SM Prime Holdings concluded 2025 with a net income of P48.8 billion, a 7% increase over the previous year, fueled by strong performance in its commercial property portfolio and diligent cost management.
The company’s consolidated revenues reached P141.1 billion, a slight rise from 2024’s figures. This growth was largely driven by a 6% surge in revenue from commercial properties, reaching P98.6 billion, demonstrating the continued appeal of its rental spaces.
Despite a dip in real estate revenues during the final quarter, a strategic reduction in costs allowed SM Prime to achieve a net income of P11.6 billion. Overall, fourth-quarter revenues decreased by 7% to P37.7 billion, but expenses were curtailed by an even greater 12%, landing at P17.9 billion.
Company President Jeffrey C. Lim acknowledged external economic headwinds in the fourth quarter, stating they “tempered the gains” achieved earlier in the year. However, he emphasized that these challenges reinforced a commitment to resource allocation and operational discipline, resulting in healthy margins and consistent improvements.
Malls remain the cornerstone of SM Prime’s revenue stream, contributing P85.1 billion – a substantial 60% of the total. Residential properties followed, generating P42.5 billion, or 30% of revenue, while hotels and convention centers accounted for 6%, totaling P8.5 billion.
A focused effort on expense control saw total costs and expenses decline by 4% to P69.4 billion, thanks to reductions in operating costs, film rentals, insurance, and other areas. This careful management contributed significantly to the overall financial health of the company.
Capital expenditures saw a modest increase to P81.9 billion, primarily directed towards expanding existing mall and residential projects, alongside developments in office spaces, hotels, and convention centers. These investments signal continued confidence in long-term growth.
Looking ahead to 2026, SM Prime is prioritizing spending efficiency in anticipation of a slower economic growth rate for the Philippines, which expanded by only 4.4% in 2025 – its weakest performance in five years.
Mr. Lim clarified that the company will not simply cut spending, but rather ensure every investment delivers a clear and substantial return. The focus will be on completing projects on time, enhancing customer experiences, and driving sales.
The company is maintaining a substantial capital expenditure budget of P100 billion for the coming year, strategically allocating resources to maximize impact. Growth is expected to be led by the commercial property sector, particularly malls, hotels, and convention centers.
Plans include the opening of four new malls in 2026, projected to increase the company’s gross floor area by 3% to 4%. Currently, SM Prime has no plans for acquiring new assets, preferring to focus on optimizing its existing portfolio.
The company expressed satisfaction with its current inventory, stating that any potential acquisitions must be strategically located, align with its integrated development strategy, and meet stringent pricing and return criteria.
SM Prime concluded the year in a strong financial position, with a net debt-to-equity ratio of 46:54 and a healthy interest coverage ratio of 6.61 times. Total assets grew by 7% to P1.1 trillion, with investment properties representing 61% of that value.
The company also holds a significant cash reserve of P27.6 billion, providing flexibility for future opportunities and navigating potential economic uncertainties. This financial stability positions SM Prime for continued success in the evolving property landscape.
