securities Corp. First Vice-President and Chief Operating Officer Bernhard Aloysius G. Tsai said in a media briefing that listing SM Prime’s REIT unit would be a “strategic move… to unlock the value of its real estate assets and raise capital for future investments.”
“With more foreign participation and because of its liquidity they will garner more support, and this is assuming that the price is relatively acceptable in the market,” Mr. Tsai added.
SM Prime stated earlier that it was targeting to launch its first REIT portfolio by the second half of the year as it expects to raise $1 billion from its initial offering.
The total valuation of SM Prime’s REIT could be around $3.5 billion to $4 billion, according to Jeffrey C. Lim, the listed property developer’s president and executive director, in a media briefing.
The company’s REIT portfolio will initially be composed of 12 to 15 centers, which will come from the 82 malls it currently has as 30 to 35 malls are now fully matured.
Mr. Lim added that the company is still doing an evaluation with bankers and that the listing of its REIT will be subject to market conditions.
SM Prime is one of the remaining property developers in the country that does not have a REIT.
Shares in SM Prime closed 0.15% or P0.05 higher to close at P33.95 apiece. — Adrian H. Halili