Over the course of 30 years, SM Prime Holdings (PSE: SMPH) has change into a dominant force within the Philippine real estate sector, fueled by SM’s iconic shopping malls and market-leading investments by SM Development Corp. (SMDC).
Originating from a small shoe store founded by Henry Sy Sr. in downtown Manila, SMPH has change into one of the country’s most respected corporations and a number one integrated developer in Southeast Asia.
In addition to its impressive scale, SM Prime is the leader of the Philippines – its development follows the identical track because the country’s economic and social development.
Turning headwinds into progress
During the Nineteen Nineties, the Philippines experienced a mean real GDP growth rate of 2.8% annually as a consequence of political instability, natural disasters and the Asian financial crisis.
In the identical period, the common rate of interest on loans was over 19%reflecting the broader economic challenges facing the country.
In this context, SM Group founded and listed SMPH in July 1994 to prepare and expand its network of shopping centers. At that point, it had only 4 corporations in its portfolio: SM North EDSA, SM City Sta. Mesa, SM Megamall and SM City Cebu.
After lifting almost £6 billion from the capital market, SM Prime aggressively expanded its shopping center network, strengthening its position as the most important mall operator within the country and securing a spot within the Philippine Stock Exchange (PSEi) Index since October 1994.
Reorganization for growth
As it enters its second decade on the stock exchange, SM Prime has undertaken transformational consolidation that has modified its growth trajectory.
Through a series of well-executed transactions, SM Group has unified its extensive real estate interests under SM Prime, effectively transforming the shopping mall operator right into a real estate conglomerate.
The entire process took place, from announcement to final regulatory approval lower than five months. His speed and ingenuity earned SM Prime recognition “The most innovative offer” award from a financial publication Alpha of Southeast Asia.
After consolidation, SMPH’s market capitalization increased by 133% to P950 billion by the tip of 2023, up from about P408 billion in 2013.
Setting records
Since the reorganization, SM Prime has consistently pushed the boundaries in generating value.
In 2017, the actual estate giant made history as the primary company on the PSE to attain a market capitalization of PLN 1 trillion, closing at P1.01 trillion on June 9.
SM Prime also surpassed key revenue recognition milestones, surpassing the P104 billion mark in 2018 and recording P128 billion in 2023, its highest result so far.
Over the past 10 years, its annual net income increased 146% from P16 billion to a record high of P40 billion in 2023, the very best amongst publicly traded peers.
The company is poised to interrupt one other profit record in 2024, with first-half earnings rising 13% to P22 billion, up from P19 billion a 12 months earlier.
Beyond profitability
SM Prime’s growth goes beyond financial metrics and shareholder returns. It has been a catalyst for national progress – creating jobs, providing tax revenues, constructing communities and supporting sustainable urbanization within the Philippines.
“As SM Prime celebrates its 30th anniversary, we remain focused on innovation and sustainability. We believe that thanks to the strong foundations we have built, our best projects are yet to come,” said SM Premier Jeffrey Lim.
We have integrated project development into our five-year roadmap, which we hope will take the corporate to a brand new level of growth,” he added.
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