Reclamation project 'on track' – SM Prime

Dredging ships and heavy machinery are seen in Manila Bay on Sunday. PHOTO BY J. GERARD SEGUIA

THE 360-hectare Manila Bay reclamation project remains “on track” despite delays, with integrated property developer SM Prime Holdings Inc. (SM Prime) targeting completion by 2028.

“We are following our timeline,” SM Prime Chief Finance Officer John Nai Peng Ong told reporters following a stockholders’ meeting on Tuesday.

“Insofar as the delay that was mentioned, we have worked out a concept program to speed up [and] catch up on our timeline. As we committed, this will be handed over in 2028,”

The $3-billion project, which was suspended by the government last year along with other reclamation works, has been allowed to proceed. It will be SM’s Mall of Asia Complex and is expected to be transformed into a business district featuring malls, offices, hotels, convention centers and residences.

Proceeds from an initial public offering of SM Prime’s real estate investment trust last year were initially targeted to partially finance the reclamation. The listing, however, was postponed, and SM Prime President Jeffrey Lim said they would fund the project through borrowings instead.

“It will take a couple of years before we complete the project. So, in terms of timeline, we don’t need to borrow the entire cost in one go,” Lim said.

He also said the listing was unlikely to push through this year “given the interest rate environment and market volatility.”

“I don’t think we can do it this year, but we will continue to assess as we move forward,” Lim added, noting that the postponement is not expected to affect the reclamation.

“The market is not, I think, good at this time to do a REIT. Next year, we’ll see because we don’t know what’s [going to] happen in the next several months.”

SM Prime aims to open four new malls in the Philippines this year with over 400,000 square meters of gross floor area. It also wants to launch up to 10,000 residential units.

SM Prime’s share price on Tuesday improved by 30 centavos, or 1.08 percent, to P28.20 amid a 0.97-percent increase for the benchmark Philippine Stock Exchange index.