SM Prime shares rise on expansion bets

SHARES of SM Prime Holdings, Inc. rose last week amid investor optimism about its expansion in offices and premium housing.

Data from the Philippine Stock Exchange (PSE) showed that the property developer was the fifth most actively traded stock last week, with 68.18 million shares worth P1.67 billion changing hands.

Shares of the Sy-led company closed at P24.65 on Friday, up 4.7% from P23.55 the previous week. The stock outperformed the property index’s 1.7% gain and the benchmark PSE index’s (PSEi) 1% growth.

However, the stock declined by 2% year to date, contrasting with the property sector’s 3.2% growth and steeper than the PSEi’s 1.1% drop.

Last Thursday, SM Prime subsidiary SM Offices launched Core Tower Three in Sta. Rosa, Laguna, as part of the P1.6-billion Core Towers office development.

The company also announced its entry into the ultra-premium residential space with its P25-billion “Signature Series” development in Susana Heights, Muntinlupa City, featuring lot sizes priced from P100 million.

The residential offerings under Signature Series are expected to cost P15 million, P25 million, P65 million, and above.

Aniceto K. Pangan, equity trader at Diversified Securities, Inc., said that positive market conditions support SM Prime’s office expansion.

“The Core Tower Three launch is a positive development as demand for offices has zoomed up according to Leechiu Property Consultants, and is expected to surpass estimates this year,” Mr. Pangan said in a Viber message.

Metro Manila office leasing reached 740,000 square meters in the first half of 2025, marking the strongest performance since 2017 as information technology and business process management sector demand fueled recovery, Leechiu Property Consultants reported. The figure represents 67% of 2024’s full-year total of 1.1 million square meters.

Timson Securities, Inc. Equity Research Analyst Juan Alfonso G. Teodoro said the stock showed strong performance following the Core Tower Three launch.

The stock gained 4.5% on Wednesday following the company’s Signature Series development, then climbed another 1.8% after its Core Tower Three launch, closing at P25.05 on Thursday, its strongest close during the week.

“Investors responded positively. They see the expansion, especially the new tower and the milestone in leasable space as a solid growth move, and that optimism showed up in a healthy uptick in share price over the week,” Mr. Teodoro said in a Viber message.

Regina Capital Development Corp. Head of Sales Luis A. Limlingan said that the local market reacted with optimism to SM Prime’s continued push into regional office development, “reflecting confidence in the company’s long-term growth strategy.”

Regarding the ultra-premium residential venture, Mr. Teodoro said that SM Prime would need to focus on exclusivity and high-end positioning to succeed in this market segment.

Mr. Limlingan added that SM Prime will need to balance product distinction, strategic marketing, and a reimagining of Susana Heights, while anchoring its premium pricing on long-term value and exclusivity.

“Definitely, SM Prime must keep abreast with the trends such as greenery surroundings, comfortability, and other competitive edges that fit the demand of high-end households, that make them feel the place is like home,” said Mr. Pangan.

Mr. Pangan added that favorable macroeconomic conditions continue to support the property sector’s outlook, including declining inflation rates and a downtrend in overnight lending rates.

Inflation slowed to 1.4% in June from 3.7% a year earlier, bringing the five-month average to 1.9%, and falling below the Bangko Sentral ng Pilipinas’ 2-4% target range.

Additionally, the Bangko Sentral ng Pilipinas lowered its key rate by 25 basis points to 5.25% last month, amid moderating inflation and below-expectation first-quarter growth.

“With this trend, we could expect a better economic activity going to the 2nd half of this year, especially for SM Prime which has shown resilience in its retail side with a better overall performance in the 1st quarter, with income up by double digits.”

SM Prime’s attributable net income rose by 11.4% year on year to P11.65 billion in the first quarter, while consolidated revenues increased by 6.7% to P32.77 billion.

“For the property sector in general, it’s smart to keep an eye on interest rates and new infrastructure projects, which can really affect demand and land values,” Mr. Teodoro said.

Mr. Limlingan said that SM Prime continues to transition into a multi-sector powerhouse as it balances mall, office, horizontal, and premium residential developments.

“To validate their strategic pivot, it would be best to monitor rollout execution, regional demand strength, Metro Manila oversupply absorption, and how macroeconomic and policy shifts support purchasing power.”

Mr. Teodoro forecasts SM Prime’s earnings at approximately P12.28 billion for the second quarter, contributing to a full-year projection of P53.12 billion.

From a technical perspective, Mr. Teodoro placed support between P24-P23 and short-term resistance at P25.50-P26.

Mr. Limlingan pegged support and resistance levels at P24.50 and P25.10, respectively, for the upcoming week.

Mr. Pangan identified immediate price resistance at P25.10 and support at P23.20. — Pierce Oel A. Montalvo